‘Hold’ calls on Pulpwood play

Great Southern receiver McGrathNicol has telephoned investors in the flagship timber schemes urging them to hold off accepting the ‘rescue package’ lodged by the Gordon Martin-led Pulpwood Plantations.

McGrathNicol’s intervention in the bidding process comes as stakeholders grow increasingly frustrated at the way the receiver is handling the collapse of the former agribusiness heavyweight.

“We’ve got uncertainty surrounding funding and an uncertain time frame,” Save My Trees chairman Rob Burns said. “To say we’re frustrated would be an understatement.”

Save My Trees was an initiative set up to find a good commercial outcome for Great Southern investors, commonly referred to as ‘growers’. There are about 35,000 investors in the flagship timber schemes alone.

Investor representatives, such as financial planning groups, confirmed to WA Business News they received calls from the receiver telling them to wait for all the bids to be made public before handing over voting rights to Pulpwood.

Pulpwood is seeking investor support to take over the management of the schemes.

As the process drags on: two Japanese companies have terminated purchase agreements for hardwood chips coming out of Albany; the ownership of third party-leased properties is under question after repayments stopped; and there is a constant danger emergency funding required to keep the schemes afloat will cease (as has already happened with some schemes).

More than two weeks have passed since the receiver indicated it would make the other two plantation bids public, which include the Tony Jack led Black Tree Proprietary bid and a rival package from Gunns.

A McGrathNicol spokesman declined to comment on the communication with investors. It followed similar correspondence by Gunns, urging investors to delay their decision until it had outlined its own rival plan.

The receiver was brought in to look out for the interests of the secured bank creditors, which are collectively owed about $600 million.

Last month, Pulpwood delayed its deadline for investors to vote on its proposal, and in doing so avoided a potential confrontation with McGrathNicol.

Stakeholders are still unsure whether the receiver will eventually make a recommendation to investors to accept a certain timber scheme bid, or if the grower vote will be split.

Pulpwood was first to the market with a public package to develop roughly half of the flagship timber schemes, before it extended its proposal to include all but one of the plantations.

The group, headed by Coogee Chemicals chairman Gordon Martin, seemed to take a confrontational approach with receivers by working outside of the submissions process, although it now appears to be working closer to McGrathNicol.