ANZ to decline Gunns funding

Business Spectator

Banking sources say ANZ will not provide funding to timber group Gunns Ltd for its controversial Tasmanian pulp mill project, citing tight credit conditions. While the bank told Business Spectator that no decision had been made, sources say Gunns’ main banker for 22 years had told the group it would not fund the project in the current credit conditions. The Tasmanian group, with a market capitalisation of $750 million, is seeking funding worth $2 billion to build a pulp mill in the state’s Tamar Valley, after originally seeking funding worth $1.5 billion. Media reports have recently suggested that Gunns was shopping around for cash and had recently approached Macquarie Bank. Gunns reported a first half net profit of $14.86 million, down 27.6 per cent, in February. At the time it reported the results, the company said investment in its Bell Bay pulp mill project was continuing and confirmed that the budget had been finalised at $2 billion and agreements reached with John Holland Pty Ltd and MacMahon Contractors Pty Ltd on the costing of the scope of works for civil and construction activity. As at February, the company had incurred around $58.3 million in capital expenditure and had expensed costs of $27 million for the project and said that it was progressing in talks with the proposed banking group for its debt facility. Read more here

Meanwhile,

MEDIA RELEASE Tuesday 20th May, 2008

Cheerleaders protest outside ANZ offices

ANZ’s Melbourne CBD offices will today be the target of a group of cheerleaders, angry at the bank’s lack of decisiveness over its decision whether or not to fund Gunns’ pulp mill in Tasmania.

Armed with a message to the bank that it is time to get off the fence and announce its decision on whether or not they will fund Gunns’ environmentally damaging pulp mill, The Wilderness Society’s ‘Pulpettes’ will demonstrate their disappointment in front of lunchtime crowds at 1.30pm on the corner of Elizabeth and Collins St in Melbourne’s CBD.

“People deserve to know once and for all whether or not the ANZ is going to fund Gunns’ pulp mill,” said Pulp Mill Campaigner for The Wilderness Society Vica Bayley.

“We have heard from an ANZ branch staff member at our protests in Melbourne that the bank has already made a decision not to fund the pulp mill, yet publicly the bank is saying its assessment is ongoing,” Mr Bayley said.

“Under the ANZ’s new forest policy, a proposed project must be able to demonstrate significant socio-economic benefits and the proposed pulp mill fails this test”, he continued.

“There are holes in the pulp mill proposal you could drive a logging truck through. Up against the ANZ’s new guidelines, it fails the test of pollution prevention, the test of community consultation and the test of not logging high conservation value forests.”

“This decision affects the lives of tens of thousands of people. The ANZ has a responsibility to be honest and inform the public if a decision has been made.”

“Obviously, if the ANZ has decided not to fund the mill, we would welcome it as an environmentally responsible decision, but we also call on the bank to make the results of its independent assessment public,” he said.