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UPDATE 3-Chile forestry to raise $1 bln to fund purchase

* CMPC to raise $1 bln via share and debt sales

* Fresh funds to help Chilean firm buy Brazilian business

* CMPC plans to invest around $300 mln in 2010

(Adds CMPC president comments, purchase details)

By Antonio de la Jara

SANTIAGO, Oct 9 (Reuters) - Chilean forestry group CMPC CAR.SN said on Friday it plans to sell $1 billion in shares and debt to finance the purchase of a Brazilian pulp business that will make it the world's No 3 cellulose producer.

The company said shareholders approved a $500 million capital increase. Later the company’s board said it will also issue bonds for $500 million in the United States during the first week of November.

CMPC agreed to buy a pulp unit from giant Brazilian company Aracruz ARCZ6.SAARA.N for $1.43 billion, which would give the company access to the world's cheapest pulp-producing market.

CMPC president Eliodoro Matte said he expects the funds to be available by mid-December for the handover of the unit’s assets.

Aracruz’s Guaiba unit has pulp, forestry, paper and wood businesses that include a plant to process cellulose and another to produce paper. The transaction also includes 212,000 hectares of land, of which 60 percent is planted with eucalyptus trees ready to be harvested.

CMPC, controlled by the Matte group, plans to sell 20 million shares at 13,800 Chilean pesos each, which represents a 20 percent discount on its current stock price.

Matte said that despite the purchase, the company has strong finances and plans to invest about $300 million in 2010. He said the company plans to expand industrial plants in Chile and tissue plants in Mexico and Colombia.

CMPC shares were down 1.03 percent at 19,945 pesos in afternoon trading. ($1= 550.80 Chilean pesos) (Editing by Lisa Von Ahn and Gerald E. McCormick)

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