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