Funding fight holds up sale of woodchip mill

The mill was to be sold on June 29 to a local company, Fibre Plus Tasmania, promising sawmillers future income from residue sales and aiding Gunns' debt reduction program.

A spokesman for Fibre Plus confirmed yesterday it expected the sale in the "not-too-distant future" but he did not state a completion date.

Gunns and Fibre Plus refused to disclose the purchase price, which is believed to be about $10 million. The sale is understood to hinge on the resolution of the buyer's financing mix.

Fibre Plus's principal, the timber transport operator Ron O'Connor, said the lion's share of the price would come from bank financing and his company's resources, but he ran into Green opposition to a state Department of Economic Development loan to aid the purchase.

The Greens, who hold the balance of power in the Tasmanian Parliament, said too much public money had been sunk into propping up an unviable woodchip industry, and none should go into subsidising a purchase of the Triabunna mill.