GUNNS has told investors to disregard financial information it has provided in recent months about the Bell Bay pulp mill.
Rather, it says the market should wait until a prospectus comes out with the most current financial information on the $2.3 billion project.
Gunns is seeking to raise $400 million in its last roll of the dice to get the mill project built.
Managing director Greg L’Estrange indicated it would be at least a week before the equity-raising was finalised.
The company’s warning came in an update to the ASX in which it extended its six-week trading halt for a week.
• Alison Andrew, The Examiner: Gunns set to make pulp mill announcement:
NEW figures on the financial situation of Gunns’ proposed $3 billion Bell Bay pulp mill project will be released next Monday, managing director Greg L’Estrange said yesterday.
Mr L’Estrange told the Australian Securities Exchange that investors should disregard previous financial information about the proposed mill in favour of Monday’s update.
Gunns sought a further extension of its share trading halt yesterday. It first sought the halt late last month to give it time to work on an equity-raising prospectus.
The move came after the Singapore-based Richard Chandler Corporation decided not to proceed with a $130 million investment in the company on March 9.
Gunns had intended to use the investment to eliminate debt and prepare for a start on the proposed mill.
Major onsite earthworks were completed by Hazell Bros at the end of last month.
But since the start of this month Gunns’ long-time media adviser Matthew Horan has resigned and Mr L’Estrange has been spending more time interstate amid speculation of a company name change and a move of its headquarters to Melbourne.
Monday’s market update is expected to include the timing of the proposed equity raising.
• John Lawrence on Tasmanian Times: Last Roll of the Dice
• All John Lawrence: here
• Jarvis Cocker: here, including, Gunns Ltd: A pig without lipstick, here
• Wednesday: via Dr Warwick Raverty:
A wonderful and enterprising bod has kick-started an Avaaz petition re stopping the Tamar Valley pulp mill. Please encourage all your contacts – nationally & globally – to sign & circulate!
This is what it says:
Friends,
I just created my own petition on the Avaaz Petition Site. It’s called: Stop the Tamar Valley Pulp Mill from being built.
I really care about this issue and together we can do something about it! Every person who signs helps get us closer to the goal of 100 signatures — can you help out by signing?
Click here to read more about it and sign:
http://www.avaaz.org/en/petition/Stop_the_Tamar_Valley_Pulp_Mill_from_being_built/?launch
Campaigns like this always start small, but they grow when people like us get involved — please take a second right now to help out by signing and passing it on.
• Stora Enso Q1 profit halves to $97 million
Paper maker Stora Enso Oyj’s first-quarter net profit halved to (EURO)74 million ($97 million), mainly because of lower paper prices and smaller demand for renewable packaging materials.
The Finnish-Swedish company said Tuesday that revenue fell slightly in the period, to (EURO)2.67 billion from (EURO)2.62 billion a year earlier. Net profit in the quarter last year was (EURO)156 million.
Stora said it expects slightly higher sales in the second quarter but warned of temporary interruptions at some plants.
“There will be maintenance stoppages in several European mills and the benefits of improving variable costs are expected to become only slowly apparent in the results,” Stora said. “The main maintenance impact is anticipated to be in the biomaterials business area.”
Like other forest products companies, Stora has been struggling with persistent overcapacity in European markets and low demand, forcing it to cut production, close mills and lay off thousands of workers.
In February, Stora announced 240 layoffs as part of a planned annual savings target of some (EURO)70 million.
CEO Jouko Karvinen said the first-quarter performance had been in line with expectations.
“However, the return on capital employed was below cost of capital, which shows the never-ending need to improve our cost position and operational performance,” Karvinen said. “In addition to the expected price pressures and variable cost reductions only slowly improving our profit, we also had operational issues in several of our mills.”
Stora’s shares closed up almost 3 percent at (EURO)5.29 ($6.95) on the Helsinki Stock Exchange.
Karvinen stressed the importance of keeping the company’s “cash engines going strong” to finance plant construction in Uruguay and China.
“I am very excited about our most recent investment decision to build a world-class integrated consumer board and pulp mill in China based on locally grown renewable materials,” he said. “Both these announced investments are significant steps in transforming our company into a value-creating renewable materials company in markets with significant growth.”
Construction of the (EURO)1.6 billion board and pulp mill at Beihai city in Guangxi, southern China, is expected to start this year with production planned to begin in late 2014.
Last year, Stora announced plans to build a $1.9 billion pulp mill in Uruguay with its Chilean joint venture partner Arauco.
Helsinki-based Stora Enso is one of the world’s largest forest product companies, making magazine paper, newsprint, fine paper, pulp and packaging boards. It employs 29,000 people worldwide — up from 26,000 a year earlier.
Online:
http://www.storaenso.com
Full story here on Bloomberg Businessweek
• Wood Resource Quarterly: China log and lumber imports down in 1Q/12 …
… with Russia and New Zealand suppliers hit the hardest, while North America gained market share, reports the Wood Resource Quarterly
China’s demand for logs and lumber fell in late 2011 and early 2012 because of their slowing housing market. However, over the past ten years, importation of wood products has increased dramatically, as reported in the Wood Resource Quarterly (www.woodprices.com). Lately, North American log and lumber exporters have increased their market share in China at the expense of exporters in Russia and New Zealand.
The full article can be found by downloading here:
China_log_lumber_imports_early_2012.xlsx_.pdf
• What’s in a company name change?
Leon Gettler, BusinessSpectator
It hopes a name change will give it the opportunity to make a break with that past. Also, most of the company’s investor base is in Melbourne and Sydney and indeed, Launceston-based Gunns last year held its annual general meeting in Melbourne for the first time ever. Relocating to Melbourne could help the company escape the intense media and political scrutiny in Tasmania.
http://www.businessspectator.com.au/bs.nsf/Article/OneSteel-Gunns-name-change-Arium-Enpax-pd20120425-TP4SV?opendocument&src=rss
• Garry Stannus: Gunns and Vica …
1. ASX
Greg L’Estrange claimed in his 23 April announcement to the ASX that
“…The TCT is seeking declarations from the court that, amongst other things, the Pulp Mill Permit and certain other permits issued under the Pulp Mill Assessment Act 2007 lapsed at midnight on 30 August 2011. The Director of the Tasmanian Environmental Protection Authority formed the view that this was not the case and announced this decision and the reasons on 28 September 2011…”
It must be noted that Alex Schaap satisfied himself that the Pulp Mill Permit had not expired due to the Project having substantially commenced by August 30 2011. However, Mr Schaap did not express any opinion on the status of those certain other permits – the dam permits – which did expire. Yet the announcement by Gunn’s CEO Greg L’Estrange clearly allows the Stock Exchange and the general public, to think that Mr Schaap had formed the view that the Pulp mill permit, the dam permits had not expired.
[Pardon the ‘did not form … did not lapse’ negatives in the following sentence; they are tricky but important]:
Alex Schaap did not form the view that the Pulp Mill Permit and certain other permits issued under the Pulp Mill Assessment Act 2007 did not lapse at midnight on 30 August 2011. He simply formed the view that the Pulp Mill Permit itself had not lapsed. Further, he made no mention of Gunns reference to “certain other permits” [the dam permits] except to note that the proper test for the Pulp Mill Permit ‘substantial commencement of the project’ was not to be confused with the “‘substantial completion’ ” test that is required for dams under the Water Management Act 1999.
My claim here, that the dam permits did expire, is also part of the TCT case. Its validity is also implicit in the application by Gunns for new dam permits, which were subsequently granted by the Assessment Committee for Dam Construction. Gunns publicly at the time fudged the matter of the expired dam permits, but out of the limelight, went and applied for new ones. The ACDC received submissions against this, including from the TCT and myself and Maddi (I think it was her, our good fellow TT correspondent). In spite of strong argument why new permits couldn’t be granted, the ACDC approved the applications. We were able to appeal, to the Supreme Court. However, liability of many $$$s possible debt and the mortgage won the day, so it was left to TCT to carry the battle in its other legal action which had already been developed – the action that is referred to in Gunn’s misleading ASX announcement.
It is interesting to note that Alex Schaap also wrote that:
“I am not purporting to exercise any statutory power and so any conclusion I come to has no legal effect and nor is it binding upon any person.” Neither did Gunns make this point clear in its ASX announcement. But in Mr Schaap’s written decision, it sounded good, and it provided his empty announcement with some much needED padding.
2 TWS
Of more interest is some other news, which I read in the Examiner [http://www.examiner.com.au/news/local/news/environment/opposition-to-pulp-mill-remains/2529625.aspx] ‘Opposition to pulp mill remains’ MATT MALONEY 22Apr2012 04:00 AM
THE Wilderness Society will not change its opposition to Gunns’ Tamar Valley pulp mill even though industry sees it as a key outcome of Tasmania’s forestry peace agreement.
Wilderness Society spokesman Vica Bayley said opposition to the $2.3 billion project was “mainstream” and “widespread and well-founded”, contrary to the belief of the state’s major political parties.
“Pulp mill protest groups around the state, including The Wilderness Society, have opposed the mill since the day it was proposed and will continue to do so,” he said.
Friends of the Tamar Valley spokeswoman Anne Layton-Bennett last week claimed that anti-pulp mill community groups had not been invited to contribute to the forestry statement of principles and subsequent intergovernmental agreement.
Mr Bayley confirmed environmental groups involved in the process held the same views as these community groups.
Timber Communities Australia spokesman Barry Chipman said environmentalists needed to reconsider their pulp mill opposition for the peace deal to work.
“Our involvement in the process was based on three outcomes: peace in the forest, certainty, and the pulp mill going forward,” he said.
“We haven’t seen an indication that any of these goals can be achieved yet.
“What is extremely frustrating is that for some players in this process, it’s a winner-takes-all approach.”
Deputy Premier Bryan Green would not be drawn on what The Wilderness Society’s continued opposition to the pulp mill meant for forestry peace negotiations, instead saying an agreement was the best chance of delivering a sustainable industry and conservation outcomes.
“The government has not wavered in its support of a plantation-fed pulp mill at Bell Bay which all of the signatories are well aware of,” he said.
Greens forestry spokesman Kim Booth yesterday called on Gunns to issue a statement to the Australian Securities Exchange and investors, telling them that court action may kill the pulp mill project.
Gunns on Friday failed in a bid to force the Tasmania Conservation Trust pay a $400,000 bond for their Supreme Court challenge on the validity of state-approved permits to build the mill.
“Gunns must be upfront with its investors and the ASX that this court case may find that the company has no permit to proceed, which will mean that the pulp mill project is dead,” he said.
A Gunns spokeswoman said the company would not comment on matters before the court.
It is good to see Vica Bayley make these public comments. Opposition to the pulp mill is “mainstream” “widespread and well-founded”. How interesting to see Gunn’s response when contacted for comment: “the company would not comment on matters before the court”. That’s strange, considering the very next day the company did exactly that in its ASX announcement, and in doing so, misrepresented Alex Schaap’s opinion, as discussed above.
• Richard Colbeck
SENATOR THE HON RICHARD COLBECK
Senator for Tasmania
Shadow Parliamentary Secretary for Fisheries and Forestry
Shadow Parliamentary Secretary for Innovation, Industry and Science
M E D I A R E L E A S E
26 April, 2012
Bob Brown finally sees the wood for the trees
Senator Bob Brown’s back-flip this week on the capacity of harvested forests to regenerate confirms the lunacy of his previous preaching about landscape destruction, Coalition Forestry Spokesman Richard Colbeck said.
The Mercury newspaper this week published comments from Senator Brown in which he acknowledged that logged areas have great potential to recover quickly and again become biologically diverse with plant and animal life.
“It is mystifying why Bob Brown has waited this long to speak the truth about responsible forest management but it is welcome nonetheless,” Senator Colbeck said.
“Bob Brown should apologise to the forest scientists and professional foresters who he has been slandering for decades.
“Forest scientists have long been telling us that a native forest industry is better for carbon storage. It is better for biodiversity, better for water quality, is chemical free and provides better landscape values which in turn is better for tourism.
“It has made no sense for Bob Brown to argue against an activity which offers the very values that he and his green crusaders are purportedly seeking.
“In fact, it is testimony to the expertise and land management of forest workers that the 572,000 hectares of forests that environment groups are claiming as high conservation value includes areas regenerated from clear fell harvest techniques.
“It appears retirement has finally allowed Bob Brown to speak the truth.
“Perhaps he will now also call off the destructive attacks on Tasmania’s forest industry by environmental groups and let the industry get on with the job of responsibly managing Tasmania’s forests,” Senator Colbeck said.
