The Tasmanian Government has approved a loan to the company buying Gunns’ Triabunna woodchip mill.
Aprin Logging had sought a loan to help buy the mill.
The Tasmanian Development Board recommended the loan be made and the Treasurer and Premier, Lara Gidding, agreed early this week.
A number of conditions have been put on the loan relating to outstanding financial and legal matters, these have not yet been resolved.
One issue outstanding is that Gunns will only agree to the sale if substantial progress is made in the forest peace plan. The plan has still not been signed by industry and conservationists.
The Wilderness Society has urged the Premier to reject the loan to Aprin.
Fibre Plus, a subsidiary of family-owned company Aprin, had asked for an undisclosed sum.
Co-owner Ron O’Connor says the loan would make up a “relatively small” portion of the total sale price and would generate a commercial rate of interest.
The Wilderness Society’s Vica Bailey says Ms Giddings must demonstrate a changed approach to public spending.
“This is about public money going into propping up an industry that is demonstrably unviable and perpetuating the native forest logging problems of the past,” he said.
“What we want to see is a new approach from the State Government whereby they embrace the Statement of Principles and invest real money, public money, in delivering outcomes that those principles present.”
The group wants more information made public before the Treasurer makes a decision.
“Let us see the detail of the Tasmanian Development Board’s recommendations to the Government, let us see the details of the loan arrangement that the Government are making to Aprin,” he said.
“Most importantly, let us see the details of wood supply assurances that Forestry Tasmania has given Aprin in relation to native forest woodchips that will continue to exported out of Triabunna.”
First published: 2011-06-29 06:40 PM
• ANZ credit covers Gunns debt
NICK CLARK | June 30, 2011 12.00am
TIMBER firm Gunns has sought new financing because it has been unable to sell assets in time for $55 million of debt and interest repayments which are due today.
Documents lodged with the Australian Securities and Investments Commission reveal that its subsidiary Gunns Consolidated Investments Limited has a new working capital facility with a “maximum prospective liability” of up to $200 million from the ANZ Bank.
Gunns has provided as collateral the former Forest Enterprises Australia softwood sawmill it bought for $47 million in January.
The company had been hoping to sell softwood plantations in South Australia by June 30 to make the repayments. While the land was valued on Gunns’ books at $254 million, a recent announcement said it would yield $107 million, was subject to the buyer getting finance, and may not settle until October 31.
Gunns has also been waiting for settlement of the sale of its Triabunna woodchip mill.