will shareholders get any money back, page-4

Leslie White

April 22, 2009
NO IMMEDIATE fire sale of Timbercorp's water or horticultural projects is likely to occur.

Many of Timbercorp's horticultural assets are locked up in "independent" trusts and infrastructure funds that mean they could not be sold off by a receiver.

Most of Timbercorp's 120,000 megalitres of water is tied up with horticultural projects, and investors retain legal ownership of the crops, which makes a fire sale of either asset difficult.

Profit from the resulting sale of the crops belongs to them - Timbercorp makes money from being a project manager on the horticultural properties, rather than from the end sale of the product.

A spokesman for Timbercorp said the company had water assets for sale as part of the horticulture land sale process rather than on its own.

Timbercorp has significant interests in olives, almonds, mangoes, table grapes, citrus, and avocados, as well as timber plantations.

Australian Olive Association president Paul Miller said Timbercorp's olive operations, which supply about half the industry's oil, were "good farms with good oil and a good marketing set-up".

"If they were for sale (as an unencumbered olive business), would they be attractive? Emphatically yes," Mr Miller said.

The Weekly Times understands Timbercorp's massive olive properties at Boort and Boundary Bend, which have been on the market for some time, are highly unlikely to sell, given complex conditions currently attached to the sale.

Economist and forest industry analyst Dr Judith Ajani said if Timbercorp failed to survive, the company's 98,000 ha of forestry land would likely be bought by other forestry companies.

Timbercorp has so far failed to sell some 40,000ha of bluegum plantations on the condition it leases back the land from the buyer.

The trees would continue to be owned by investors, but this would not discourage other players in the MIS and plantation industries from buying at reduced prices, she said.

"They're still assets with value," Dr Ajani said.

It was unlikely the plantation would be bought for carbon credits as the initial price of carbon would be too low, she said.

The Victorian Government recently refused to fund an expansion of the Port of Portland, which can handle only a quarter the amount of chips expected to be harvested in the green triangle this year.

"Timbercorp is still in discussions with the Port of Portland about a built-for-purpose facility," the Timbercorp spokesman said.

The spokesman did not comment on whether it would be viable to truck chips to other ports.