Mr John Gay, until recently both Chairman and CEO of Gunns Ltd, began raising corporate funds on 21 April 2008 when the Gunns share price stood at $2.86. He raised $11,731,539 by issuing 4,101,937 new shares to bring the number of shares on offer to 406,561,405 the market then valuing the company at $1,162,765,618.
On 12 September 2008 he raised a further $332,919,895 by issuing another 221,946,597 shares to bring the number of shares to 628,508,002 thereby reducing the companies stock market value to $942,762,003.
On 8 September 2009 he raised a further $114,881,999 by issuing another 127,646,666 shares to Institutions to bring the number of shares to 770,216,730 valuing the company at $693,195,057.
In summary, Gunns through its CEO and Board Chairman raised $459,533,433 in 18 months by issuing over 350 million shares. The market now values this iconic taxpayer funded empire, which stays afloat on State Government largesse, MIS Schemes and the gift of Tasmania’s public forests, at $693,195,057.
Nearly $1 billion dollars down the gurgler in 18 months and yet the company still owes $650 million dollars to its bankers. This begs the question “what price the shares, if Gunns has to raise more money for a Pulp Mill, how many devalued shares will then be available in the market place and which investment manager will be brave enough to buy them, for with a track record as good as his, would you trust this man with your money?
John Hawkins
Chudleigh 7304
