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in-timbercorp-vote-20090807-ed1k.html

Forestry investors in Timbercorp vote
Philip Hopkins
August 8, 2009

FORESTRY investors in the collapsed Timbercorp Group, faced with the danger their trees could be confiscated by their landlords at the end of September, must vote on whether to sell or recapitalise their schemes in a bid to realise their investment.

Growers at a meeting in Melbourne yesterday voted on a resolution that would empower Timbercorp liquidators KordaMentha to sell or recapitalise the various forestry schemes while maintaining the growers' rights to the trees.

Growers must submit their vote by 4pm on Monday, with a decision to be announced on Tuesday.

KordaMentha and the Timbercorp Growers Group - overcoming months of conflict - urged growers to back the resolution, which is non-binding.

Liquidator Mark Korda told the meeting, attended by about 400 growers at Etihad Stadium, that all the leases on the land on which the trees were growing were in default - $7.2 million in rent was owed - with most of the leases expiring on September 30.

The landlords would then have the right to terminate the leases and, in most cases, take ownership of the trees.

The Federal Court previously awarded the liquidators an extension in which to pay the rent while the liquidator determined how best to proceed.

Mr Korda said that more than 50 expressions of interest had already been received to buy or recapitalise the forestry assets, with more than 20 from ''substantial'' parties.

Final binding offers are due by September 18 to enable the liquidators to obtain money to pay the rent.

''Strong market feedback is that maximum value will be achieved through keeping all assets together as an integrated forestry business,'' Mr Korda said, with all of the proceeds from the trees being returned to growers.

He said the schemes required at least $342 million over the remaining 19 years - $169 million that growers had already committed to pay, and $173 million from the responsible entity, Timbercorp Securities, which was insolvent and in liquidation.

If the $342 million was invested, the schemes would generate a net return of $590 million over the next 19 years.

Returns per hectare would range from $3010 to $8329, depending on the year and project.

Mr Korda said independent forestry expert URS had found that Timbercorp's growth rates and yield estimates for trees in the Green Triangle were, respectively, 16 per cent and 26 per cent too high, but were accurate for plantations in Western Australia.