Dream on...

Just when you thought the croupier had gone home, Morningstar analyst Peter Warnes was reported in yesterday’s press as saying ... “This is the last throw of the dice.”

He was referring to Gunns’ plan to raise another $400 million from shareholders. Business Spectator said “the funds would be used to help the company cope with the planned sale of non-core assets”. What does that mean? Are the non-core assets being sold? Or will Gunns be required to pay ‘purchasers’ to take the assets off its hands?

The sale of assets has proved to be tortuously difficult for Gunns.

The sale of Green Triangle land has been awaiting settlement for ages. The latest announcement re the Green Triangle land was only about shuffling the asset into another entity, not reaping any cash from a third party.

State of the state

 

Tasmania — A Cash Flow Analysis Based on a Working Paper commissioned by Ruth Forrest MLC and a presentation to the Economics Society, Hobart, 22nd March 2012.

The aim of this paper is an assessment of Tasmania’s past, current and forecast financial position, over a 9 year period, from 2006/07 to 2014/15. In particular this will include a close look at the General Government Sector’s (GGS) Cash Flow Statements to

• Reclassify inflows and outflows into more appropriate categories of ‘operating’, ‘investing’ and ‘financing’ as will allow an easier interpretation of Government financial statements.

• Examine the components of each category of inflow and outflow.

• Examine the source of inflows as Federal vs State sourced revenue.

• Provide a basis for understanding and measuring sustainability.

Nobody's buying

Nobody’s buying.

At least not Gunns’ assets.

A few are still buying CEO Greg L’Estrange’s story as described in the latest half yearly report and presentation of possibly the worst garage sale ever.

A year ago Gunns owed secured creditors $631 million. Now it’s $587 million.

The staggering State

 

Following the Bartlett tsunami the Premier has managed to point the State in roughly the right direction from a budgetary aspect although she is still being sparing with her analysis of our predicament if the media release (here) which accompanied the release of the State’s Mid Year Financial Report MYFR is any guide.

The Premier is struggling to send a positive message when she reverts to the old line that “the Report showed the Government remained on track to avoid going into net debt”.

Most readers would draw the fairly obvious conclusion that we are net debt free.

But nothing could be further from the truth.

In a week when forest protesters were severely chastised for their lack of truth one may have expected the Premier to choose her words more carefully.

Ta Ann as saviour

Malaysian owned Ta Ann was lured to Tasmania with grants and assistance ostensibly to add more value to native hardwood timber than the woodchipping option.

 

The company now finds itself at the centre of heated public discussion about the possible over cutting of native forests. Environmental groups have take action to disrupt market to bring pressure to bear upon Ta Ann.

 

Your correspondent Wishy asks: “what evidence do the MLC’s or any other Ta Ann supporters have that NGO information campaigns are actually what has impacted Ta Ann’s profitability and led to the shut down of capacity? Has anyone looked at Ta Ann’s financials in this regard? Are they available for scrutiny?”

Last roll of the dice

The capital raising proposal soon to be presented to shareholders represents Plan X for Gunns Limited.

If the previous plans including closures, layoffs, looting IGA funds and asset sales had worked there would have been no need for Plan X.

But they didn’t.

Trouble ahead for Gunns' MIS

What happens to MIS Growers’ plantations once the Responsible Entity supposedly looking after the tree crops runs into financial difficulties? What has felled others may also befall Gunns.