Tasmanian Forestry group Gunns Ltd will sell some of its softwood plantation on the Australia mainland to raise $175 million, and use the funds to pay down bank debt.
Gunns is selling 33,000 hectares in the "green triangle" region of South Australia and Victoria to international timber investment GMO Renewable Resources.
"Gross proceeds from the transaction will amount to approximately $175.2 million, which reflects full book value of the forest asset," Gunns said.
"The proceeds from the transaction will be applied primarily to reducing bank debt."
Under the deal, Gunns will retain the freehold land associated with the standing timber.
Gunns said timber supply to its processing facilities won't be impact due to the sale because it will continue 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," the company said.
The funds raised from the sale add to the $336 million gathered under a recent equity raising.
Gunns is still trying to secure financing for its planned pulp mill in Bell Bay
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