I have stated that I will vote NO for another RE,I have stated that the land is encumbered,and whoa and be hold what does PPPL say in a paragraph? exactly that,which leads to the next point that the bloody trees are yours,not the banks,and the longer you leave the banks to hang out to dry the better for us investors.
When I say investors I mean all not just a few the whole box and dice that is 48000 investors.
PPPL has reminded me of the second rotation,in the second rotation it is a cheaper deal and the trees after the coppice is trimmed the trees are harvested in the eighth year.
**************** Martin concedes Gt Southern bid defeat 9-December-09 by Jonathan Barrett
Western Australian industrialist Gordon Martin has conceded defeat in his bid to take control of Great Southern's timber schemes.
Mr Martin told WA Business News late yesterday that the level of proxy support ahead of tomorrow's vote on his proposal indicated his bid would not attract the necessary support. "We've taken on the receiver, the banks and Gunns and that's a formidable opponent," Mr Martin said.
"Let's not kid ourselves, we're not going to get there."
The Mr-Martin led Pulpwood Plantations - backed by well known names including the former soccer club owner and fast food magnate Nick Tana and former Great Southern executive director Phillip Butlin - was set up to bid for the schemes.
The fall of Pulpwood leaves one active bid in the market, with Gunns putting its proposal before investors on December 23.
A third bidder, the Tony Jack led Black Tree, is seeking investor support to call a meeting early next year, but must rely upon an unsuccessful bid by Gunns to remain in contention.
Mr Jack has been forced by the corporate regulator to update his proposal after projections contained in the preliminary proposal were deemed inappropriate.
Pulpwood was the first group to offer a "rescue plan" to investors after Great Southern collapsed under a mountain of debt in May.
Great Southern operated 45 forestry, horticulture and cattle managed investment schemes on behalf of 43,000 investors, however the bulk of money, investors and public interest is in the flagship timber scheme.
Mr Martin took on Great Southern receiver McGrathNicol and has long advocated that the receiver has the interests of the bank creditors, rather than investors in mind.
The major secured lenders, including Commonwealth Bank and ANZ, appointed McGrathNicol in May.
Late last month, McGrathNicol nominated Gunns as its preferred candidate to take over the schemes, and will throw votes it controls, worth up to 30 per cent, to Gunns.
Proposals need 50 per cent worth of votes to take over the timber schemes.
Mr Martin criticised a key component of the Gunns bid that has sold a second rotation right - the potential for investors to grow more trees on the land after harvest - in exchange for a rent reduction on the land.
*** take note people *****
He said that the bank creditors would prefer this because it takes away the encumbrance, which lowers the price of the land.
The bank creditors are collectively owed almost $600 million as a result of the collapse.
It has been estimated that the value of the second rotation is between $150 and $200 million, which is far more than the rent reduction is worth. Gunns has argued that the second rotation is open to a legal challenge and that it is the only group to cement a value for the rotation in the form of a rent reduction.
*** take note everybody ***
Mr Martin said it was also a concern that the Gunns proposal included a change of constitution that would lower the hurdle for the responsible entity to make changes to the schemes in the future, which could conceivably include winding up the projects.
The Pulpwood bid was dealt a major blow when a handful of research houses recommended the Gunns bid over Pulpwood's proposal, which is certain to sway financial planners advising their clients during the voting process.
Research reports noted that Gunns' presence in the forest products market, strong track record and cheaper fee model meant its proposal was stronger than Pulpwood's; although there was no firm recommendation on the second rotation right.
Pulpwood spent more than $1 million during the complicated proposal process.
Mr Martin sent a note to investors yesterday advising them against travelling long distances to the meeting in Perth to vote on the proposal, when it was so unlikely to succeed.
GTP Price at posting:
12.0¢ Sentiment: None Disclosure: Not Held
