Former Gunns chairman John Gay buying two of company's wood mills, timber drying plant, in Tasmania, sources say

LOS ANGELES , October 18, 2011 () – Former Gunns Ltd. Chairman John Gay is in the process of acquiring two of the company’s wood mills and a timber drying plant, according to a report in The Australian, Oct. 19.

Gay, who quit Gunns in May last year after a shareholder revolt, is now looking to purchase Gunns’ sawmill at Deloraine, a veneer mill at Somerset, and a timber drying and finishing plant in Launceston, all in Tasmania.

According to The Australian, the plan was confirmed by industry sources.

Gay has in the past been an outspoken supporter of native-forest logging, which is highly controversial in Tasmania and Gunns has since made steps to move away from its dependence on native forests.

His resignation from Gunns on May 27, 2010, followed a sell-off of company shares by institutional shareholders over the company’s old-growth logging. New managing director Greg L'Estrange has dramatically set about reshaping Gunns, The Australian noted.

The Tasmanian Greens party is arguing that any supply of timber by state-owned Forestry Tasmania (FT) to the Somerset and Deloraine mills would undermine the AU$276 million intergovernmental agreement on forests. Greens spokesperson Kim Booth said it would also breach a commercial settlement between FT, Gunns and the crown stipulating that Gunns' retired wood supply contracts cannot be on-sold.

The primary source of this article is The Australian, Sydney, Australia, Oct. 19, 2011.

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