Tasmanian Times

Environment

Gunns admits pulp mill doubts

Nick Clark Mercury

GUNNS Ltd has conceded for the first time its $2 billion Bell Bay pulp mill may not proceed because of problems getting finance. In a statement coinciding with its annual profit announcement, Gunns also said it would not have finance for the mill finalised until the first quarter of 2009. The delay takes the project past the State Government’s sovereign risk deadline of November 30. “Whilst directors believe it is probable that the mill project will proceed to completion, the financing structure is yet to be finalised,” executive chairman John Gay said. “Gunns cannot state with certainty that such a structure will be achievable, nor can it provide an assurance that the mill project will proceed.” In other developments yesterday: Mr Gay said he would stand down as managing director by June next year but would remain as chairman of the board; Mr Gay confirmed Gunns could not do the project alone, saying it was the company’s intention to bring in a 50 per cent joint venture partner; He said there were no firm commitments for finance but “certain debt providers have indicated agreement in principle” and for other debt providers “discussions are ongoing”. Gunns has been on the back foot since the ANZ Bank decided in May it would not act as lead banker for the project. Read more here

What Gunns says: Here

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3 Comments

3 Comments

  1. Bob McMahon

    August 29, 2008 at 4:28 am

    Quite right Duncan. How dopey is the ASX? Take a look at the cover page photo of the Gunns capital raising document for an image symptomatic of the Gunns deception of the ASX. It depicts a whole pile of slabbed timber. Silver birch in fact. This is not an Australian timber milling image. It comes from Europe and Gunns had absolutely nothing to do with the milling of this very un-Australian timber. Thankyou Frank Strie for bringing this to my attention.

  2. Pete Godfrey

    August 28, 2008 at 11:52 pm

    Next year sounds bad, so far at a million dollars a day it must have cost them $360 million, then there was the payments for Hedge funds to keep the loans open. No wonder their profit is down.
    That means that from what John Gay has told us they would have made about $500 million this last financial year without all the extra costs of trying to get the mill up and running.

  3. Duncan Grant

    August 28, 2008 at 1:23 pm

    The extended suspension of trading of Gunns on the ASX has little to do with pending announcements of capital raising and everything to do with stopping the free fall of its share value. Is it possible that the ASX is the latest body to be hoodwinked by Gunns?

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