Mr O'Connor says the 'lion's share' of the funds will come from private banks and savings. (ABC News: Emily Woodgate)
MAP: Triabunna 7190 RELATED STORY: Loan sought for mill purchase The business poised to buy Gunns' Triabunna mill has rejected claims the Tasmanian Government is set to bankroll the sale.
The family-run business Fibre Plus Tasmania attracted criticism after revelations it had asked the Government for a loan to help it buy the woodchip mill on the east coast.
But a joint owner, Ron O'Connor, says the loan would make up a "relatively small" proportion of the mill's overall sale price.
In a statement, he said the "lion's share" of the money would come from private banks and the business's own savings.
The statement said any government loan would generate a commercial rate of interest.
"A loan is just that, a loan. It is at a commercial rate of interest and it has to be repaid," he said.
"It is not a matter of taking money away from other Government activities as some people are trying to portray it.
"In fact, we will not only be repaying any loan, but contributing significantly to the local economy which supports communities, creates jobs and generates taxes and other revenue for Government.
"As a family business, we would not be doing this if we believed we would not make a profit."
Mr O'Connor's spokesman says the conditional sale could be finalised as soon as today.
Smithton cuts
Gunns has confirmed it is cutting its workforce at its Smithton sawmill, fuelling speculation a local consortium is set to take over the site.
Gunns management visited the hardwood sawmill at Smithton yesterday to break the news that 20 of its 65 workers are being made redundant, with the plant expected to close early next year.
The company has made no secret of its intention to sell off assets in case it cannot find a joint venture partner to help finance the $2.3 billion dollar Tamar Valley pulp mill, and reduce debt.
Gunns will not comment on a potential buyer, but it is believed a local consortium is looking to acquire the site to develop a powdered milk processing factory.
The ABC understands the details are still being finalised and an announcement is expected by the end of the week.
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