Found This Online...MESSAGE TO GUNNS DIRECTORS...

Found This Online...

MESSAGE TO GUNNS DIRECTORS

http://gunnsforests.com/index.html

We are deeply disappointed with Gunns sudden decision to unilaterally convert the FORESTS Hybrids into ordinary shares.

Given the contemplated conversion ratio of 421.7 shares and the last traded price of 16c per ordinary share, Hybrid investors will face a substantial loss of $32 on their initial $100 investment. This will increase to a $78 loss if - as widely contemplated - the next step would be a deeply discounted rights issue at 5c.

We believe there is a fundamental breach of rights of the Hybrid holders because:

1.The Issuer Exchange Notice cannot occur when the Hybrids and ordinary shares are in a trading halt – resulting in no liquidity for Hybrid investors wishing to exit their investment. The Terms of Issue did not anticipate a unilateral Conversion Event to take place while the Hybrids were in a trading halt for over 6 months. This defeats the purpose of a Notice Period.

2.The Directors of Gunns have a statutory duty to Hybrid noteholders to protect the value of their investment. Given the likelihood of a discounted rights issue or worse – a receivership – we believe the Directors are in breach of this duty to creditors (Hybrid unit holders) by forcing a conversion into ordinary shares.


We also note that the Directors have the discretion under clause 3.14 of the Terms of Issue to adjust the Conversion Ratio, increasing the number of ordinary shares per Hybrid converted.


We acknowledge that Gunns is going through a very difficult period, but given its very large and valuable forestry assets, we believe value can be restored in time to both ordinary shareholders and to the Hybrid unit holders.


We request an immediate announcement by Gunns to retract the Conversion Notice. We reserve our rights on this matter - including seeking a Court sanctioned injunction against conversion.

This public message is provided by the FORESTS Investor Group Supporters (FIGS) please join or contact us at [email protected] .




MESSAGE TO HYBRID INVESTORS


First - Help protect the value of your GNSPA Hybrid investment by registering with FIGS. Send your name, address, email and number of Hybrids - to [email protected] . Given the current state of Gunns – time is of the essence – please register now - so that we can speak with a strong voice.


Second - Please write to Gunns MD Greg L'Estrange directly (feel free to use any of the above content) expressing your concern over the way FORESTS investors have been treated. Gunns contact details are:




78 Lindsay Street
PO Box 572
Launceston Tasmania 7250
Australia

Fax: 61 3 6335 5498
Email: [email protected]


Gaby Berger

Convenor

FORESTS Investor Group Supporters (FIGS)