Tasmanian Times

Economy

Gunns buys timber company

GUNNS tells ASX
HERE

RACHEL WILLIAMS, Examiner
Tasmanian timber company Gunns has acquired ITC Timber Pty Ltd, a subsidiary of Elders Limited. The $100 million investment will be funded via a $145 million equity raising scheme, structured as a fully underwritten one-for-four non-renounceable pro-rata entitlement offer. Shares in the scheme will be offered at 90 cents per share. Gunns stock opened on the Australian Securities Exchange at $1.14 this morning. Gunns told the ASX that the acquisition included two manufacturing locations in Victoria and two in Tasmania, a sales base throughout Australia and a 50 per cent stake in Smartfibre, a joint venture with fellow Launceston-based company Forest Enterprises Australia. … In the release to the ASX, Gunns also announced a $56.2 million full-year profit, down almost five per cent on the previous year. But, it did not provide an insight into the progress of its discussions with a joint venture partner or financier for its $2.2 billion pulp mill – other than to say negotiations were “continuing positively”. Read more here

Last week’s AAP report …

By Paul Carter

HOBART, Aug 28 AAP – Gunns Ltd has been granted a trading halt,

pending an announcement to the Australian stock exchange.

“Gunns is having discussions with a party concerning a possible

acquisition and may conclude negotiations, which may potentially

lead to an agreement, shortly,” says a Gunns statement to the ASX.

Gunns proposes to release it annual results at the same as the

announcement concerning the acquisition.

Trading in the timber and paper mill giant’s shares will resume

on Tuesday.

Gunns was notified in July that it is the preferred provider of

a second hardwood woodchip facility at the Victorian Port of

Portland.

Contractual arrangements for Portland involved the design of a

new facility there.

Construction is expected to start by the end of the year.

Gunns proposes to fund and operate the new facility.

Chief executive Greg L’Estrange said in July that the new

facility will provide much needed additional capacity at the port

to handle the region’s plantation grown blue gum hardwood chips.

The port authority expects the new facility to be handling more

than three million tonnes of plantation grown hardwood chips from

2011.

Currently the port can handle only a quarter of this volume.

AAP pc/cjb

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8 Comments

8 Comments

  1. Bob McMahon

    August 31, 2009 at 3:30 am

    Gerry Mander: you are so cruel. Spare a thought for that much put upon company. It takes a lot of hard work and clever people to convert a $200 million subsidy into a $56.2 million profit.

  2. Gerry Mander

    August 31, 2009 at 1:01 am

    Only a $56.2 million profit – down 5% since last year.

    Do you think Forestry charged them too much?

  3. john hawkins

    August 30, 2009 at 10:24 pm

    The proposed new purchase like the FEA purchase is to be funded by the issue of yet more Gunns paper,this dilutes current shareholders equity even further when they are unable or unwilling to stump up more cash.The only good sign is that it is now obvious that the company has no money for either dividends or more importantly a Pulp Mill.

  4. Frank Strie, the President of TWFF

    August 30, 2009 at 8:49 pm

    “First they ignore you, then they ridicule you, then they fight you, then you win.”
    — Mahatma Gandhi

    One day may learn that GUNNS Limited would love to have a social and enviroinmental license to continue to do business in Australia…
    But Bob and Hans will come to that last or possibly never.

    Just 15 minutes ago

    Visy Paper FSC Certification
    31 August 2009

    Visy Paper is pleased to announce Forest Stewardship Council (FSC) chain-of-custody certification for the use for FSC 100% Recycled certification has been awarded to paper produced at the Australian Recycled Paper Mills.

    The FSC 100% Recycled certification applies to a variety of Visy paper products, and will feature on paper packaging from September 2009.

    The FSC 100% recycled label certifies that the fibre used to make these Visy papers comes from post-consumer sources, such as kerbside collections.

    FSC chain of custody procedures provide a link between the post-consumer waste and the product into which it is manufactured. Sustainability has always been the core of Visy operations.

    FSC certification recognizes Visy’s historical and current operations that turn “waste” material into useful paper products; such as Visy Fibre Packaging cartons and other Visy fibre packaging products.

    Visy and FSC make good partners for environmentally responsible behaviours as FSC standards are regarded as the global benchmark for certification of forest products, and Visy’s leadership and commitment to all aspects of sustainability demonstrates these values.

    Not only will FSC Certification enhance the environmental integrity of Visy’s paper, it will provide assurance and support to our customers about the source of the products they are buying.

    The FSC Chain of Custody Certification has been granted by Scientific Certification Systems (SCS) who is accredited by the FSC to certify companies to their international standards. About the Forest Stewardship Council (FSC)

    The Forest Stewardship Council (FSC) is an international not for profit organization that promotes environmentally appropriate, socially beneficial, and economically viable management of the world’s forests.

    It was founded in response to public concern about deforestation and demand for a trustworthy wood-labelling system. FSC has a respected system of guidelines for responsible forest management and an accreditation program conducted by a network of independent auditors.

    For more information please see http://www.fsc.org or http://www.fscaustralia.org .

  5. Mad Max

    August 30, 2009 at 8:10 pm

    No, Rachel, shares didn’t open at $1.14 on the ASX this morning. They remain in a trading halt, to give the company a couple of days to convince institutional shareholders why they should stump up even more cash.

    Perhaps Rach was so excited about having another Gunns story to write she forgot to look at the basics.

    I’m glad the story was fixed up later.

  6. William Boeder

    August 28, 2009 at 12:20 pm

    Another new addition to the ASX page, re Gunns Ltd: look under Company Details.

    A disclaimer to all announcements that issue from Gunns Ltd.

  7. Gerry Mander

    August 28, 2009 at 12:37 am

    I notice that in Gunns share trading graph, this month there has been more activity and higher sales volume than there has been in the rest of the year. Three times the volume has been above 4 million shares traded on a single day and there have been several days where the volume has exceeded 3 million shares.

    Can anyone suggest a good reason for this? A little premature knowledge perhaps?

  8. phill Parsons

    August 27, 2009 at 11:44 pm

    Perhaps the JVP has magically appeared but more likely is the saving of a failed MIS scheme or 2 to protect the Gunns MIS investments.

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