a better option ?

At least they are offering a deal for ALL investors .And, the stench of failed GTP low life executives/Directors don't appear.

"Still hope for Great Southern timber projects

Bryan Frith

16 September 2009

IF the talk is right, the sales process for the failed Great Southern Plantations has unearthed an offer for the group's managed forestry projects that is expected to be recommended by the receiver McGrathNicol.

Pulpwood Plantations (PPPL), established by West Australian businessman Gordon Martin, has put forward a proposal that seeks to bypass the receiver, to manage and fund six of Great Southern's 11 timber schemes.

PPPL has said it will invest $10 million to $20m to manage the schemes through to harvest.

Former Great Southern director and deputy chief executive Phil Butlin is on the PPPL board, and it is suggested other former Great Southern managers are involved.

PPPL is backed by major US hedge fund Och-Ziff, which has signed an in-principle heads of agreement to acquire 50 per cent of PPPL.

The proposal is said to have come from a consortium of wealthy individuals put together by prominent West Australian businessman John Poynton.

It is suggested Tony Jack (formerly ITC) is involved. ITC is one of the few successful MIS schemes and, in conjunction with Zurich Capital Markets, was responsible for pulling Australian Plantation Timber out of receivership -- believed to be the only successful rescue of an MIS scheme.

Great Southern was placed in administration in May, whereupon the group's bankers appointed McGrathNicol as receiver.

Early this month the receiver called for expressions of interest from parties interested in acquiring all or some of the business of Great Southern and to replace Great Southern Managers Aust Ltd (GSMAL) as the Responsible Entity for all or some of the managed forestry schemers.

The receiver said the RE was totally insolvent and, under current circumstances, there was no way forward for many of the schemes.

PPPL is seeking to have the grower investors call meetings of the six schemes to replace GSMAL as RE with Primary Securities, associated with lawyer Robert Garton Smith.

PPPL has written to grower investors asking them to sign powers of attorney so Primary Securities can call the meeting on their behalf.

PPPL claims to have received an overwhelmingly positive response with more than 2000 growers responding, more than the 5 per cent needed for each project to requisition a meeting.

But PPPL will require more than 50 per cent of the votes by value of all growers in each scheme to replace the RE.

Moreover, it will require at least 75 per cent of the votes at the meeting to make proposed changes to the constitution.

Those changes include agreeing that PPPL will receive an additional 34 per cent of the net harvest proceeds of the timber schemes. That's in addition to the 5.5 per cent which the RE already receives.

PPPL claims that will align its interests with growers and give it the incentive to maximise the proceeds from the harvest.

As part of Great Southern's failed Project Transform, KPMG did an independent analysis of the aggregate pre-tax cashflows of the various timber schemes.

Based on that analysis and PPPL's statement, its fees could range from 10 per cent to 34 per cent, and over four to five years may total more than $100 million.

In contrast, the fee proposed by the rival consortium is a normal management fee, with no large take of the harvest proceeds.

The rival consortium does not include any former Great Southern personnel.

The rival proposal involves all of the 11 Great Southern schemes rather than the six under the PPPL proposal.

However, PPPL has flagged that if its proposal is accepted by the growers it will assess the possibility of extending its proposal to the other five schemes."