Gunns' chairman John Gay will quit his post at Gunns to become chairman of Southern Star Corporation, effective from the next annual meeting of Gunns, scheduled for November.

Gunns has told the Australian Securities Exchange that it this week released an information memorandum to a number of pre-qualified international parties - asking potential investors to partner with Gunns in the new company.

The assets would be the pulp mill and Gunns' Tasmanian land and eucalyptus plantation resource.

Gunns will also sell its non-forestry related assets. It is understood that the Mitre 10 facility will be acquired by Woolworths - which is attempting to compete with its supermarket rival Coles, which owns Bunnings WarehouseIts native forest land will also be sold as it attempts to achieve a "social license'' across its forestry operations.

In other announcements, Gunns said it had appointed Timo Piilonen as pulp mill project director of Southern Star.

He was previously responsible for construction and operation of Metsa-Botnia's Frey Bentos mill in Uruguay - a project similar to Bell Bay.

Former Premier Robin Gray has also announced he will resign as a director by June 30.

Both he and Mr Gay had been asked to quit their directorships by a group of interstate investors who were disgruntled after Gunns' 98 per cent profit drop in the last half.