gunns told

Gunns told to wipe out its debt pile

20 Mar, 2012 11:36 AM


GUNNS shareholders say the company should conduct a big capital raising that will fix its balance sheet once and for all as an offshore investor mulls a cornerstone stake in the embattled group.
The timber company has been considering raising at least $200 million through a share sale but investors have urged Gunns to raise more equity in order to properly address its $580 million debt and lay the foundations for its $2.3 billion pulp mill project, The Australian Financial Review reports.

"They need to kill debt off in one fell swoop," said one shareholder who wished to remain unnamed. "The more Gunns raises the better. Then Gunns can go it alone and don't even need a joint venture partner for the pulp mill. They need to raise to take out solvency concerns. There is no point in raising unless they can see their way to a net cash balance sheet."

The Australian Financial Review

Source: http://www.afr.com