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Gunns sets deadline

HELEN KEMPTON

February 24, 2010 06:42am

Gunns Ltd has told the Australian Stock Exchange it hopes to name the outside investors for its pulp mill by the end of June.

The company's share price hit an all-time low yesterday as the market continued to absorb the 98 per cent fall in profits Gunns posted in the first six months of this financial year.

By the close of trade, the share price was 65c.

Questions about the future of the company and how it will attract investment in its controversial $2.2 billion pulp mill at Bell Bay continued.

However, Forestry Tasmania would not answer questions about how much money it is owed by the timber company.

There is speculation that Gunns owes the Government Business Enterprise $20 million for logs provided to its woodchip mills but Forestry said dealings between the two entities were a commercial-in-confidence matter.

Gunns chairman John Gay offloaded three million company shares in December, just two months after he and some of Gunns' other seven directors bought up big.

And Sydney-based investment company Investor Mutual Ltd also ceased to be a substantial shareholder early this year after selling 2.6 million shares.

Last October, Mr Gay bought more than 93,000 shares in Gunns, Robin Holyman bought more than 80,000 shares, Robin Gray acquired 8821 and Richard Millar bought more than one million.

Paul Teisseire spent $14,699 acquiring another 16,000 shares.

Premier David Bartlett would not comment on Gunns' financial performance yesterday.

"I do not comment on publicly listed companies or try to affect the stockmarket," Mr Bartlett said.

But he reiterated his belief that a pulp mill in the Tamar Valley would save the state's struggling forest industry.

"If Tasmania had the pulp mill there would be no problems in the forest industry," he said.

Under the restructure Gunns announced in response to its dismal half-year financial results, the pulp mill would be a separate entity, removed from its woodchip, native forest logging and plantation estate businesses.

Gunns told the ASX it was talking to several "purely financial" investment parties and would seek to announce its external investors by the end of June.