AGRO-FORESTRY group ITC’s capital raising of between $13 million and $15 million is more than a cosmetic effort to improve its appeal to foreign interests.
AGRO-FORESTRY group ITC’s capital raising of between $13 million and $15 million is more than a cosmetic effort to improve its appeal to foreign interests.
ITC is keen to establish itself as a conduit for institutional forestry investment from Europe and the US but has recognised it needs scale to achieve that.
Bringing on board Alan Newman’s Futuris Corp with a $10 million investment will help the company secure the land needed to project itself up to the 80,000 hectare level it believes is needed to be of interest to offshore funds.
The Futuris investment, combined with $3 million to $5 million, is through a convertible debt facility arranged by Hartley Poynton.
Hartley Poynton parent HP-JDV and several of the firm’s associates like Rob Black sit with a strong list of names on the ITC register.
Other investors include ex-Sealcorp directors Tim Casey and Dennis Banks, stockbroker Terry Hogan, Michael Perrott’s Troika Securities, Bill Burdett of Burdett Buckeridge & Young and United Group founder Charlie Bontempo.
The new investors, if converted to shareholders by the August 2002 conversion date, will represent between 21 per cent and 23 per cent of ITC’s register, with Futuris potentially taking a 15.5 per cent to 16 per cent position.
ITC managing director Tony Jack said the deal provided the capital needed to complete land purchases rather than trying to rush the much talked-about merger with Yates.
Mr Jack said the company was still looking for mergers or acquisitions that would take it up from its current plantation management level of about 50,000 hectares.
“An investor who can look beyond the short-term volatility of the stock market is important for a company growing long-term timber assets, and Futuris subsidiary Elders Ltd has a long history of supporting rural industry,” Mr Jack said.
The move also comes during a tough time for tax-effective investments, even blue gums, which are seen to hold the high ground in terms of investment credibility, particularly ITC, which is the only forestry scheme to win approval from ratings group Van Eyk.
ITC had budgeted on planting about 18,000ha under products it is selling at the moment but has scaled that back to 12,000 or less.
