i hope gunns shares are on our olympic team as they would certainly win gold in the diving comp.

Do Gunns shareholders have a voice? Market up today but Gunns shares continue to dive. Gunns share price down 45% since Turnbull gave his approval last October. John Gay is banking on taking all the things you dont want to give him, turning them into pulp and making the companies fortune. Come Christmas he will be gone.

If you could ski Gunns share price you would be doing about 222 kph about now with no end in sight.

It’s currently $2.17 a share.  Investors who paid $4.56 about 3 1/2 years ago wouldn’t be too happy.

It’s comforting to know that the share market is not as easily fooled over the viability of the Long Reach Pulp Mill as our “elected representatives”.

I suspect that Scott is right, the top price was more in the order of 4.85 back in 2005 and dropped to 2.15 briefly earlier this week representing a 1.1 Billion drop in shareholder value.  This is possibly why John Gay is talking retirement of late, perhaps some of the larger shareholders have seen the light. Would not that be a wonderful day for Tasmania?

It is interesting to note that while Gunns is negotiating with its customers to help build the mill, surely the price those customers pay for the pulp would be one part of the finance package. Yet on the other hand, the deal between FT and Gunns guarantees a set margin for the price of the pulp in effect allowing Gunns to secure some of the finance through a deal on price, once again payed for by the Tasmanian taxpayer.  It is unlikely that FT would have anything in the agreement to cover this scenario given that it was most likely written by Gunns lawyers in the first place.

WHY are the shareholders putting up with john gay and his stooges,the billion plus fall is caused by john gay alone.the shareholders must be really stupid for allowing this to happen.

A logging contractor told me Gunns may be trading insolvent. I wouldn’t have any opinion on the matter but could someone explain to me what that may mean, how it could possibly have come about if it is true, how do you prove it and what are the implications for the taxpayer if our various governments elect to bale the bastards out and prop this unsustainable company up even more than is already being done?

Haven’t heard from Tomas lately. Surely he couldn’t resist having a go at the gloating untermenschen who are posting here. Perhaps Tomas was Evan Rolley after all.

Where is Tomas???  Tomas has been missing in inaction for a while now.  I think his last post was mid June. Tomas had so many email addresses that it was hard to tell which one was the real Tomas!

We had tomasrignoli
We had Tomasrignoli
We had tomasRignoli
We had TomasRignoli
All at yahoo.com.au

THEN someone had the cheek to post as a Tomas using a bigpond address and one of the other Tomases said it was identity theft!
Tomases often accused other Tomases of identity theft.

Don is probably pining for the Tomases, missing those great arguments you two (or was it three or four?) had.

On the same subject, where is Dr Kev, are they all missing in inaction???

Maybe Team Tomas and Dr Kev have are off somewhere commiserating with Big Red.  Maybe they are out with Big John looking for finance.  Maybe they are busy advising Big Dave. Could they be with Big Bob telling him how to run FT? 

Who knows, all we know is we miss them like hell!

Thanks Bob for alerting us to the missing Tomases.  I really needed something to make me smile this Saturday!

Cheers to all those who miss the Tomases and Dr Kev.

From The Real Cathran

It is illegal for a company to trade while insolvent, a perfect eg. was HIH Insurance.  The Directors can be held legally responsible if this is so.  Maybe that’s why John was looking so uncomfortable on his Virgin flight to Melbourne on Wednesday - or maybe it’s because he had to rough it with the great unwashed!  Only noticed one other person who gave him the time of day (another Launceston businessman)the rest of us just ignored him!

To check if this was the case, and accountant would have to look at the books or their creditors would have to start calling in their debts. Even I can’t believe that they would be so stupid…..but then again…....

And thanks to you Cathran for a smile on Sunday! I think I can solve the mystery of the missing Dr Kev - a few weeks back he said he had some work coming up that was going to keep him pretty busy and away from TT for a time. The missing Tomases, however, remains a mystery. Bob may be onto something though. Tomas (one of them) always maintained that his real name was not too far removed from his nom-de-keyboard -
Rignoli -> Rolley? What do you reckon?

(7) Bev’s correct, expanding a little further…

Trading whilst insolvent is the prelude in theory to a company going bankrupt. That is they owe more than they are owed. In the case of a public listed company, when they realize they are in this situation, they would notify the ASX and receivers would be appointed. They would then wind up the company and after the sale of all assets pay all creditors and lenders a percentage in the dollar of what they were owed.

All shareholders would lose their money.

The more serious side of this scenario is that the Stock Exchange and the police would investigate the actions of the directors to determine whether or not the directors continued to accrue debts and commitments knowing full well that the company would be unable in the future to meet those commitments. That is trading whilst insolvent and is a jailable offence.

In the case of what happens to the taxpayers money?
Our money by way of guarantees, subsidies etc would only be repayable if we were considered a secured or unsecured creditor. For example the ANZ bank may have a first mortgage on all the companies’ assets. They would get first bite of the cherry. In the case of a logging contractor or electrician who did work at one of their premises, they would be considered an unsecured creditor and might only receive, in the wash up, 0.10c in the dollar owed. I dare say the government would fall into the category of an unsecured creditor.

How do you prove it? The ASX proves it. If contractors/businesses aren’t getting paid they would have to sue.

Bear in mind the company has previously suggested it has a value of 1.3 billion, since then its share price has dropped by nearly a half. What that means is that it increases the chances of the company going into liquidation, decreases its chances of being able to borrow more money to bail itself out, and generally is not a good look for what can now only be considered an ailing company.

The rumour mill up this end is that there are a number of businesses and contractors who will not deal with Gunns as they have become known for being slow payers ie 90 days plus. This is an early sign of a company in strife.

Insolvency usually applies to not having the cash available to pay debts when they fall due. I would be surprised if Gunns didn’t have sufficient financial resources available ... after all it is still paying a dividend which could be cut to preserve cash.

That said it’s operations are not generating a huge amount of cash, so it does need to be careful with its investment commitments.

There may also be a significant problem when it comes to rolling over the existing debt. This may require assets sales, and could result in an insolvency situation, assuming neither a debt rollover or assets sales were forthcoming.

However, typically banks will simply up the cost of debt and require assets sales rather than force insolvency.

The other ‘insolvency’ ... debt > assets would require a massive write down of their balance sheet. Given the appreciation of land prices I would find this a little hard to believe. It is quite possible that there would be some writedowns in this years annual report (for pulp mill or Auspine) but not of sufficient magnitude to say that the equity was worthless

All the little children are so concerned about who ‘Tomas’ really is?
I would be more concerned with who might be financing Mr Gays pulp mill.
If you anti-pulp mill people spent less time blogging away to each other in your little clubroom and more time working out how to stop Mr Gays pulp mill you might yet prevent that shock that could still hit you fair betwen the eyes! 

You are all just so convinced that the pulp mill is nearly dead and its just a matter of time before the big day arrives.
I honestly think all you gaia worshippers believe your cause to be so righteous that the gods cannot but deliver you victory. That, my little salamanca fairy people, is called complacency.

Don’t forget Gunns still have political support with federal and state permits all but secured. What will you do if Gunns suddenly gets the finance and wants to start construction?
That will rock your little world.
Mr Gays dream is still only a financier away. It’s not impossible that Gunns could still get a syndicate of financiers together.

They might be closer than you all know. 
What will you all do if Government allow Gunns to re-route the water pipeline so they don’t have to bother with recalcitrant landowners?
Who are you counting on to rescue you then?

What will you all do after the police have arrested most of you and protest numbers inevitably start to dwindle?.
Will you all then stand gobsmacked, teary eyed and cursing god, remembering how close you came to stopping it? Or perhaps some of the more hardcore elements will in a fit of rage do something destructive and land themselves in serious trouble?

Good old Gunns will just keep building safe and sound behind a wall of macho police and security blokes and eventually the thing will be up and going. Gunns don’t care how much they are hated. As Mr Lennon said, it is not a popularity contest.

Based on current world pulp prices and a very generous wood supply agreement Gunns stand to make a fortune out of this pulp mill. That is all they care about. You lot say it all the time and it is true. Tasmania is still one of the few places in the world that has forests to give away and is happy to do so.

You ought to thank your lucky stars that the pulp mill proposal has collided with some of the worst market conditions in a century. If circumstances were otherwise do you think all of your bleating and childish carry on would have stopped the project?

You anti-pulp mill campaigners strike me as quite an undisciplined lot. If things get really hot I wonder whether this current generation of activists will cut it. 

I wouldn’t be so smug if were if I were in your your shoes. Circumstances can change very quickly

Sirgio Marlton

Thanks for the reality check Sirgio.  Nobody I know against this mill is getting complacent.  I would imagine that re-routing the pipeline would add significant cost to the project.  The full cost of the mill is increasing by the day with the price of steel going up.  All legal options that could stop the mill have not yet been exhausted (one is pending).

14; Fair comment as far as it goes Sirgio but as David says, nobody’s getting complacent.
The problem I have with these types of comment is that they are very big on pointing out the problems but not so big on suggesting solutions.Possibly if the wording was less patronisingly offensive this would be less obvious.
Actually I’d say the ant-pulp mill campaigners are a very disciplined lot. Given the time this has been running, there’s been very little dissension in the ranks. I’ve nothing but respect for the way the “anti” campaign is being run. Would you care to suggest some improvements? New tactics perhaps…?

It is difficult to see how Gunns can become insolvent.

They have a huge resource from their MIS trading, which hands over excessive amounts of farmland to them at no cost to themselves. They simply get investors to buy a crop, and with this tax-free money thay then acquire the land for their own future investments and timber supply. Income, with negligible up-front costs! ($122 million this last financial year)

On the other hand, the Old Growth Forest timber supply sees them well into the future with a deal that benefits them at a rock bottom price. They don’t grow the stuff. It is simply cut down and shipped to them at less than value. The maintenance is paid for by the tax payer as Forestry consistently make a loss, which we subsidise.

Their infrastructure requirements are given to them for nothing, as we pay for that too. ($250 million per year on average) Even the pipeline has been assessed and mapped out for them by a ‘consultant’, at a cost of $500 000 (?) to us and the ‘benefits’ have been quantified.

What Gunns are currently doing is a tidying-up exercise to make their books look good for potential investors. Cutting out the dross, like Auspine and contractors, reducing staff levels and maximising their apparent returns. 

However, the good thing that comes out of this is that their publicity is bad, and their stock prices are burying themselves in a deep hole. The company is worth a lot less now that it was even three months ago, and the attempted borrowing against company value ratio is dropping by the day. (It is possible that Gunns is now worth less than $1 billion and they will now need getting on for $2.5 Billion to complete the mill project.) This may mean, if they do manage to get the finance, the board of Gunns may change, and they could be dealing more with Kevin Rudd than David Bartlett, as he speaks their language!

How do you say ‘Sovereign Risk’ in Mandarin?

Tommy-sirgio- salami you make me laugh lab rat.The best joke in 5 years. Gunns share price made me laugh till i shit my pants lucky there is a river of tears flowing out of gunns hq to wash my arse with.,HA HA

Come to a TAP meeting, Sirgio, to see how complacent we are NOT!

It would be almost impossible to re-route the pipeline across non-hostile land - it simply MUST go through some properties, the owners of which are adamant that it will not. That schemozzle could tie this thing up for bloody aeons.

Sirgio sound suspiciously like you-know-who!!

ISN’T the launceston council one of the land holders saying no.They cant even get the first length of pipe out of the dam.

I’m amazed that the shareholders aren’t asking some hard questions. You’d think they’d have sorted out the land for the pipeline right back at the start. It wouldn’t have been too hard if they’d gone in, before the project was on the nose, with a bundle of cash. “Now Mr Farmer, here’s a nice piece of cash for signing up. If the mill goes ahead we’ll be paying you an annual rental for your land. If it doesn’t, this payment is yours to keep”  If they’d done this whilst the project was before the RPDC I think most would have signed up because they were looking at compulsory acquisition anyway.
It’s obvious that they were either banking on the Government sorting the problem, in which case why didn’t they get it written into the pulpmill assessment act or they simply stuffed up and overlooked it. I’d suspect the latter.

re# Sirgio Malton

1) Yes, Pulp mill opponents must be wary of a ‘white knight’ financier with more money than sense. The most recent financing strategy (with a partner) is far more credible than the 100% debt or project debt + equity strategies.

If only because it brings in more balance sheets to cover cost overruns.

2) “political support with federal and state permits all but secured.” I believe Peter Garrett directly contradicted this statement when Gunns last made it. On further state government intervention, I think the odds of Bartlett being Premier after the next election would lengthen considerably if he acted to support the pulp mill on the pipeline. He would ruin both the new Labor image and his chances of gaining Green support for a minority Premiership.

3) “Based on current world pulp prices and a very generous wood supply agreement Gunns stand to make a fortune out of this pulp mill.” In any cyclical industry, be in the right place and the right time and you can make a fortune. However an alternative suggestion:

How do you make a small fortune in the pulp industry? Start with a large one.

Unfortunately Gunns doesn’t have a large fortune. It has a large debt and a poorly performing business.

The answer to the question; “Can the pipeline be re routed if farmers say no?”.
Of course it can, but legal advice suggests that it would render the Pulp Mill Assessment Act null and void. The political process would have to start again.

“Could the land be compulsory acquired?” Again yes, but at what political cost to David Bartletts Government? The Premier cannot risk the perception of a close working relationship between Gunns and the Labor Govt. To put a pipeline through for public benefit would be difficult to sell and seen for what it is, taxpayers assisting a private company.

The Pulp mill needs the water. It needs finance.
Unless the water is guaranteed, the finance will not be forthcoming.
In the current financial environment who would be brave enough to invest when so many questions remain?

Gunns told a lot of lies about construction contracts ,finance, enviromental guidelines being met and the shares stayed high.  Now the shares have come down like a PAN AM JET