Gunns sale ends native forest operations
One of Australia’s largest timber and pulp producers, Gunns Limited, has put an end to all of its native Australian forest harvesting with the completion of the sale of its final native forest milling site.
Following a prolonged legal wrangle in the Supreme Court of Victoria with the family-owned Hermal Group, the Melbourne-based buyer of its Heyfield native forest sawmill site in Victoria, Gunns this week announced the $28 million deal had been finalised.
Although the initial deal for the sale of the Heyfield site was announced in 15 May, a legal dispute relating to one unnamed aspect of the sales contract prevented the finalisation of the deal. However, the company this week announced the dispute with Hermal Group has now been resolved.
The sale marks the end of Gunns’ native forest harvesting activities, and the company says it is now sourcing all of its wood supply from plantation-based sites. In an ASX press release published this week the company said:
“The conclusion of this sale completes the exit of Gunns from all operations based on sourcing of wood supply from native forests and its transformation to a plantation only forest products business.”
The Heyfield sawmill sale is part of a larger campaign by the company to sell off its non-core assets to help fund a restructure and repay the debt required to build its $2.3 billion pulp mill at Bell Bay, Tasmania.
Gunns shares have been suspended from trade since early March as the company works on its recapitalisation activities, which have also included native forest mills in Tasmania and Western Australia.