GUNNS is this morning expected to announce it has sold up to a 40 per cent stake in the company to a Kiwi billionaire with a history of taking over companies in distress.
Singapore-based Richard Chandler was yesterday reportedly close to finalising a deal to buy between 25 to 40 per cent of Gunns' shares in a move designed to generate up to $350 million.
Mr Chandler earnt his reputation by turning a family fortune of $10 million into $4 billion by investing in companies in difficulty while also pushing for economic reform and good governance.
Gunns has been in a trading halt since Monday pending an announcement about ``capital raising and equity investment'' by the start of trade today.
TG Financial's Tony Gray said the development would put Gunns in a much better position to secure a joint venture partner to build its $2.5 billion Bell Bay pulp mill.
``It's not just raising a bit of money, it's raising a lot of money,'' Mr Gray said.
``You would not need to do this to only pay down your existing debt.''
It's not a controlling stake, but it would give Mr Chandler significant amount influence over the company's direction.
The Richard Chandler Corporation website states the investment company's main purpose is to ``accelerate prosperity for all''.
``We are responsible investors who put principles before profits,'' the website states.
Mr Gray said he doubted the new investor would have any intention of abandoning the Bell Bay pulp mill.
``The only thing that can give them a big return is the pulp mill,'' he said.
The company would still require a joint venture partner to afford to build the mill.
Since 1986, the Richard Chandler Corporation has provided capital to companies and governments from Asia and Africa to Latin America and Eastern Europe, and invested in a range of industries including telcos, power, steel, banking and energy.
The corporation also holds a significant stake in Chinese firm Sino Forest.
Mr Chandler reportedly made the investment as the company battled internal probes, regulatory investigations and a crashing stock price.
Mr Chandler did not respond to an interview request.
Greens leader Nick McKim warned any potential investors they would face a massive community backlash.
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