A contract for the sale of Gunns’ Heyfield hardwood sawn timber business for $28 million is expected to be completed later this month.
“Completion of this transaction will finalise the exit of the company from operations based on native forest wood supply. The company ceased accepting resource from native forest harvesting in Tasmania in June 2011 and has subsequently sold mainland based operations in Western Australia and now Victoria,” Gunns said in a market update to the Australian Securities Exchange.
The mill is being sold to Melbourne-based Hermal Group. Clinton Tilley, from the Hermal Group, says the Australian Sustainable Hardwoods consortium had a long history in timber production.
“We’re extraordinarily excited and can’t wait to get in there and work with the existing management team and to make the mill better for its prosperity, the mill and its staff and the long-term longevity of the town,” he told the ABC.
“The existing management team are all staying, which we are all delighted about.
“In terms of operational, there will be improvements made to the plant over the coming 48 months to assist in its productivity.”
The process for realisation of Gunns’ investment in the Green Triangle forest estate is proceeding.
Gunns has received indicative offers for its mainland based export woodchip operations and has started a structured sale process for this business, which includes the Portland woodchip export facility.
“In respect of the proposed capital raising the company is continuing in its discussions and diligence with a select group of institutional investors in relation to a substantial capital raising. The terms and nature of this proposed capital raising remain confidential and incomplete. It is likely that the capital raising process will continue for what is at this time an indeterminate period,” according to Gunns.
Gunns also sought a continuance of its suspension from trading “until the appropriate time, following finalisation of details of its proposed recapitalization”, and managing director Greg L’Estrange has had his appointment extended until 31 December 2012.
