ZwuI have gone through a lengthy review of your posts so there...

Zwu

I have gone through a lengthy review of your posts so there are a few more to come:

This is your post :
"This GNS's $175m "divestment" is so complex that no wonder not many people understand it.

This "divestment" is to "sell" the young trees first and then to "buy" them back when they are mature. So in essence, it is like a mortgage - GNS mortgages the young trees for a $175m loan first and then pays the loan off plus interest at the end - but the interest will have to paid much higher than normal due to complexity.
So why GNS didn't make this "divestment" an explicitly "loan"/"debt" arrangement for the sake of simplicity?

The only purpose I could imagine was to avoid the word "debt"/"loan" deliberately, otherwise GNS might breach its loan covenants. So this may also reveal what an awful financial situation GNS is in."

Well In have read and reread the documents and its in stark contrast to the announcement:

"Under the arrangement, Gunns will retain the freehold land associated with the standing timber. Timber supply to Gunns processing facilities will not be impacted as a result of the divestment, with Gunns continuing to manage the forest estate. Future harvested timber associated with this plantation area will be acquired at a market value from GMO Renewable Resources, with the harvest profile of the plantation reflecting a 28 year rotation"

Here is clearly states that the purchase price of the Timber is at market prices and as such has nothing to do with interest at all. Secondly had it had a calculated price at the end of the rotation this has a contingency attached to it and it would have been noted in the financial statements for 2009. No where has this contractual concept been noted. It therefore does not substantiate as you claim that these are the acts of a desperate company. Yes they freed up equity but in a long rotation this is a very viable process so that you free up cash. It was in fact Auspines asset in the first place.

So where is your source that suggests it has even any type of sale and leaseback process.