Economy
Debt, uncertainty at Gunns
Australian Financial Review (Debt, uncertainty at Gunns 21st July 2010)
Carrie LaFrenz, gives Gunns net debt as $661 million dollars, this would imply an annual interest bill in excess of $50 million. If the revised earnings before interest and tax are now between $50- 60 million this interest bill should be covered.
Gunns have recently sold 27,000 hectares of forested land in Tasmania at an average of $1,000 per hectare. Their remaining land is encumbered by plantations now virtually worthless without a pulp mill for they are sitting tenants who pay no rent. It is this land that is lodged to the banks as security against the $661 million debt.
The smart money is out of bankrupt forestry companies such as Timbercorp, Great Southern and FEA who were propped up by the tax payer and MIS scams. They owed much of their existence to, the former Minister of Forestry in the Liberal Government, Senator Erich Abetz. The Liberals have a lot to answer for over Forestry in Tasmanian and so few questions have been asked. For example, why did the Forestry company Gunns give $50,000 to the Liberal Party immediately after the Tasmania Senator Abetz was made Minister for Forests in the Howard Government?
Carrie, I suggest it is not a class action that is required against Gunns but a Royal Commission into the Forestry Industry to find out why so many can lose so much through the actions of so few.
Meanwhile, from Stock & Land:
Sodra still keen on Gunns partnership
26 Jul, 2010 09:25 AM
SWEDEN’S Sodra, the long-touted possible joint venture partner for Gunns’ Bell Bay pulp mill, is still keen on sealing a deal with the Tasmanian timber company, squashing rumours that it has backed away from the troubled company.
Gunns needs an equity injection from a partner to build its controversial $2.2 billion mill, which has divided communities, enraged green groups and been a political minefield, The Australian Financial Review reports.
Sodra chief executive Leif Broden said that while he has not spoken to Gunns since former chairman John Gay’s early exit from the group in late May, he remains interested in the planned pulp mill in the Tamar Valley.
Sodra, a Swedish association with more than 50,000 forest owners as members, has been in talks with Gunns about the mill for the past two years. Mr Broden said that while Mr Gay worked to make the pulp mill possible, his departure would allow the company to develop a new identity that might help get the project started.