Out-of-pocket Great Southern investors are on the verge of installing Gunns to take over the defunct timber projects, after a lengthy meeting in Sydney today.
Out-of-pocket Great Southern investors are on the verge of installing Gunns to take over the defunct timber projects, after a lengthy meeting in Sydney today.
The Tasmanian forestry company received the necessary investor support to take control of eight out of nine timber schemes, and is almost certain to secure the ninth that had its vote deferred until early January.
Great Southern operated 45 forestry, horticulture and cattle managed investment schemes on behalf of 43,000 investors, however the bulk of money, investors and public interest, is in the flagship timber schemes.
This morning's vote covered schemes from 1998 to 2006, inclusive. After counting proxies and votes cast by those at the meeting, Gunns secured control over the 1998-2005 schemes.
The vote on the 2006 scheme was deferred until early January, although a last minute proxy lodged in favour of Gunns is expected to give the Tasmanian company control over that scheme, assuming the late proxy is deemed legally valid.
There were originally five bidders vying for control of the schemes, although two soon withdrew their offers, leaving Gunns, Pulpwood Plantations and Black Tree to fight for the projects.
Pulpwood, headed by local industrialist Gordon Martin, withdrew its bid after failing to attract the necessary support, while Black Tree did the same after being overlooked by Great Southern receiver McGrathNicol.
The receiver held up to 27 per cent control over votes in the early schemes, which it presumably allotted to its preferred bidder Gunns. The Tasmanian company needed 50 per cent worth of votes to be cast in its favour to take over each scheme.
The schemes faced being wound-up if a bidder didn't win control.
Investors speculated at the meeting that a wind-up of the schemes could yield a return of 10 cents in the dollar using the Timbercorp experience as a guide, meaning almost any alternative was worth pursuing.
The Gunns proposal was more in line with the interests of Great Southern's bank creditors than other bidders, and parts of its proposal have been criticised by rivals who claim it puts the interests of the banks ahead of investors.
Gunns has previously indicated it would consider making a proposal for the 2007 scheme, while it has not indicated any intention for the 2008 scheme which faces numerous challenges.
