Banks give Gunns respite

THE ANZ Bank and nine other banks have extended Gunns Limited’s $340 million senior debt and $200 million working capital facility until December 31, 2012, according to Nick Clark writing in The Mercury.
The senior debt had been due for repayment by Tuesday.
However, the end of woodchipping and tough times in the timber industry have meant recent cashflow problems for the company.
An announcement last night said that one of the 10 banks in the syndicate would make a board decision in mid-February on its continued participation.
Managing director Greg L’Estrange, whose $1 million a year contract was last year extended to July 2012 only, said the facility balance was expected to be progressively reduced during the year.
He said the reduction would come as the company completed an asset sale and “finalises the Bell Bay pulp mill project investment”.
ANZ said in 2008 it would not finance the pulp mill.
Gunns has been expected to finalise a $120 million sale of its Green Triangle land and plantations today.
It has total debt of more than $600 million.