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.