Tiwi Islands – Northern Territory

Two Tiwi forestry projects insolvent 20 Jan 2010

Posted by tiwiccbb on January 20, 2010

http://www.ntnews.com.au/article/2010/01/20/117321_nt-business.html

Two Tiwi forestry projects insolvent

January 20th, 2010

RECEIVERS for the Tiwi Islands forestry company Great Southern have lodged a formal application to wind up the plantation.

Perth-based McGrath Nicol will also shut down the Great Southern Group’s renewable fibre project.

These two branches of the group failed to attract any replacements as responsible entities.

This means the two managed investment schemes are insolvent. Recent reports suggest a note was sent to investors by the receiver that indicated the plantation needed $3 million spending on it “in the next six to nine months to remain operational” and any replacement responsible entity would incur a shortfall of $36 million over the life of the plantation.

The renewable fibre project needed $8 million in the next nine months and would suffer a $20 million shortfall over its life.

Both projects were on leased land on the Tiwi Islands.

The plantation is on 38 per cent leased land, while the renewable fibre project is 25 per cent.

But when rent was not paid last year, the Tiwi Land Council terminated the leases in October.

The mainland leases were paid until Christmas Eve – when the Tasmanian-based Gunns took control of the remaining eight projects.

All future payments on these lots must be made by Gunns.

Gunns’ takeover of responsibility has increased its holding of plantation timber from about 200,000 hectares to about 330,000ha, according to Gunns chief executive Greg L’Estrange.

“It’s a significant push to increase the size of our exposure to plantation timber in line with the board’s policy,” he told The Australian.

Gunns announced recently that following the December deal with Great Southern grower investors over the nine schemes, it would be able to provide its long-planned Bell Bay pulp mill in Tasmania with 100 per cent plantation timber.

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