The Launceston timber company yesterday made a raft of announcements, including that chairman John Gay would step down to become chairman of a separate entity in charge of the Bell Bay project.

Key parts of the restructure plan were:

•Gunns would have at least a 51 per cent stake in new venture Southern Star Corporation, which would inherit the pulp mill and Gunns' Tasmanian eucalyptus plantation estate.

•Information memorandums had been sent to "a number" of pre-qualified international parties, offering them an opportunity to join with Gunns in the Southern Star joint venture.

•John Gay would retire from the Gunns board after almost 25 years, with staunch pulp mill supporter Robin Gray also to resign.

•Mitre 10 and other non-forestry assets, including Tamar Ridge, would be sold and jobs can't be guaranteed.

•About 28,000ha of Gunns' native forest land holding would be sold as it attempts to gain a "social licence" across its forestry operations.

Gunns also downgraded its earnings forecast for the full year from between $24 million and $56 million to between $30 million and $40 million.

Money from the sale of assets would be used to pay down debt and help fund Gunns' 51 per cent-plus stake in the new pulp mill joint venture.

While the timber industry and financial analysts welcomed the news and predicted it would improve Gunns' share price after significant drops this year, opponents of the pulp mill remained steadfast that it would never get funding.

The release to the Australian Securities Exchange said that engagement with potential equity and debt investors had progressed "positively".

If the sale of Gunns' non- forestry assets proceeds and Southern Star Corporation is developed, it would leave Gunns with timber processing facilities including Auspine, as well as woodchipping and sawmilling operations, and plantations interstate.

It is expected that Gunns would need to report to the ASX any material change in Southern Star's performance given the percentage stake it would have in the pulp mill business.

There have been no plans announced to relocate Gunns' head office from Launceston.