• As the Suspension of Trading is lifted, follow The Share Price here
Last year in reponse to a question (May 2011) during a live chat on the Liberals’ Turn Tasmania Around Facebook site, Liberal opposition leader Will Hodgman replied to me saying the Libs would rule out any further financial support for the Gunns Pulp mill should they win government.
Will Hodgman has also made this promise on ABC radio.
Here is the transcript of my exchange with Will Hodgman:
Rick Pilkington – “……..Will, if by some miracle the pulp mill is built, will you today rule out providing government subsidies and bailouts in the event that the project falls on hard times? The so called benefits to the community are at best arguable now, with further taxpayer subsidies it would prove to the massive white elephant that many of us predict”.
“Will Hodgman for as Long as i can remember your forest policy has been about serving the needs of vested interests. Not surprising with the close links your party has had to the Monopoly company in the industry. The Liberal/ Labor support for Gunns pulp mill has been a disaster for Gunns’ workers with over 1000 Gunns’ employees losing their jobs over the last few years because of poor managment by Gunns and its myopic focus to build a uncompetitive pulp mill. Will, if by some miracle the pulp mill is built, will you today rule out providing government subisidies and bailouts in the event that the project falls on hard times? The so called benefits to the community are at best arguable now, with further taxpayer subsidies it would prove to the massive white elephant that many of us predict”.
Will Hodgman MP: -“Rick – yes. It has to stand on its own feet.”
However Liberal shadow treasurer Peter Gutwein is now refusing to rule out giving more public money to Gunns for its pulp mill.
……”Opposition economic development spokesman Peter Gutwein again called for the government to sack Nick McKim as a minister to prevent further derailment of the pulp mill project.“If we were in government, you would obviously keep an open mind to any requests for support from (Gunns) because it is absolutely vital that we get this project over the line,” he said………(The Examiner, 11/3/12)
This begs the question – Why has Peter Gutwein publicly contradicted his his party leader’s position of public money for Gunns? Why have the Liberals apparently had a change of heart on more public money for Gunns when not so long ago his leader Will Hodgman slammed Labor/Green govt over its $48M payout to Gunns?
……”This is $34.5 million that should be being spent on schools, hospitals and police, not as a bargaining tool in a dodgy political deal,” Mr Hodgman said.
“This disastrous deal has been nothing but an expensive embarrassment from the start.
“Given that Gunns voluntarily gave up its native forest contracts, they shouldn’t receive a cent of compensation.”…. (Will Hodgman in The Mercury, 15/9/11)
Contrast Mr Gutwein’s near obsession with the pulp mill and his apparent enthusiasm to give more taxpayer’s money to Gunns against Mr Hodgman’s hard-line against public handouts for Gunns and recent refusal to meet with a potential Pulp Mill investor (TT: Dark facts uncovered by White Knight. Will prefers Lton Cup to White Knight.). Perhaps the difference between the two senior Liberals’ attitudes on the Pulp Mill is starker than is given credit.
Of course last week’s revelations of Will Hodgman’s Chandler snub triggered widespread criticism of the Liberal leader and speculation about his grip on the opposition leadership.
Could the apparent contradiction between Gutwein & Hodgman’s positions on public money for Gunns be indicative of an emerging challenge to Will Hodgman’s leadership and a shift toward a harder party line on the Pulp Mill/Forest related policy? It was only a few weeks ago that the Tasmanian Liberals also flagged the introduction of draconian laws to stop protests against logging industry interests should the Libs win government. Another sign of a shift to a more reactionary & hard line Liberal party on forestry.
So who is driving this shift and who in fact is now driving the Tasmanian Liberals’ Pulp Mill policy?
Is Will Hodgman set to break his word on public money for Gunns to appease powerful pro mill hardliners within Liberal ranks and will we see the Liberal party with Mr Hodgman at the helm or perhaps leader in waiting – Peter Gutwein taking the party to the 2014 election with a policy of more public money for Gunns pulp mill?
Time will tell.
Unless drawn by questions from local media it’s highly unlikely the Liberal’s will advertise plans to give Gunns public money for the mill. The Liberal party would be well aware that several public polls conducted on the question of more public money for Gunns pulp mill have shown such a proposition is even more on the nose with Tasmanians than the project itself.
• Rebecca Urban, The Australian: Refinancing swansong of a chief ready to move on
THIS weekend’s work could very well prove to be the swansong of Gunns’ Greg L’Estrange.
After declaring the war with the greenies lost and exiting the company’s native forest operations, the managing director of the embattled forestry group is in the midst of finalising a $200 million refinancing plan that should make the company debt-free by the end of the year and finally in a position to secure a funding partner for its controversial pulp mill in Tasmania’s Tamar Valley.
But it is doubtful the 54 year old will be around for the realisation of the long-held dream of his predecessor, John Gay.
L’Estrange has quietly had his historic East Launceston home on the market for several months, and, given his request to the board last year to extend his contract until July only, it appears that he is thinking about life after Gunns.
One of the Apple Isle’s oldest and most controversial companies, Gunns has spent the past week trying to cobble together a substitute recapitalisation plan after its white knight, the Singapore-based investment firm of New Zealand millionaire Richard Chandler, pulled out of a deal to make a substantial investment.
With major shareholder Perpetual believed to be driving the recapitalisation, which is expected to take the form of an underwritten rights issue, fellow institutions on the register are understood to be keen to participate.
Many long-suffering investors, who’ve seen the stock fall from a high of 63c to just 16c in the past year alone, are hoping the deal will also bring one or more new institutions onboard.
Read the full article, The Australian here
• Dr Frank Nicklason: Dr Julian Amos’ latest opinion piece is as depressing it is predictable
Dr Julian Amos’ latest opinion piece is as depressing it is predictable (Mob rule not fair on Tasmania”, Mercury15/3, Mercury here )
His article mixes sarcasm, superficial and (deliberately?) confusing assertions, and important omissions. The Amos focus is narrow, his tactic the ‘blame game’.
Dr Amos should list that he is a relatively recent chief of the Forest Industry Association of Tasmania along with his credentials as a Labor Minister some decades ago. He must also make it clear whether or not he is receiving any benefits from the forest industry for his comments.
There is no basis for anyone saying that “a majority of people support the (Longreach) pulpmill development” and no evidence to back the implication that the Chandler Corporation decided to withdraw it’s interest in Gunns because of the words and/or actions (or inactions) of any individual or group.
Dr Amos does not appear to have considered the possibility that Chandler Corporation, having done the necessary homework, decided for themselves that financial involvement in such a project was too risky and just wasn’t a good idea.
Dr Amos is ready to concede that “boycotts could be justified where there there is irrefutable evidence of resource use causing significant and permanent environmental damage”. He would, I suppose, argue that the well documented damage caused by broadacre clearfelling and burning of native forests and industrial scale pulpwood plantation establishment on productive farmland and the cleared forest will eventually resolve. This will not happen within the lifetimes of our grandchildren and it won’t happen at all unless business as usual is abandoned.
The damage includes the degradation of of river catchments, greenhouse gas pollution from so-called ‘regeneration’ burns, and loss of biodiversity. The damage is also to other industries; agriculture, viticulture, fishing, leatherwood honey production, and tourism. It is to the fabric of our society.
Articles like those of Dr Amos add nothing. By seeking to justify current, clearly failed, practices and by vilifying the messengers of dissent he retards the necessary discussions about what we, really urgently, do need to do in the face of the twin challenges climate change and peak oil.
• Greg L’Estrange, Gunns Ltd: MARKET UPDATE: Sale of Green Triangle Forest Estate
Gunns Limited (the “Company”) is pleased to announce that the first stage of the transaction for the sale of the Gunns Green Triangle forest estate completed on 16 March 2012, with Funds managed by New Forests having taken a controlling interest in the 46,000 hectare estate (see enclosed announcement by New Forests). The transaction brings together the estate land and trees in a single ownership structure. Following completion of this stage, as consideration Gunns holds an equity interest in the investment trust valued at approximately $120 million. This represents the value of land assets vended into the new trust. The balance of the equity in the new trust is owned by institutional investor clients of New Forests. The second stage of the transaction will involve the sale of Gunns’ equity interest to new investors.
The transaction provides for long term timber off-take from the estate to supply Gunns’ Tarpeena sawmill and continued operational management of the estate by Gunns on a transitional basis.
The completion of the second stage is subject to conditions precedent including approval of the investment by new investors and FIRB approval, as required.
Equity Raising
On 8 February 2012 the Company announced a conditional proposal for an equity raising in conjunction with an equity placement to the Richard Chandler Capital Corporation Pte Limited (“RCC”). The Company announced on 13 March 2012 that the RCC investment would not be proceeding. Subsequently, there has been some media speculation and comment in respect of the Company’s proposed placement of securities to RCC.
It is the Company’s understanding that RCC decided not to proceed with the proposed investment based on its view that, in aggregate, the investment did not meet the social criteria of RCC’s previously stated evaluation framework.
The Company is proceeding with its financial advisors to develop an alternative equity offer and associated transaction documentation. The process is continuing and is incomplete. The capital raising will be material to the Company’s financial position and strategy. The Company is not currently able to provide a definitive timeframe for finalisation of the equity offer but expects the current suspension to extend for at least a further 5 business days. A further market update will be provided on 26 March 2012.
The Company is not aware of any reason why the suspension of trading in its securities should not continue.
http://www.gunns.com.au/Content/uploads/documents/ASX%20RELEASE%20-%202012%2003%2019%20-%20Market%20Update.pdf
