29/09/2009 - 15:49

Deadline looms for Great Southern assets

29/09/2009 - 15:49

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Groups seeking to take over the assets of failed agribusiness provider Great Southern have been asked if they are prepared to finance the projects from Thursday onwards, as emergency funding runs out.

Deadline looms for Great Southern assets

Groups seeking to take over the assets of failed agribusiness provider Great Southern have been asked if they are prepared to finance the projects from Thursday onwards, as emergency funding runs out.  

The ability of groups to immediately finance the projects is expected to figure in a decision by receivers for its preferred candidate for the range of assets, which includes timber, almond and olive plantations.  

Candidates expect a decision from receivers McGrathNicol imminently, as the short-term funding deal with the consortium of banks - including Commonwealth Bank and ANZ - to maintain the projects is scheduled to run-out on Wednesday.  

One group seeking to take over some of the Great Southern schemes said candidates would not start financing the schemes unless they were assured of taking over the assets.  

"No one is going to fund from 1 October if they are still in a beauty parade," a representative of the group said.  

Parties that took part in the submission process that closed last week are expecting a decision will be made by the receivers imminently for its preferred candidate, and they have been told the consortium of banks will not continue funding the schemes.  

The banks are currently owed about $600 million.

Failure to lock in funding arrangements could lead to a range of consequences, including the potential decimation of assets that need constant care and a breach of leases with landlords who could make a claim for the forestry plantations.  

The Gordon Martin-backed Pulpwood Plantations and Bunning family and Azure Capital-backed Black Tree Proprietary are two of the groups vying for Great Southern's most lucrative forestry assets.  

Early estimates put the figure needed to manage all 11 timber plantations to production at $160 million, while it would take a total of $500 million to also buy the land from the banks.  

A representative of some of the investors expressed angst over how long the process had taken.

"We are one day away from the funding running out and we are only just going to find out what bids are out there," the representative said.

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