May 26, 2010 FORESTRY companies continue to falter as Gunns shares hit a 10-year low.
And 11,000ha of land formerly owned by failed managed investment scheme giant Timbercorp is up for sale.
Gunns manages 275,000ha including 50,000ha in the Green Triangle. Its shares dived to just 35 cents last week, after the announcement of a class action by shareholders alleging deceptive conduct.
The company announced on Monday it had sold its hardware businesses for $40 million, but its shares did not rebound.
Gunns will also auction 28,000ha of native forest and sell its Tamar Ridge winery to reduce debt.
The St Helens toxic water scandal, where toxins which kill human cells were found in water and matched to toxins in a nearby plantation, continues to hang over the company.
Gunns' woes follow the closure of the Paperlinx Wesley Vale and Burnie mills and the collapse of managed investment scheme companies Timbercorp, Great Southern and Forest Enterprises Australia.
It also follows the liquidation of NSW company Hardwood Resources after legal action by a union to obtain workers' entitlements and Elders' loss of 26,000ha of plantation to a fungus.
Gunns is struggling to sell its native forest woodchips as the crucial Japanese market moves toward plantation chips accredited by the Forest Stewardship Council (FSC).
FSC chief Michael Spencer said Gunns native forest chips "faced issues" in obtaining accreditation and many of Gunns' plantations are ineligible, as the company cleared native forest to plant them. Meanwhile, 11,000ha of land bought by Plantation Land Ltd from Timbercorp will be sold. The area includes 30 properties in the Green Triangle, leased to US company Global Forest Partners.
The Queensland government recently sold its plantation company for $600 million, $100 million more than expected.
GNS Price at posting:
27.5¢ Sentiment: None Disclosure: Not Held
