Gunns denies holding talks on plantation sales

Greg L'Estrange
Greg L'Estrange

Tasmanian timber company Gunns appears to be quietly preparing for a start on its controversial Bell Bay pulp mill early this year.

The company denied yesterday that it was involved in selling off its Tasmanian plantations.

A company spokesman said that Gunns was not negotiating on the sale of its plantations.

But it is believed that the company is keen to sell its plantations and lease them back to use the money for clearing more of its debt.

It would also mean that it would not have the ongoing expense of maintaining the plantations while it waits to make a start on the pulp mill.

The Gunns spokesman also declined to comment on whether finance had been locked in before Christmas for mill construction.

He said that when financial arrangements were completed, there would be an announcement to the Australian Securities Exchange, in accordance with compliance regulations.

"When we are ready to go, we are ready to go," he said.

Gunns started to shed jobs and sell or shut surplus infrastructure late last year.

Gunns managing director Greg L'Estrange confirmed at the company's annual general meeting in November that woodchip operations around the state would close.

He had already announced that the company's last Scottsdale sawmill would close early this year adding to the loss of several hundred jobs.

Its wine, retail and other agricultural interests had been sold earlier in the year.

Mr L'Estrange told shareholders Gunns was confident that it was close to securing a joint venture partner for the pulp mill.

But at that stage he was depending on a sizeable government compensation package for the company pulling out of native forest harvesting as part of Tasmania's forestry industry reforms.

That looks less like happening since the Queensland floods.

A decision on federal government permits, which depended on more than 12 months of Bass Strait hydrodynamic testing and analysis, is expected in the next few weeks.