New Forests to acquire forestry assets of bankrupt Tasmanian timber company Gunns for AU$330M; Sydney-based investment fund submits winning bid for 175,680 hectares including 96,850 hectares of eucalyptus and 3,780 hectares of pine plantation
April 24, 2014
– NEW Forests, a Sydney-based timber investment fund, has signed an agreement to acquire the forestry assets of the 139-year-old bankrupt Tasmanian timber company Gunns for about $330 million.
New Forests, which raised a $707m fund to invest in Australian and New Zealand timber assets this year, beat five other final bidders in a fiercely contested auction.
Four of the bidders only wanted the timber assets — 175,680 gross hectares of freehold land incorporating 96,850ha of hardwood eucalyptus and 3780ha of softwood radiata pine. Another two bidders were after a licence to build a pulp mill.
New Forests was not interested in bidding for the licence to build a pulp mill on a 650ha site. The investment firm’s Singapore-based spokesman declined to comment on Gunns when contacted by Data Room.
As much as 70 per cent of the proceeds of the sale will go to hedge fund Anchorage Capital Group, which bought Gunns’ debt for between 40c and 45c in the dollar from a group of banks, including ANZ. Gunns’ secured lenders were owed $445.7 million, according to PPB Advisory in February 2013.
KordaMentha was appointed Gunns’ receiver in September 2012. Its spokesman had no comment on the sale process.
Established by former Hancock Natural Resource Group executive David Brand in 2005, New Forests manages about 450,000ha of land in Australia, the US and Asia, as well as about $2.3 billion in capital, according to its website.
The Singapore-based spokesman for New Forests declined to comment on the firm’s historical returns.
Gunns was considered the last basket of timber that could be secured in a politically stable country. Other timber assets for sale in China or South America are viewed as risky investments.