Tasmanian Times

Economy

Gunns equity bid hits first deadline

RACHEL WILLIAMS, Examiner
GUNNS Ltd will today know whether its institutional entitlement offer has proven successful as it embarks upon a $100 million acquisition of ITC Timber, a subsidiary of Elders. The Launceston-based timber products company yesterday announced a $145 million equity raising scheme, with shares offered at 90 cents.
The institutional offer closes at midday today and the three- week retail offer will open next Monday.

Gunns will use the money to fund the ITC acquisition and will use the extra $45 million it intends to raise to either pay off debt or buy plantation estates belonging to failed managed investment scheme companies Great Southern and Timbercorp.

The ITC purchase was announced on the same day as Gunns revealed a 4.9 per cent drop in profit to finish with a $56.2 million full-year profit.

Group revenue was down 10.7 per cent to $769.3 million, the forest products division dropped 5.8 per cent while its MIS business took a massive 45 per cent hit.

The fall in profits was attributed to weakened conditions in the Japanese fibre market, turmoil in the MIS sector, weakened domestic demand for sawn timber and poor yields from its wine business.

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9 Comments

9 Comments

  1. Russell

    September 3, 2009 at 4:54 pm

    Max, I quizzed mine (Australian Ethical Investment and Superannuation) a while ago and they for one don’t.

  2. Richard Butler

    September 3, 2009 at 2:54 am

    When all of the old growth has been removed, then they can claim they only want plantation wood.

    A position as this is similar to the assignment of national parks in Victoria. An audit was recently produced and found that most of the ‘bush’ was once forest, and cleared over the years for logging. Once the logging was completed, and some scrubby bush reappears – then its assigned to state/ national park lands.

    A most perverse way of managing the planet.

  3. max

    September 3, 2009 at 12:02 am

    I only hope my super fund hasn’t been taking up any of these shares.

  4. Gerry Mander

    September 1, 2009 at 4:31 pm

    Line in the sand….um.

    What was that all about? Can anyone remember?

    Wasn’t there a deadline mentioned around about the beginning of September. No mill start – no more money? Same with the timber agreement. No construction, no 20 year wood supply contract?

    Maybe we should ring up Uncle David and ask if he can remember saying something along those lines. It would be nice to know if the old lines are still part of the ‘New Vision’.

  5. salamander

    September 1, 2009 at 2:49 am

    If Gunns were to cancel the timber deal with FT would that mean government support for the mill would disappear? What a lovely thought! A falling out of card sharps who only know how to play with marked cards.

  6. Pete Godfrey

    August 31, 2009 at 11:28 pm

    So if the pulp mill is to be 100% plantation based then they will be able to cancel their lucrative wood supply deal with Forestry Tasmania. Will this also mean that export woodchips from Tasmania will be a thing of the past?

  7. Gerry Mander

    August 31, 2009 at 7:22 pm

    Gunns snnounced today that their final dividend is a mere 2 cents!

    At the same time they are trying to raise another $145 Million to buy up Roberts holdings in FEA etc, despite their profit margin dropping in all sectors, including EBIT MIS Plantations profit down 80.2%. Now they want $100 million for more of the same and still haven’t found a mill partner. This dilutes the shareholdings value of all the other investors.

    Maybe they are looking to make their temporary trading halt a little more permanent??

  8. Brian.M

    August 31, 2009 at 5:35 pm

    Suprise Suprise, another Gunn’s advertisment penned by in the exhaggerator! Champagne reporting! Hope Mr. Gay bought lunch. An entre’ of propaganda with a side order of …!

  9. Dave Groves

    August 31, 2009 at 11:26 am

    So $145 million required….100 of which to buy some more trees=cashflow? and $45 million to pay off existing debt.

    Sounds to me like they are sailing very close to the wind?

    Is this robbing Peter to pay Paul????

    Remember the fund raising that went on in recent times…….oooppps!!!

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