the financing task ahead

I look at the GNS financing task as follows;

Mill Cost $2.5bn (equity $1bn, debt $1.5bn, probably worst case for equity)
Gunns needs $500m for its share but will probably also get back $100m or $200m for sunk costs which I am assuming at this stage is included in the $2.5bn.
Gunns needs to sell 50% of its plantations for perhaps 10% discount to book which should realise around $400m.....hence GNS can fund the mill and maybe take some cash out, up to $100m on my numbers. They could also sell 100% of the forest assets as the buyer is there if needed.

GNS is also selling its softwood assets seperately which I suspect will go for a big discount to book for 2 reasons (1) the book value reflects the acquisition cost of auspine which was very expensive and 2) i believe they may have encumbered the land partly when they sold 75% of the trees to GMO). hence I am pencilling in $150m versus a book value of $268m for this stake, anything above this will frankly be a bonus.

GNS currently has net debt of about $400m. If they are able to take out $100m from the mill and $150m from softwood they are almost debt free and still own 50% of the plantations. Or they could be net cash if they sell all of the plantations.

Either way if GNS gets the funding package up then the debt gets paid.........if the funding package doesnt get up then GNS sells its forestry business anyway..they already have the buyer waiting...so debt free anyway but no pulp mill in that case.

either way it seems GNS will not go under due to debt issues, it will be something else......

just IMO.

Lord