ANZ Bank sells AU$200M debt owed by failed timber company Gunns, says it is no longer providing financial support for proposed Tamar Valley pulp mill; receivers confirm six parties are submitting final bids for timber plantations, pulp mill permits
January 28, 2014
– ANZ Bank has sold its lion's share of the debt owed by the failed timber company Gunns, heading off a fresh campaign by opponents of the stalled Tamar Valley pulp mill.
The bank said yesterday it was no longer part of the Gunns' banking syndicate. Sources confirmed it sold its share of the debt -- almost $200 million -- in September last year.
ANZ's decision removes the bank from an invigorated anti-pulp mill campaign, as activists gear up to target Gunns' secured creditors to pressure receivers KordaMentha not to sell the collapsed company's pulp mill permit to a new proponent.
``ANZ is no longer a part of the Gunns Ltd banking syndicate and not involved in providing financial support for the proposed Tamar Valley pulp mill,'' a spokeswoman said late yesterday.
The bank would not give a reason for its decision, which could be seen as a lack of confidence that KordaMentha will be able to achieve a high sale price for the remaining Gunns assets, including the pulp mill permit and site, as well as tree plantations.
It may also have wanted to lower its bad-debt exposure and avoid being drawn into another anti-mill campaign, as it was in 2008 when it eventually ruled out bankrolling the $2.5 billion project.
KordaMentha has said several parties are interested in purchasing the permit and plantations as a package to kick-start the mill, while others merely want the trees, with six entities engaging in a final expressions-of-interest process, ending on March 31. In a response to a request from the receivers, the minority state Labor government yesterday introduced legislation to remove legal doubts surrounding the validity of the permit fast-tracked through state parliament in 2007.
The ``doubts removal'' legislation yesterday provoked the Greens to try to move a motion of no confidence to bring down the government, of which it was a part until Labor dumped a power-sharing alliance earlier this month.
The motion was opposed as a stunt by the state Liberals, who sided with Labor to ensure the government -- and the pulp mill legislation -- survived.
Groups opposed to the project last night welcomed confirmation from ANZ that it had sold its share of the $446m Gunns bank debt. ``Actions speak louder than words and for one of the big four Australian banks to cut their connections to this pulp mill is another demonstration that it's a risky financial proposition,'' said Vica Bayley, Tasmanian campaigns manager for The Wilderness Society.
Businessman and mill critic Geoffrey Cousins said it would have been ``hypocritical'' of the ANZ to have allowed the mill permit to be sold, given that the bank concluded in 2008 that the project failed to meet global guidelines for responsible development.
Mr Cousins said backers of the project should realise community opposition had not waned.
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