GUNNS shares recovered by 3.74 per cent on the back of more than 16 million trades yesterday as Tasmanians spoke of how disappointing it would be if the timber company moved its head office away from Launceston.
Chairman John Gay has been under pressure from interstate business interests to quit the company's board and take fellow Tasmanian directors Robin Gray and Richard Millar with him.
On the back of a 98 per cent half- year profit drop, the three men have been asked by large institutional investment groups to leave the company, with Mr Gay labelling the request a Greens-led stunt.
But shareholders have shown concern for the company's performance, wiping more than 30 cents off its share price in recent weeks.
Gunns' lowest recorded trade was around 50 cents back in 2000 and it looked as though the stock was headed there again before yesterday's small rebound to 55 cents.
Mr Gay said that if he left, then Gunns' head office would relocate to the mainland.
Financial analyst Tony Gray said that would be bad news for the Launceston economy.
"You would, over time, see few directors and highly paid executives in Launceston," Mr Gray said.
"I can't put a number on it but it's not healthy for a local economy.
"At the moment, when people fly in for the AGM, they stay in Launceston, the executives use local services and buy local motor vehicles, so there are lots of flow-on effects."
Launceston Chamber of Commerce executive officer Lou Clark said the chamber would be disappointed if Gunns chose to move its head office from Launceston.
"We are doing business in a global and connected community these days," she said.
"We certainly have a number of very successful companies that operate their head offices out of Launceston and compete on the national and international stage."
Mr Gray said the biggest challenge facing Gunns at the moment was not directorship, but whether it could refinance or pay back $40 million worth of debt due next month.
"Given the difficulty of other financial companies in obtaining finance, if they can do it without any issues it would be a real confidence booster," Mr Gray said.
Gunns is also due to update the market on a business restructure and its pulp mill finance search next month.
Pulp and paper analyst Robert Eastment said the uncertainty around Mr Gay's tenure on the board would not impact on the planned $2.5 billion Bell Bay project.
Gunns can't afford to build the mill on its own but Mr Gray said Gunns could not afford to write off the $150 million in capital it has spent on the project to date.
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