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Browse > Home / Business / Gunns sells former Auspine plantations Gunns sells former Auspine plantations
Posted on November 25, 2008, 4:04pm and updated on November 26, 2008 at 11:20 am
Three quarters of the pine plantations formerly owned by Auspine in the Green Triangle have been sold to an American investment management firm for $175m.

Gunns Limited, which took over the South East timber giant in February, announced to the stock exchange today it had sold 33,000 hectares of softwood plantations in the region.
However, a company spokesperson told The Border Watch the sale would not impact on the region’s mills or workers involved in management of the plantations.

“All that has happened is the resource has changed hands — it will still need to be milled,” he said, explaining that the change of ownership would not lead to new markets for the product after harvesting.

“We don’t anticipate this will have any change to the mills, which we believe are competitive.”

He said the divestment to GMO Renewable Resources, which is still subject to regulatory approval, would clear Gunns’ balance sheet.

This would improve the prospects of securing funds to build the $2b Bell Bay Pulp Mill in the Tamar Valley, he said, adding the transaction would further reduce debt after a recent $336m equity raising program.

Gunns will retain the freehold land associated with the standing timber under the arrangement, according to a statement to the stock exchange from Gunns.

Future harvested timber associated with the plantation area will be acquired at market value from GMO, with the transaction restricted to a single rotation.

Gunns will retain responsibility for replanting and ownership of future rotations.

Meanwhile, the Gunns’ spokesperson said he did not believe the increased prospects of the Tasmanian pulp mill would impact on the $1.5b plant proposed for Penola.

He said Gunns was focused on its Tasmanian project and not interested in the South Australian development, but there was room on the market for two processing plants.

“Australia basically buys all its pulp from overseas and there is a big export market,” he said.

“If the resource is there, value-adding makes sense — every shipload of pulp is equivalent to four shiploads of chips, so it also has carbon trading benefits due to reducing transport.”