Gunns shares on hold

SHARES in Gunns have been suspended from trading while the woodchipper considers the implications of the $276 million forestry agreement signed between the Tasmanian and federal governments.

By InvestSMART · 9 Aug 2011

By InvestSMART ·
9 Aug 2011

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SHARES in Gunns have been suspended from trading while the woodchipper considers the implications of the $276 million forestry agreement signed between the Tasmanian and federal governments.

Gunns requested the suspension yesterday, after the shares went into a trading halt on Thursday. The Tasmanian and federal governments announced the signing of the intergovernmental agreement on Sunday.

"The company is unable at this time to provide further clarity to the market in respect of the agreement and accordingly has sought a suspension of trading," Gunns said.

"The implementation of this agreement has potential material implications for the company."

Gunns said it was likely to have talks with the Tasmanian government over implementation of the agreement and would provide clarity to the market.

Gunns expects to provide the market with a further update this week. Gunns shares last traded at 20.5?.

Prime Minister Julia Gillard announced the deal on Sunday, which was based on a statement of principles signed last year by industry groups, environmentalists and the Construction, Forestry, Mining and Energy Union.

The intergovernmental agreement includes $85 million to support contractors and their families affected by the downturn and $43 million to protect new areas of high conservation value forests.

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Frequently Asked Questions about this Article…

Why were Gunns shares suspended from trading?

Gunns requested a suspension while it considers the implications of a $276 million intergovernmental forestry agreement signed between the Tasmanian and federal governments. The company said it cannot yet provide clarity to the market and that the agreement’s implementation has potential material implications for the business.

What is in the $276 million forestry agreement announced by the Tasmanian and federal governments?

The intergovernmental agreement—announced by Prime Minister Julia Gillard—includes $85 million to support contractors and their families affected by the downturn and $43 million to protect new areas of high conservation value forest. The deal was based on a statement of principles signed last year by industry groups, environmentalists and the Construction, Forestry, Mining and Energy Union.

How could the forestry agreement affect Gunns shareholders and everyday investors?

Gunns itself has said the agreement’s implementation could have material implications for the company, which could affect shareholder value depending on how it changes contracts, operations or the company’s financial position. Everyday investors should watch for the company’s updates and official announcements to understand the specific impacts.

Has Gunns said when it will update the market about the forestry agreement?

Yes. Gunns expects to provide a further update to the market this week and indicated it will likely have talks with the Tasmanian government over implementation of the agreement.

What immediate trading history was reported for Gunns shares?

The article states Gunns requested the suspension after a trading halt earlier in the week, and that Gunns shares last traded at 20.5.

Who announced the deal and who was involved in creating the agreement's principles?

Prime Minister Julia Gillard announced the deal. The agreement was based on a statement of principles signed last year by industry groups, environmentalists and the Construction, Forestry, Mining and Energy Union.

What support does the agreement provide for contractors and communities?

The agreement allocates $85 million to support contractors and their families who are affected by the downturn in the forestry sector, aiming to ease the social and economic impact on those communities.

What does it mean when Gunns says the agreement has ‘potential material implications’?

When Gunns refers to ‘potential material implications,’ it means the agreement could have significant effects on the company’s business. That could include changes to operations, contracts or financial outcomes, but Gunns has said it needs further discussions and will provide more clarity in its upcoming update.