Gunning for mill sale but who will pay?

Gunns agreed to sell its Triabunna woodchip mill to local buyer Fibre Plus Tasmania. The sale was originally slated for 29 June, is believed to be about $10 million, and is intended to help restructure the Tasmanian forest industry and reduce Gunns’ debt — but completion is dependent on the buyer resolving its financing.

The buyer is Fibre Plus Tasmania. Its principal, Ron O’Connor, said most of the purchase price would come from bank financing and the company’s own resources, with the sale also hinging on the mix of financing including a proposed government loan.

The state Economic Development Board recommended an undisclosed loan and Premier and Treasurer Lara Giddings accepted that recommendation. Final agreement on any loan depended on Fibre Plus meeting financing conditions.

The Greens, who hold the balance of power in state parliament, argue that too much public money has already been used to prop up an unviable woodchip industry and say public funds should not subsidise the Triabunna mill purchase.

No. Greens leader Nick McKim said the party did not support the loan but was not aware of any gross malfeasance or corruption that would justify a no-confidence motion, despite such a suggestion from party member Kim Booth.

The sale was presented as vital to a restructured Tasmanian forest industry. Fibre Plus said the deal would promise sawmillers future income from residue sales and assist Gunns’ debt-reduction program, potentially supporting local industry cash flows.

The forest peace package was presented to state and federal governments by former ACTU secretary Bill Kelty as part of broader industry restructuring proposals. According to the article, Lara Giddings and the federal government had not yet responded to that package.

The article notes that Gunns’ shares closed up 0.5 at 28, indicating a modest positive market reaction on the day reported.