2007 and 2008 going, going, gone...

http://www.theaustralian.com.au/business/receiver-to-wind-up-two-mis-schemes/story-e6frg8zx-1225818579719?from=public_rss


THE Perth office of receiver McGrath Nicol has begun a formal legal application to wind up two orphan elements of defunct rural operator Great Southern Group, its 2007 timberlot plantations and its 2008 renewable fibre project.

The two elements of the group's managed investment schemes attracted no interest from potential replacements as Responsible Entity, unlike the nine schemes planted between 1998 and 2006 whose management was taken on just before Christmas by Tasmanian timber group Gunns.

Without an RE, the two most recent Managed Investment Schemes appear to be doomed as they are a long way from harvest, and insolvent.

According to a note sent out to investors yesterday by the receiver, the 2007 scheme needs $3 million spending on it "in the next six to nine months to remain operational" and any replacement RE would incur a shortfall of about $36m over the life of the plantation.

The 2008 scheme, which has a different name because it is understood to include coppice timber being regrown from harvested stumps, needs $8m spending in the next nine months and is expected to have a shortfall of about $20m over its life.

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Related Coverage

* Gunns wins Great Southern schemes The Australian, 23 Dec 2009
* Vote on Great Southern assets deferred Adelaide Now, 23 Dec 2009
* HANDS UP, SAYS GUNNS The Australian, 13 Dec 2009
* Solution for Great Southern investors The Australian, 25 Nov 2009
* Gunns gets the nod The Australian, 23 Nov 2009

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A further complication is that both schemes include leased land in the Tiwi Islands off Darwin and, after rent was not paid last year, the Tiwi Land Council terminated the leases on October 1. Some 38 per cent of the 2007 scheme's lots are on leased land, as are 25 per cent of the 2008 schemes. The mainland leases were paid up until December 24, the day Gunns accepted control of the final 2006 scheme, when McGrath Nicol warned landlords it would not be liable for further lease payments. Any payments made from now on will be made by Gunns.

Gunns' takeover of responsibility has increased its holding of plantation timber from about 200,000 hectares to about 330,000ha, according to Gunns chief executive Greg L'Estrange.

"It's a significant push to increase the size of our exposure to plantation timber in line with the board's policy," he said.

Gunns announced last week that following the December deal with Great Southern grower investors over the nine schemes, it would be able to provide its long-planned Bell Bay pulp mill in Tasmania with 100 per cent plantation timber. The controversial mill is yet to go ahead.