After hiding from the scrutiny of the market for half a year, Greg LeStrange has now admitted what some of us suspected all along.
Gunns is worthless.
It’s not even a shell. With the admission that the land and trees, supposedly the jewel in the crown of Gunns’ assets aren’t worth much without a pulp mill, Gunns is planning to write off another $800 million.
That’s around six times the market value of Gunns last time shareholders had the opportunity to get out.
It also includes the capitalised value of the pulp mill project, which will be written off in the full year accounts.
The revised balance sheet will no longer show shares having a net asset value of $0.80. It will show that there’s a shortfall of some $150 million, which appears Gunns hopes to recoup by trading out of this god-awful mess.
That won’t happen.
ANZ, who are already champing at the bit to get hold of the $450 odd million they are owed, will have a liquidator appointed by the end of this week.
That’s all folks,
Please refer to link below for the full announcement:
• Christine Milne: Gunns’ pulp mill dead in the water
The Gunns statement to the Australian stock exchange today confirms that the Tamar Valley pulp mill is dead in the water and is not now or has ever been economically viable, the Australian Greens said today
Tasmania now faces Gunns conducting a clearing out sale as Mr L’ Estrange oversees the writing down of assets in an attempt to salvage the company.
“The people of the Tamar Valley must be congratulated for having campaigned so long and hard to protect their homes, their businesses and their lifestyle and it must be shocking for them to read that Gunns has now admitted that there is no value-add to the Tasmanian timber resource from the pulp mill.” Senator Christine Milne, leader of the Australian Greens said.
“This sends a clear signal to the negotiators in the intergovernmental agreement that the current business model for logging in Tasmania is a complete failure and that the transition out of native forests must occur quickly.”
“For the last eight years the Tasmanian Labor government and Liberal opposition has sold this pulp mill to the Tasmanian people as being a state economic saviour because of its value-add to the timber industry - Gunns’ announcement today makes a mockery of this.” Senator Peter Whish-Wilson said.
“As someone originally from the Tamar Valley community it’s time to put this project to rest for good and allow the community to get on with their lives, and lastly and most importantly to focus on the positives of living and investing in Tasmania.”
First published: 2012-08-06 03:51 PM