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Gunns shares keep falling
NICK CLARK | January 11, 2012 12.01am Mercury Tasmania

GUNNS shares dropped away as a perfect storm of bad news for the company swirled yesterday.

The share price dropped below 10c for the first time to close at 9.7c valuing the firm at $82.3 million.

The negative sentiment for the company defied a rise of 46 points on the S&PASX 200.

Shadforth analyst Matthew Torenius said nothing was going right for Gunns with poor ABS building approval statistics and a rising Australian dollar "not helping".

Industry sources believe the main worry for the market is about negotiations for an extension to a $340 million senior debt facility, due for repayment on January 31.

European debt concerns also appear to have hit hopes for a joint venture partner and financial backer for the proposed Bell Bay pulp mill.

Mr Torenius said the collapse in Gunns' fortunes meant it would likely be a minor partner in any pulp mill joint venture.

The share price plunge came as Gunns confirmed deliveries to its Bell Bay sawmill had stopped.

Gunns' spokesman Matthew Horan said the mill was shut down for maintenance.

"It is a standard shutdown for a couple of weeks over the Christmas break," he said.

In its pre-Christmas update, Gunns said it was negotiating with core debt facility providers to extend the existing facilities until December 31 this year.

The company hopes a sale of its $120 million Green Triangle land will be completed by January 31.

The sale, which needs Foreign Investment Review Board approval, was originally targeted by the company for completion by March 31 last year at a price of $254 million.

Gunns is due to pay owners of its Forests derivatives $2.3 million on January 16.