# GTP - Great Southern Plantations



## Rafa (5 May 2005)

Was just wondering if anyone out there holds GTP.

It has fallen from around $5 to $3.20 in a month, soon after it announced it was going to acquire some land up north (in Tiwi Islands) and diversify into cattle!

As a shareholder I was unpleasantly surprised with these moves, but at the same time, I am shocked at the massive fall in the share value, given the investments weren't substantial.

Having had it since the price was in the mid $2 range, i am still up! 
Be interested to hear your thoughts, information, etc... Especially fundamental information... I know technically I should have sold the damn thing ages ago!

Thanks

R.


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## It's Snake Pliskin (9 May 2005)

*Re: Great Southern Plantations..*

Considered Willmott forests?


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## Rafa (9 May 2005)

*Re: Great Southern Plantations..*

market sentiment has definitely turned against most stocks in this sector!

it amazes me constantly how things change in an instant...


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## tech/a (9 May 2005)

*Re: Great Southern Plantations..*

Its like the weather.

You can stand in the rain or get out of it!-----------


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## silent knight (10 May 2005)

*Re: Great Southern Plantations..*

TIM similarly affected. $2.35 down to $1.70 (The getting out of the rain analogy is unusual for agristocks: surely the more rain the better  ) I'm not in GTP I got out on a big retracement a long time ago when they were about $1.80. Wasn't I smart?


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## Aussiejeff (10 May 2005)

*Re: Great Southern Plantations..*



			
				silent knight said:
			
		

> TIM similarly affected. $2.35 down to $1.70 (The getting out of the rain analogy is unusual for agristocks: surely the more rain the better  ) I'm not in GTP I got out on a big retracement a long time ago when they were about $1.80. Wasn't I smart?




I attended a shareholder meeting in Albury not long ago and was NOT happy with the sudden announcement and hype about diversifying into relatively more risky operations in the tropics (cyclones, El Ninjo etc doncha know!) - so I promptly sold out all my GTP stock at $4.85 on a hunch. Had been picking up parcels of GTP from $3.25 to $4.25 so given the current price it has plunged to (I'm not surprised really) - I'M ECSTATIC!!!

In The Age Of Jitters, it seems that companies that take on additional risk when there seems to be no good reason to do so get pummelled... they had been apparently performing so well with a relatively safe southern Australia plantation scheme that it seems silly IMO to get greedy and buy into more risky areas of the planet. They borrowed for risk rather than building on a sound capital base as they had been doing?

Cheers,

AJ


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## stockman (10 May 2005)

*Re: Great Southern Plantations..*

GTP I think will suffer.

Investors won't invest much into the trees anymore as i believe the capital gain boom has ended and now tax rates are reducing there is less incentive to buy into these trees and other tax effective investments. Super surcharge was another big seller for them that they used in many of their seminars to advisers and that has been scraped as well.

Also can't invest in the copice of the trees and investors will not receive carbon credits going forward. i'd be vary wary of this stock. This years results should be excellent next years i think it will really suffer.


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## ghotib (11 May 2005)

*Re: Great Southern Plantations..*



			
				Rafa said:
			
		

> market sentiment has definitely turned against most stocks in this sector!...



Yabbut which sector?  GTP is Diversified Financials;  TIM is Materials. Both are up this morning. 

TIM has an announcement this morning welcoming a Budget provision that extends of forestry pre-payment legislation to 2008. That - I mean the extension, not TIM's welcome - might explain a rise in the share price of forestry companies. But TIM now derives 60% of its revenue from agricultural businesses other than forestry. Go figger. 

Ghoti

Edited to add:  I hold TIM


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## Julia (11 May 2005)

*Re: Great Southern Plantations..*

Today's announcement sounds quite positive and I see the stock has jumped at least a bit.

What about what was at least my original reason for buying GTP:  i.e. that there will in the future be a worldwide shortage of pulp for paper?

My original purchase was at 54 cents then more at 84 cents some years ago.
I am holding on, despite recent downturns as I believe in the stock in the long term.

Comments?


Julia


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## Rafa (12 May 2005)

*Re: Great Southern Plantations..*

That was a great pickup at such low levels Julia...

I guess its still way to early to see if the uptrend is going to continue...
My estimate is that it needs to cross $4 to get back above the uptrend started from early 2003.

I am a bit concerned that GTP has diversified into other areas plantation timber..... besides cattle, they even have vineyards i beleive, and we all know how badly the grape business is doing in general!

I think AussieJeff's comment about the Age of Jitters is very valid. This sort of fall seems more than a jitter to me...

R.


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## Rafa (6 June 2005)

*Re: Great Southern Plantations..*

Its back to the $4 level, I wonder if any TA experts out there can analyse this one for me...

There hasn't been any new developements to indicate why the stock took such a hammering in the first place (falling 35%), and besides the budget changes announced, nothing really to indicate why its gone up 20% since then either!

I, for one, am well confused!


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## Julia (7 June 2005)

*Re: Great Southern Plantations..*

Hi Rafa

I'm also watching GTP closely.  I'm no "expert", just very interested as I hold a fair chunk of my portfolio in this company.  I haven't done any charting, but, having held the stock for several years, have noticed that it does seem to have a strong run up, then similarly sharp downturn, with the next runup reaching a new high.  It usually seems to go up pre end of financial year, and, as you point out, the government confirming the tax advantages for the next two years will have helped.  I've seen a couple of broker recommendations indicating a target price of (a) $5.26 and (b) $5.14.
I'm holding on to it for now but will think about selling half the holding at about the $5.00 mark.  If it doesn't get there will hold the lot.


Is there anyone out there who may have done a chart for GTP over a few years?  

Julia


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## GreatPig (7 June 2005)

*Re: Great Southern Plantations..*

GTP over a few years...


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## Julia (8 June 2005)

*Re: Great Southern Plantations..*

GP - With thanks for the chart.

Do you have any comments on this stock?

Julia


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## GreatPig (9 June 2005)

*Re: Great Southern Plantations..*

Julia,

Not really. I'm an almost purely technical trader, and know nothing about the fundamentals of the company or industry.

I'm currently holding some, bought last month for $3.67, but will sell them the moment they look like the current run up is finished. They're part of my trading portfolio, not investment portfolio.

Cheers,
GP


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## tombeet (13 June 2005)

*Re: Great Southern Plantations..*

I sold half of my gpt shares 4.88 but you have to happy with the way they have now recovered. If you have good quality shares with reliable earnings you have to hold them in times of fear etc . 
Tom


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## Julia (13 June 2005)

*Re: Great Southern Plantations..*

Hi Tom

What do you plan to do with the other half of GTP you still hold?  Do you have a sell price in mind, or are you intending to hold them over the longer term?  Do you have some thoughts about how far the current run up will go?

Julia :


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## Rafa (24 June 2005)

*Re: Great Southern Plantations..*

GreatPig,

Have you sold yet? at what price?

R.


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## GreatPig (24 June 2005)

*Re: Great Southern Plantations..*

Yes, for $3.94.

It may bounce back up after today, but given the current state of the XAO, I'm reducing my exposure a bit.

Cheers,
GP


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## GreatPig (1 July 2005)

*Re: Great Southern Plantations..*

What's happened to this today?

Down about 16% to $3.53 as I write.

GP


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## tech/a (1 July 2005)

*Re: Great Southern Plantations..*

http://www.asx.com.au/asx/research/...me=&principalActivity=&industryGroup=NO#chart


50% increase in reported profits.

So could a fundamentalist please explain why the market has decided to sell off?


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## Julia (1 July 2005)

*Re: Great Southern Plantations..*

I've just spoken with the Company.  Their explanation is that the projected profit was $400M and they "only" achieved $365M.  When I asked from whom the $400M projection had come, ie the company or analysts, the response was "a combination of both".

There could also be some impact from the resignation of the Chairman who has been with the company since its inception, although this was announced some time ago, and they feel it wouldn't contribute.

When asked about any knowledge of any institutional sell-off, there was a degree of caginess but nonetheless a denial.

I guess there will be some of us watching with interest.   I have too much of my portfolio in GTP and have been waiting for $5 to sell half the holding. 


Julia


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## profithunter (1 July 2005)

*Re: Great Southern Plantations..*

They forecasted a 60% increase in profit but only made a 50% increase.  The forecasted profit was already factored into the share price so they disappointed the market with their actual numbers.


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## Julia (1 July 2005)

*Re: Great Southern Plantations..*

Could another factor be the cessation of buying of the tree lots which always reaches its peak at the end of the financial year?  Although obviously this has no direct bearing on the SP, there does seem to be reflection in the SP of what sales are achieved for the tree lots.

Julia


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## Rafa (1 July 2005)

*Re: Great Southern Plantations..*

I had already liquidated half my portfolio...
atleast this time there is a legitamate reason for the fall in the share price.

Could you please elaborate on this buying of tree lots Julia?


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## stockman (1 July 2005)

*Re: Great Southern Plantations..*

Doesn't make sense though because from what I've been told all their products were over subscribed.


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## Julia (1 July 2005)

*Re: Great Southern Plantations..*

Rafa,

I don't want to be quoted on this as I've not been involved in any of the GTP products other than the share price.  However, a large part of their business is selling to individuals, super funds, institutions etc. of the actual tree lots which constitute the essenceof GTP's business.  I think these lots have a ten year time frame.  i.e. a buyer purchases a section of land containing the young trees.  I don't think there is any return until the trees are mature and then logged for wood chips or similar.  (the reason I bought shares in the first place was on the basis of predictions of world wide paper shortage - the chips eventually become paper - so fromthat point of view I don't get too worried about fluctuations in the SP in the short or medium term.
Reason for possible correlation to the drop in share price at beginning of the new financial year, is that purchase of the tree lots has apparently a very significant tax advantage.  As I'm not involved in this, I don't really know what that is but a few months ago the government announced that the tax advantages would apply for at least the next 2 years.  That was when the SP started to rise again, following a period of pretty much unexplained drops.
I gather that purchase of the tree lots in the 2004/2005 financial year allows the purchaser a considerable tax advantage for the bottom line of this financial year.

The suggested reason for the connection of successful selling of the tree or vineyard projects and its obvious optimistic predictions of future profits to the SP  becomes obvious.  It could be that, with the impetus of end of year buying of core business dropping off (it might not - we'll see),  profits may fall and that is reflected in the SP.



You could contact GTP at 1800 258 348 and ask them to send you details of the tree lot purchase details.  I did have their latest newsletter but have now thrown it out.

Re the over-subscription:  I think this applies to the vineyards and some other project which for the moment escapes me, but I don't think the tree lots have been over subscribed.  I stand to be corrected on this.

Julia


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## TheAnalyst (4 July 2005)

*Re: Great Southern Plantations..*

Why has the price dropped? the profit forecast was 8.75% short so should fundamentally equate to a 8.75% drop in the share price...but it has dropped from a share price of say $4.20 to todays last price of $3.60...that is a 15% drop which means according to its last profit of $365 mill it is fundamentally below value now....but the market has factored in the risk of future profit forecasts not being met.


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## pegacat (5 July 2005)

*Re: Great Southern Plantations..*

Hi Folks,

   can anyone explain the valuation for GTP, and why it's only a fraction of, say, timbercorp?

   GTP is currently trading on a price earnings of ~8, which in my book means that if it never grew again, it would still be undervalued - but instead it's been growing year on year at 50% or more for, well, years.  It looks like it's growth is slowing down to more the 20-50 region going ahead, but on paper it still looks like it's really undervalued (plug the earnings numbers and a conservative '20%' growth forcast into a calculator (e.g. http://www.smartmoney.com/pricecheck/index.cfm) and you get a share price  over $10.  Alternatively, if you valued it the same as timbercorp, you get ~ $6, or against wilmott's you'd get ~$5+...

   so what am I missing? Is there some big unknown in GTP's future that doesn't apply to the others, or is this a big buying op?

   I read the fin article on timber recently, but while they talk about growth slowing, they don't seem to aknowledge the quantities of cash these folks are churning out... any thoughts?

P.S. I should say I've got shares in this critter already; wondering about laying more in...


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## TheAnalyst (5 July 2005)

*Re: Great Southern Plantations..*

I agree it does seem undervalued in regards to its sector but thats the market at the end of the day it is the big players (Investment banks, Brokerage houses and ratings agencies) that determine where a stock will sit.

In accounting there is a subject run by TAFE called "Advanced Business Performance Evaluation" and it teaches that it doesnt matter what a stock returns if the big money of the market decides that there is a risk or that a similar stock that is not returning the same as another stock but will still give it a higher valuation and therefore it will be at a greater price and will be revealed in it having a higher P/E ratio even though it earns less.

This is called BETA value and every stock has a beta value that is comparable to its sector avarage and it is then compared to the "Risk Free Market Rate" which is the the Reserve Bank of Australias cash interest rate.

In the market you will find their are many examples of this e.g. national Australia Bank, Bluescope Steel, Namio Cotton and property trusts.

The Beta value is a complicated calculation and it really requires a spread sheet to do it but you can always get an idea of a beta value just by a stocks P/E ratio even though you dont know its Beta.

In todays Finacial Review, pg 20; GTP has been given an net profit earning down grade by Macquarie as punishment for being $35 million short of its sales target, which according to macquarie equates to a 15% decrease in net profit so therefore the 15% decrease probally would have started at $4.50 ( the last recent share price high) being $0.65 cents being chopped off the share price so it should settle at $3.86 ( roughly) but remember it is common for the same institution or another comparable institution to say it is wrong it will meet the target a month later and the share price will increase afterwards again.

Take note of Multiplex recently and Just Jean, Evans and Tate and many other examples if you sold in the Institution Downgrade scare you will have big losses.



These are my opinions they are not to be relied upon seek an advertised financial experts advice


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## ghotib (5 July 2005)

*Re: Great Southern Plantations..*



			
				TheAnalyst said:
			
		

> I agree it does seem undervalued in regards to its sector ...



According to ComSec, GTP's sector is Diversified Financials, not Materials. I'm very vague about how companies are classified into sectors - I think it's a continual process based on their sources of revenue - and I don't know if a temporary misclassification is possible or what effects it might have. 

I hold Timbercorp, which is classified as Materials but which derives an increasing proportion of its revenues from other agricultural activities. Although TIM and GTP use similar methods to raise finance, their business models are very different. IMO similarities in their performance from year to year would be  coincidental. 

Cheers,

Ghoti


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## TheAnalyst (5 July 2005)

*Re: Great Southern Plantations..*

Thats even better for the stock as it is diversified so if one section of the company is increasing sales this can offset losses on other sections.

Would you give me a basic run down on what its markets are and what each business segment and geographical segment inputs to revenues of the stock.

I to now hold GTP


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## Julia (5 July 2005)

*Re: Great Southern Plantations..*

Ghotib

Is the rest of the sector down as much as GTP?  Every year I have found GTP drops at the start of the new financial year, when the last buyers  for the tree lots have done their buying for the tax advantages.

I sometimes feel there is a continuing nervousness  about the government possibly changing the rules again on the tax deductibility of Agribusiness companies and that that nervousness is magnified when something like a profit shortfall occurs.  Does anyone else have any thoughts  on this possible psychological barrier to the SP moving up somewhere near what it should be?

Julia


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## GreatPig (5 July 2005)

*Re: Great Southern Plantations..*

Julia,

Where do you think it "should" be?

It's currently $3.66, yet just over 2 years ago was around 65 cents.

Let me see... the share market allegedly averages around 10% a year, so that means it "should" be around 80 cents now 

Of course that's ignoring the fact that a couple of years before that again it was around the price it is now... 

Cheers,
GP


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## Julia (5 July 2005)

*Re: Great Southern Plantations..*

Hi Great Pig

Well, not that long ago it went to over $5.00.  Why do you think that happened?

We all seem to be making guesses with this stock because the SP does jump about at levels out of proportion to any announcements.
If you have any predictions or helpful suggestions I'm sure all of us holding GTP would be very pleased to hear them.

Cheers
Julia


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## GreatPig (5 July 2005)

*Re: Great Southern Plantations..*



			
				Julia said:
			
		

> not that long ago it went to over $5.00. Why do you think that happened?



No idea. As I mentioned earlier, I'm only a technical trader and don't know what the company's up to. I'm only interested in _where_ the price is going, not _why_.




> If you have any predictions or helpful suggestions I'm sure all of us holding GTP would be very pleased to hear them.



No predictions, but I would note that GTP has fallen from nearly $5 right down to about 50 cents before, not that long ago, and it has now made a lower high than the peak back in February. The 180 day EMA is starting to turn down. If I was investing in this stock, not knowing anything about the company itself, I would be wondering about now if it's already been as good as it's going to get for a while.

Of course this is pure contemplation on my part and should not be construed as any sort of advice.

Cheers,
GP


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## ghotib (5 July 2005)

*Re: Great Southern Plantations..*



			
				TheAnalyst said:
			
		

> Thats even better for the stock as it is diversified so if one section of the company is increasing sales this can offset losses on other sections.
> 
> Would you give me a basic run down on what its markets are and what each business segment and geographical segment inputs to revenues of the stock.
> 
> I to now hold GTP



Was this directed to me? It sounds as though you're asking about GTP, which I don't follow, so I can't answer. Sorry.

Ghoti


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## ghotib (6 July 2005)

*Re: Great Southern Plantations..*



			
				Julia said:
			
		

> Ghotib
> 
> Is the rest of the sector down as much as GTP?  Every year I have found GTP drops at the start of the new financial year, when the last buyers  for the tree lots have done their buying for the tax advantages.
> 
> ...



Hi Julia,

Sectors just confuse me; I'm inclined to think they only exist in order to provide more derivatives for trading. I used to take performance against sector into account when I was looking at companies, but I gave up on that when I realised that companies I thought were similar were in different sectors. 

I can't comment on what people might be thinking about the potential of GTP either - I'm very empty of information tonight. TIM jumped at the last announcement about the tax deductibility rules, even though the company itself said that it would have very little effect on the business. If people are seeing the source of profits for these companies as depending on their capacity to raise funds, then I guess the tax implications would be significant in their valuations. I don't know how you could test that though?

My impression is that you bought GTP for the long term in the expectation of continuing capital growth and possibly dividends. Is that right? Do you still think that the business (as distinct from the share price) is on the right track? If so, do you need to worry about the share price?

Cheers,

Ghoti


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## pegacat (13 July 2005)

*Re: Great Southern Plantations..*

Great Discussion Folks - thanks for some ideas.

So to summarise; 

positives for GTP:
* excellent cash flow
* possible upside after this year's forestry review (might allow secondary markets for trading forestry investment products)
* high (but slowing) growth of ~ 50% pa

negatives for GTP
* moving into higher risk activities
* missed growth target (achieving ~50% growth instead of ~60%)
* concern by some analysts about long term paper prices

All very interesting; my personal view is that it's still a good long term investment, because the financials seem so healthy that the company could absorb a lot of bad news from future problems and still be very nice.  I think their growth will slow in years to come, but at an estimated P/E of ~6 at the current price, it looks pretty good to me .  

It'll be interesting to see what their annual report says mid-August!

  cheers,

     Pegacat


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## Julia (13 July 2005)

*Re: Great Southern Plantations..*

Ghoti

Thanks for your response.  Your questions served as a good reminder to me at a time when I tend to get anxious about significant drop in SP which cannot really be justified by current announcements.  Yes, I still feel OK about the company in the long term, andPegacat, this is reinforced by your comments (thank you), so no, I shall desist from feeling concerned about the SP jumping about in the short term.

Incidentally, Ghoti,    your sign-off about life without music being a mistake is so, so right.  Music can save our sanity at times.

Cheers
Julia


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## Julia (18 July 2005)

*Re: Great Southern Plantations..*

For any members following GTP, there is a transcript of an interview of 15.7.05 with John Young on the ASX website today.


Julia


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## Battman64 (18 July 2005)

*Re: Great Southern Plantations..*

Thanks Julia,
This one is looking good to me.
Not easy finding good stocks at present.

I am not happy with other stocks mentioned today
ie BSL GUD SMM PDN LVL
Short term anyway.
I have been wrong many times .


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## Julia (27 July 2005)

*Re: Great Southern Plantations..*

Are there any technical people who could comment on this stock.  The SP is continuing to drop despite a generally rising market.  I don't know of any particular reasons why it should be doing so.

Would appreciate any informed comments from anyone.

With thanks.

Julia


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## mit (27 July 2005)

*Re: Great Southern Plantations..*

Julia,

TA can't tell you why a stock is going down, just a probability of where it is going next. The stock has been going down at high volume which is a bad sign. It is currently at a support of just over $3. If I was still holding the stock, I would definitely sell if it broke below $3 as it could then fall very fast. 

Where I would consider buying -

1. If the support held with volume (with a very tight stop)
2. If the gap around the end of June filled
3. Broke $4.40

Note: These are my opinions and probably not worth the bytes they are written on. I have not licenses etc etc.

MIT.


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## TheAnalyst (28 July 2005)

*Re: Great Southern Plantations..*

I have been looking at the stock and have been wondering myself....i noted that the net profit for this year is 119.6 million which is down on the forecast and Mcquarie bank has down graded next financial years net profit to 151.0 million but even at these figures and compares to other companies earning and P/E ratios the stock is under valued....so what is the problem...well firstly i looked at how many ordinary shares are on issue and realised that the market which means the big players who make up the majority of share ownership (Banks, Funds and other corporates) rated the P/E for the stock maily between 6 and 8 %.

Then I realised if this is the case then the stock on the 119.6 million net profit would be valued at roughly $2.80 and as i have noticed that slowly and cunningly the stock has been off loaded as the major players get the best price for the stock without causing a fast collapse by the volume of sales.

Then on the Mcquarie banks forecast of a net profit of 151.0 million that means with the P/E ratio of between 6-8% the most it can go to is $3.60.

So i reckon and this is my opinion it will go below $3 and then collapse. Eventually if the market decides it should earn a higher P/E ratio then that will help lift its price.

Warning: do not rely one my opinions go elsewhere


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## Rafa (28 July 2005)

*Re: Great Southern Plantations..*

That is a good analysis...

I completely sold out at 3:60... after the second big drop in a few months! Been looking to get in again, but based on this, plus the fact that it just keeps dropping, I might wait.


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## farmboy (28 July 2005)

*Re: Great Southern Plantations..*

I have been in GTP for over 2 years but finally bailed out recently at $3.59 after selling down over the previous 3 months or so. The biggest worries for me were their move away from  trees into boutique vineyards, olives and cattle. Even so I would not hesitate to get back in under the right circumstances. Agree with the opinion that it is currently overvalued.


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## TheAnalyst (28 July 2005)

*Re: Great Southern Plantations..*

The fact that they are diversifying into other areas is'nt the real problem for as i think that this is a great idea...becuase each micro sector of the the entire economy has individual economic or business cycles.

Diversifying actually helps reduce decreasing revenue risks as well as providing investors diversification with their investment choices which is a major rule for investors who dont handle their own investments.

My concern is market timing...when is the best time and the best point of value to get into a stock and GTP is a difficult one and being outside the top one hundred makes it a small cap and therefore increases its volitility which can be a bonus if you can pick market bottoms.

You find that most top stocks have P/E 's between 13 and 18 at the moment and if GTP was the same it would be almost double the price but due to extra risk placed upon it it usually trades with a P/E of 6-8 % so with the net profit being lowered thats where its most likely has to go.

But the analysts may well get it wrong  and it will continue on somewhere down the track.


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## guycharles (28 July 2005)

*Re: Great Southern Plantations..*

This stock will continue to trend down. It will not recover for a year or two.


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## Julia (28 July 2005)

*Re: Great Southern Plantations..*

Guycharles

Could you explain on what basis you make this prediction.

Julia

PS  Commonwealth Bank were buying the stock today.


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## TheAnalyst (28 July 2005)

*Re: Great Southern Plantations..*

how do you know that Commonwealth bank were buying the stock as i didnt see any public announcements.


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## Julia (29 July 2005)

*Re: Great Southern Plantations..*

Hello Analyst,

Broker told me this yesterday afternoon.

Julia


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## TheAnalyst (29 July 2005)

*Re: Great Southern Plantations..*

Looks like less selling volume today...obviously the brokers knew that if they pushed it to hard and it dropped below $3 to fast they wouldnt be able to get the best price for the stock they were selling.

So they took it easy today as Friday is sensitive to selling pressure and made buyers believe it was going to sit on its support of $3 but once it goes below that that will be it...to $2.80 roughly


My opinion only so the advice will have to come from a licensed professional.


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## BXP (29 July 2005)

*Re: Great Southern Plantations..*

$2.53


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## TheAnalyst (30 July 2005)

*Re: Great Southern Plantations..*

Hi BXP

Would you mind explaining why you believe $2.53?


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## TheAnalyst (2 August 2005)

*Re: Great Southern Plantations..*

Hi again BXP

Are you gonna say why you believe what you believe? or are you just shooting your mouth off?


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## TheAnalyst (18 August 2005)

*Re: Great Southern Plantations..*

Interested in anyone's views since GTP has broken the $3 support.


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## raider (18 August 2005)

*Re: Great Southern Plantations (GTP)*

Will drop to $2.53


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## TheAnalyst (18 August 2005)

*Re: Great Southern Plantations (GTP)*

Let me guess you and BXG have managed too save a couple of thousand dollars between yourselves since you done all your dough after you began in the market during the dot.com boom so yoy are gonna try and have another guess again.


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## Rafa (19 August 2005)

*Re: Great Southern Plantations (GTP)*

Wow... it actually has broken the support!
Great call there...


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## TheAnalyst (19 August 2005)

*Re: Great Southern Plantations (GTP)*

I find it very difficult to believe that the stock will go to $2.53 unless there is some very extra-ordinary news, $2.80 yes and maybe a little below that...thats why i ask  of the respondants(BXP & the last person) to justify their calls. It just doesnt make sense because i roughly think that would give it a P/E of 3-4.

There has been no substantial shareholding changes so far unless the usual institutional investors are not willing to pay the higher prices for them and the drop to below $3 extends the down trend in the stock according to the charts and so far the biggest down trend sign in the stocks history breaking 3 supports.

But i still say there has been one of the smartest and cunning stock plays that i have seen of late barr the Evans & Tate (ETW) which ways heavily to evidence of insider trading in MY VIEW.

Dont forget things change very fast in a matter of months as well.


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## Aussiejeff (20 August 2005)

*Re: Great Southern Plantations (GTP)*

I believe there is some concern looking forward for wine producers in Australia (eg flat outlook). Maybe the demand for grapes won't be as astronomical as in the previous few years and perhaps GTP's future returns on their new grape ventures don't look so promising in light of that concern?

It concerned me enough when they first announced they were "diversifying" into that particular field to dump my holdings when they were $4.85/share. I feel pretty good about that decision ATM. I would actually be very surprised if they regained their former "glory" days status. But of course, that is purely my opinion. 

Cheers,

AJ


----------



## Julia (20 August 2005)

*Re: Great Southern Plantations (GTP)*

Hi AussieJeff

I had the same concern you have expressed with respect to the current grape glut and a couple of months ago spoke to the company about this.  Their response was it will take some years for their plantings to reach harvest stage and their research had indicated there would at that stage be a demand again.  

I know absolutely nothing about grapevines and hope they are correct in their expectations.


Julia


----------



## TheAnalyst (26 August 2005)

*Re: Great Southern Plantations (GTP)*

Any one got opinions or feelings on the stock at the moment and does any one know when it announces its profit?


----------



## The Once-ler (26 August 2005)

*Re: Great Southern Plantations (GTP)*

They certainly appear to be good value.

But, the entry into grapes in my opionion showed investors that this company is really about tax avoidence rather than Agribusiness. Everyone knows about the glut of grapes. If GTP were a serious business they would have stuck to plantations.

John Young selling off certainly didn't help investor confidence either.

Good Luck.


----------



## Julia (26 August 2005)

*Re: Great Southern Plantations (GTP)*

The Analyst

Report yesterday on the ASX website (probably also on Great Southern's website) which was not picked up by the news media.

Once-ler

I had the same discomfort when I read about the company's divergence into grapes and about three months ago asked them about this.  Their response was that, yes there is a grape glut at present, and yes a lot of the current producers are moving out of grapes, and that their research indicated that when their now new plantings are ready for harvest, there will once again be a demand for grapes.  Let's hope they've got it right.

Julia


----------



## TheAnalyst (26 August 2005)

*Re: Great Southern Plantations (GTP)*

Hi Julia

I quickly had a read of those two reports and the news is positive and not so positive:

Positive because it wasnt able to take into account the revenue earned of $118 mill and it had to be deferred into the next year and not positive because if it really was it still should be in this years profit as well as the net profit being down on its previouse forecast, therefore this needs critism and caution to be applied.

The next thing is the company has no right to brag about its strong cash position on its balance sheet because had they paid a decent dividend it wouldnt have such a strong cash position it would be having to raise more equity.

Also its profit performance at present is relying on income from raising money for plantations it technically is not raising real internally generated income from its harvest of plantations and it must aggressively raise money for plantations to have a balance sheet; this answers the question why they are in the financials index and not materials like timbercorp.


----------



## TheAnalyst (29 August 2005)

*Re: Great Southern Plantations (GTP)*

Is this stock in quick sand? it just wont stop sinking


----------



## TheAnalyst (29 August 2005)

*Re: Great Southern Plantations (GTP)*

This stock is going down faster than what i expected? does that mean its performing above expectations?


----------



## Julia (29 August 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> This stock is going down faster than what i expected? does that mean its performing above expectations?



The Analyst,

Perhaps I'm being exceptionally obtuse but I really don't know what you mean in this post.  Can you express whatever you are feeling differently?

I had a discussion re GTP today with a financial adviser whom I respect and who has given me very good advice in the past.    After evaluating the report and interview with John Young of the 25 August, the opinion was that a lot of ill informed comment appears to be being posted on the forums (  I had offered copies of most of the postings), that the stock had been oversold, and best plan was to ride it out.

Has anyone spoken with the company in the last week or so to get an idea of their reaction to the slipping of the SP?

Julia


----------



## GreatPig (29 August 2005)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> that the stock had been oversold, and best plan was to ride it out



I don't know anything about the fundamentals, but the share price has nearly halved in about 7 months. That's some "ride" already.

What makes your advisor believe it's oversold? Despite what it might say in the company reports, which are always painted as rosy as possible, how much does he know about the business GTP is in and how to value it? And does it really matter? It's what the market as a whole believes that determines the share price.

While of course anything _could_ happen, I'd suggest you look at the share price between March 2000 and July 2001 to see one example of what has happened before. I have no idea of the fundamentals then either, but are you prepared to risk the same thing happening again?

Which is not saying that I think you should necessarily sell now, but personally I think you need to draw the line somewhere, and it's really your line to draw, since it's your money. As the saying goes, winners hold winners, losers hold losers.

And most importantly, in my opinion, the best strategy is to have one. And to take responsibility for your own decisions. Then there's no such thing as a bum steer.

GP


----------



## BXP (30 August 2005)

*Re: Great Southern Plantations (GTP)*

Not far now. $2.53 and I will be looking for some confirmation to buy.


----------



## Julia (30 August 2005)

*Re: Great Southern Plantations (GTP)*

Great Pig

Thank you for your advice.

If you then follow the SP through to February/March this year, you will see it went to $5.03.

Why don't you have any interest in the fundamentals of a company?  Seems to me you are only looking at half the picture if you go by only TA.

Julia


----------



## GreatPig (30 August 2005)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> If you then follow the SP through to February/March this year, you will see it went to $5.03.



Yes, but things change. Just because it was at $5 once doesn't necessarily mean that's its true value and anything lower is undervalued. You could equally argue that it was at 50 cents once, and thus everything higher is overvalued.

So how do you determine the true value of a company? With a lot of difficulty, in my opinion. Even people doing due diligence before a possible (friendly) takeover sometimes get it wrong, and they have access to all the books. How do you value components like potential revenue growth, management ability, outside economic influences, key personnel, etc?




> Why don't you have any interest in the fundamentals of a company?



Well it's not so much that I don't have any interest, but more that I don't have enough time to be interested. Most of my trading is relatively short term, where I don't think fundamentals make much difference (except for obvious things like dividends, profit warnings, and takeover announcements).

For my longer-term investments I am more interested, but due to a lack of time mainly limit myself to just going by technical trend lines and whatever information I happen to pick up from the newspapers and Fin Review, which I browse through occasionally (we get it daily at work).

In the end I'm just after a reasonable return, and don't want to spend 24/7 trying to make it  Being an engineer, I'm more atuned to charting than fundamental analysis, and while it does a good enough job for me, I'll mainly limit myself to that. Even that takes up more than enough of my time right now...

Cheers,
GP


----------



## raider (30 August 2005)

*Re: Great Southern Plantations (GTP)*

Only a slight recovery today but then back down to $2.53


----------



## TheAnalyst (30 August 2005)

*Re: Great Southern Plantations (GTP)*

I am starting to think maybe $1.53


----------



## Julia (31 August 2005)

*Re: Great Southern Plantations (GTP)*

Great Pig



> In the end I'm after a reasonable return and don't want to spend 24/7 trying to make it




Me too.  In your earlier post you suggested I should take responsibility for my decisions (or something to that effect).  Well, of course.  But that doesn't mean I won't seek informed input from sources I respect before making decisions.  I frankly would much rather be doing other things than reading the fine print of company reports, so, once I feel I've put in enough time assuring myself a company is basically well managed, I simply don't feel inclined to jump in and out every second day or week as the SP varies.  I'm quite happy to hold most of my stocks for several years.  With a few exceptions they all pay good dividends with 100% franking and, as long as I can easily live off the *income* then I can withstand variations in the SP.

I guess we all have individual attitudes to trading/investing.  I'm basically a buy and hold investor, and as long as the bottom line grows by a healthy amount each year and I have sufficient income I simply don't feel the need to extract every last dollar out of every day.

All the best
Julia


----------



## GreatPig (1 September 2005)

*Re: Great Southern Plantations (GTP)*

Julia,



			
				Julia said:
			
		

> I simply don't feel inclined to jump in and out every second day or week as the SP varies



I think that's fine, if that's all you're interested in doing. I'm building up an investment portfolio as well, but am also doing shorter-term trading for a couple of reasons: one, because I find it interesting, and two, because I believe (or at least am hoping) that I will be able to get a better return that way, and more particularly, have a higher income stream. Part of my plan to retire early! 

Of course the investment portfolio requires a lot less attention, but I'm hoping that once I get my trading system down pat and proven, it won't require all that much time to maintain either. Certainly much less than a 9-5 job.




> as long as I can easily live off the income then I can withstand variations in the SP



I think you need a fairly large amount of invested capital to be able to live comfortably off just the dividends. If you say dividend returns average 5% pa (as a rough, round figure), then $1m invested would give you $50K pa income before tax (although if it's mostly fully-franked, then you'd probably get a refund at that income level).

Which is great if you happen to have $1m, and don't mind investing it all in the share market.

Cheers,
GP


----------



## Julia (1 September 2005)

*Re: Great Southern Plantations (GTP)*

Hello again Great Pig,

I've no argument with the figures in your last paragraph.

Julia


----------



## mit (2 September 2005)

*Re: Great Southern Plantations (GTP)*

GP,

I agree 5% return on just dividends compared to a system that takes an average of 1hour a day which returns 20%+ a year would only take $250k a year to produce $50k. Or have $150k in capital and $150 on Margin would leave you enough to cover the interest and still produce $50k a year with a nice safety margin.

MIT


----------



## Bronte (2 September 2005)

*Re: Great Southern Plantations (GTP)*

*GTP* Up 18c today to $2.94
Does anybody know why?


----------



## TheAnalyst (2 September 2005)

*Re: Great Southern Plantations (GTP)*

bear trap maybe...who knows, maybe an institution decided not to sell today and has started selling now....better to get $2.94 than $2.70


----------



## Bronte (2 September 2005)

*Re: Great Southern Plantations (GTP)*

You could be right (beartrap)
Up 31c 5M Turnover
That's over 10% in one day
Now $3.07 ($3.09 High)
No news!!!


----------



## TheAnalyst (2 September 2005)

*Re: Great Southern Plantations (GTP)*

Do you think the ASX will ever query the share price movement? Do you think that ASIC will get off their ass and do a full and proper investigation into any insider trading or share price manipulation?

Do you think that lots off rumours maybe being spread from people in the GTP finance and legal compliance section to their friends and associates in other places of work like the managed funds analysis sections and other related areas?


----------



## Julia (2 September 2005)

*Re: Great Southern Plantations (GTP)*

I have no idea what has caused this SP increase.
One possibility I can think of is that the price has dropped so much that one or more brokers could have changed it from a "SELL' to a "BUY".

Julia


----------



## Julia (2 September 2005)

*Re: Great Southern Plantations (GTP)*

Just remembered:  it goes ex-dividend (10c) on 9 September.

Julia


----------



## Bronte (3 September 2005)

*Re: Great Southern Plantations (GTP)*

Player Ticker Entry price Current price Gain/Loss Change in % 
1. chicken SBM 0.180 0.205 0.025 13.89% 
2. dutchie TOX 0.058 0.065 0.007 12.07% 
3. Battman64 GTP 2.770 3.070 0.300 10.83%

Just for when Battman gets back   
He will not believe this


----------



## TheAnalyst (6 September 2005)

*Re: Great Southern Plantations (GTP)*

any one got any opinions on the stock once it goes ex dividend.


----------



## raider (6 September 2005)

*Re: Great Southern Plantations (GTP)*

$2.53 Only joking


----------



## Julia (6 September 2005)

*Re: Great Southern Plantations (GTP)*

Re stock going ex dividend:  If you assumed the 31 cent rise last Friday was due to coming dividend, then obviously you'd assume it would fall after the ex-div date.  However, I just can't see that the 10 cent dividend would suddenly come into play like that.

The Intelligent Investor are reviewing GTP in their next issue.  So far have no indication as to their recommendation.

Will post separately a question re usefulness of Intelligent Investor.

Julia


----------



## TheAnalyst (9 September 2005)

*Re: Great Southern Plantations (GTP)*

now that its gone ex div any one got any ideas about how far it may drop


----------



## TheAnalyst (14 September 2005)

*Re: Great Southern Plantations (GTP)*

Any one got any thoughts on GTP "where to from here?"


----------



## Julia (14 September 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Any one got any thoughts on GTP "where to from here?"



Wish I did.  Down 14 cents today.

"The Intelligent Investor" has today come out with a HOLD recommendation.
An email I received today from the analyst who did the report suggested falling share price represented an opportunity to buy more.

Julia


----------



## GreatPig (14 September 2005)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> "The Intelligent Investor" has today come out with a HOLD recommendation



Easy for them to say, since they're not the ones holding it 




> the analyst who did the report suggested falling share price represented an opportunity to buy more



Personally I prefer to buy when I see prices rising. During a down-trend like this particularly, I wouldn't buy more (or any in my case) until I'd seen definite signs of steady upward movement again.

And I ain't seen that yet.

Cheers,
GP


----------



## RichKid (14 September 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Any one got any thoughts on GTP "where to from here?"




Wasn't there an annct about some sort of debt issue? TREES3 or something like that? Wouldn't that reduce demand for the fpo's? Just wondering about dilutionary effects etc.


----------



## TheAnalyst (29 September 2005)

*Re: Great Southern Plantations (GTP)*

Any one have an update on GTP?


----------



## GreatPig (29 September 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Any one have an update on GTP?



Surely you mean a downdate? 

GP


----------



## TheAnalyst (29 September 2005)

*Re: Great Southern Plantations (GTP)*

yer; any idea??


----------



## Rafa (14 October 2005)

*Re: Great Southern Plantations (GTP)*

wow... anyone knows why this share is going up???

(sorry, can't seem to work out to to post a chart!)


----------



## Julia (14 October 2005)

*Re: Great Southern Plantations (GTP)*

Tech-A

Could this be one stock which fits your category on another thread of going against the trend?  Has gone up all of the last three days against the general downtrend of the market, and I've also noticed in the past when the market has been up, GTP has tended to drop.  This is certainly not a scientific observation, but I wondered if you'd like to look at some charts from your sophisticated software and comment on the above apparent trend?

Julia


----------



## Lachlan6 (17 October 2005)

*Re: Great Southern Plantations (GTP)*

I used to own GTP. bought in at 78c and watched them rise up to $5 before i offloaded some at $4.8 and the rest at $3.55. interesting stock to watch. it really has been punished, maybe unduly so if you look at the fundamentals of this company. maybe a little nervouseness around the stock. Amazing to see how well it seems fibonacci supports are working again. 50% retracement level from run up mid 2002 to early 2005 at $2.75, seems to have held albeit in the short term, with a nice bounce off this level. I think the next resistance is around $3.30. personally im glad i sold the stock, however who knows what may happen if it breaks support turned resistance at $3.30? 

Maybe double bottom occuring on daily chart, resistance at $3.17.


----------



## Rafa (17 October 2005)

*Re: Great Southern Plantations (GTP)*

looks like double bottom around the 2.60 mark... which should mean it could rise to 3.80!

hmmm, ain't an expert on tech analysis unfortunately...

HELP!!!


----------



## TheAnalyst (7 November 2005)

*Re: Great Southern Plantations..*



			
				TheAnalyst said:
			
		

> I have been looking at the stock and have been wondering myself....i noted that the net profit for this year is 119.6 million which is down on the forecast and Mcquarie bank has down graded next financial years net profit to 151.0 million but even at these figures and compares to other companies earning and P/E ratios the stock is under valued....so what is the problem...well firstly i looked at how many ordinary shares are on issue and realised that the market which means the big players who make up the majority of share ownership (Banks, Funds and other corporates) rated the P/E for the stock maily between 6 and 8 %.
> 
> Then I realised if this is the case then the stock on the 119.6 million net profit would be valued at roughly $2.80 and as i have noticed that slowly and cunningly the stock has been off loaded as the major players get the best price for the stock without causing a fast collapse by the volume of sales.
> 
> ...




I think it is now time for ME to buy some Equity Installment Warrants. I am not advising others.


----------



## TheAnalyst (8 November 2005)

*Re: Great Southern Plantations (GTP)*

Anyone done some specific research on GTP warrants, particularly installments?

Would love to hear of it.


----------



## Kauri (8 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Anyone done some specific research on GTP warrants, particularly installments?
> 
> Would love to hear of it.




   Having flipped around a few sites found this alternative P/E workout...  

  Owners earnings =depreciation+amortisation + net income +- one offs - capex.
  In 2003 this gave ratio of 8
  Currently gives 30

  Also the net increase in cash held came from the share issue, so with diluted EPS and costs of ( as yet ) non producing assets purchased this has resulted in ROE going down.

  Having said that, on the tech front it *may* be in early stages of cup/saucer.


----------



## TheAnalyst (8 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				Kauri said:
			
		

> Having flipped around a few sites found this alternative P/E workout...
> 
> Owners earnings =depreciation+amortisation + net income +- one offs - capex.
> In 2003 this gave ratio of 8
> ...




That doesnt seem to work out....that would give it a lower P/E not a higher one of 30 as its current P/E is around 7.5 and if you add back the dep'n & amort expenses that would surly increase its net profit and amortisation doesnt come into the equation as amortisation of non-tangible assets is non-tax deductable.


----------



## Kauri (8 November 2005)

*Re: Great Southern Plantations (GTP)*

TheAnalyst...
                 OK.. fundamentals aren't one of my strong points  I might be confusing myself here.  
                 What I am trying to figure out is what were their basic earnings. I note they raised $140 million through a share issue and $40 million through proceeds of TREES, ( this increased their share base by approx 65% ).Against this they bought Sylvetech and Environwest. Med term both good but short term I dont think they contribute much to the bottom line. So instead of 225 million shares they now have 400 million shares, against this assets have increased but ROA/ROE isn't? Is any of the cash left over from the above raisings minus the asset purchases show up in the books and if so does it affect some of the fundamental ratios? Basically, how did the business perform stripped of the raisings and purchases and how will it perform in the immediate future? .......Now I've given myself a headache. :hammer:


----------



## TheAnalyst (8 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				Kauri said:
			
		

> TheAnalyst...
> OK.. fundamentals aren't one of my strong points  I might be confusing myself here.
> What I am trying to figure out is what were their basic earnings. I note they raised $140 million through a share issue and $40 million through proceeds of TREES, ( this increased their share base by approx 65% ).Against this they bought Sylvetech and Environwest. Med term both good but short term I dont think they contribute much to the bottom line. So instead of 225 million shares they now have 400 million shares, against this assets have increased but ROA/ROE isn't? Is any of the cash left over from the above raisings minus the asset purchases show up in the books and if so does it affect some of the fundamental ratios? Basically, how did the business perform stripped of the raisings and purchases and how will it perform in the immediate future? .......Now I've given myself a headache. :hammer:




Hi Kauri

The raising of equity would not be taken into account when considering profit as capital raising gets added to equity(share capital) in the companay consolidated balance sheet to the value of the shares raised and the the amount of actual cash raised and the assets that are purchased will become debit enteries in the consolidated balance sheet as a non-current assets.

To work out the P/E just go to the statement of consolidated performance and take the net profit and divide it by the shares on issue and that will be the P/E ratio or you can also take into account the number of directors options that will eventually be converted to shares and include this number as well which will give you the diluted P/E ratio.

In regards to the depreciation as it is not actually cash lost you can add the dep'n expenses back to the net profits but you must also take into account the tax reduction(30%) the company has also recieved off the tax payable.

Capital expenditure really gets taken into account when it has been borrowed or spent from cash reserves, then it can be added back as capital expenditure; equity raisings is a little different and one off losses if it has had any and then they actually have to be material meaning it should be mentioned as it will effect users of financial statements desicion on either to buy, hold or sell in a company to be put into the notes of the company accounts. I dont know of any abnormal losses this year from GTP or write downs just profit didnt meet the full expectations.


----------



## Kauri (8 November 2005)

*Re: Great Southern Plantations (GTP)*

Thanks Analyst... i will try to dijest this tonight.....a change from looking at charts.


----------



## abucs (11 November 2005)

*Re: Great Southern Plantations (GTP)*

Hi guys,

have enjoyed the discussion on GTP and hope to continue to hear all the views.

I have owned GTP for 4 or 5 years now and have been continually increasing the stake.

I'm still quite bullish but things i think that impact the shareprice negatively are :

1.  Low return from GTP's first harvest.
2.  Low dividend payout.
3.  Capital raisings.
4.  Lack of surety on future government legislation (deductions and tax rates)
5.  Lack on surety that the business will contine to sell it's schemes.

To address these issues respectively.

1.  (Low return from 1994 scheme) GTP says that they have learned a lot from the first scheme and future returns (quality and quantity of wood) should increase.  This concern though is fair enough.  The only other thing i would say is that the entry price for each woodlot ($3300) has remained fairly stable over the last few years while the price of woodchip continues to increase.  So the returns for subsequant investors in the woodlots (subsequant to 1994) should be guaranteed to increase.  And this increase on return should continue each year.

2.  (Low dividend payout)   ha !  growth verse 'money in the pocket'.  GTP continue to invest for the future and they expect sales to continue to increase and thus keep buying more land.  It's good that the company is so bullish on the future but this continual re-investment hides just how well the company is going and lowers the EPS.  If you look at the continued amount of land that GTP is obtaining you see that the profits they are not paying out in dividends, together with large amounts of cashflow are being used to buy land.  Of course GTP could stop buying the enormous amount of land and make more profits and pay higher dividends.  The question is when will they decide they have enough land ?  For example buying 35,000 hectares of land each year costs well over $100 million. (30c per share).  The rotation of the land will cut CAPEX dramitically in the future.   

3.  (Capital raisings).  Ditto from above.  The buying of Sylvatech and Environest is a good example.  The extra shares issued dilute EPS straight away but the advantages are in the medium to long term.  The 100,000 hectares from the Tiwi islands will cut CAPEX over the next several years.  The cattle project that will be sold through GTP's large network will provide more and more re-curring income in future years as the cattle schemes are progessively expanded.   It also provides some diversication and targets the agribusiness investor that wants a return not in ten years but much sooner.

4.  (Lack of future Government Support).   Well this could cause problems although all of the talk has been positive to date and the government wants to support the industry as it is 'more green' (planting new trees against cutting native bush) and helps with the balance of payments (we currently import more wood products than export) and helps rural communities (more jobs and wealth).    With tax cuts (present and future) it will be interesting to see how they impact sales and this could affect the share price quite dramatically (in either direction).

5. (Continuing to sell schemes).  This of course can be affected by 1. and 4. above or by competition from other investment alternatives.  If you look though at how much plantation land GTP owns now, and what the forecast future earning of that wood will be, GTP could cease selling schemes and still be quite profitable down the track.  Of course you'd have to wait 10 years for GTP to make the wood sales in their own right but the amount for sales will be huge so that is the fundamental that underpins anything that could go wrong.  As the years progress and GTP continues to own more and more plantation land, vineyards, olive groves and cattle, their position will continue to get stronger and stronger in my opinion.

Sorry for the initial long post on this one.


----------



## Julia (11 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> Hi guys,
> 
> have enjoyed the discussion on GTP and hope to continue to hear all the views.
> 
> ...




Hello Abucs

Interesting comments.
Do you own GTP?
If so, what percentage allocation of your portfolio does it have?
If you are continuing to add to your holding, what would you consider to be maximum portfolio percentage?
(I'm interested, because I'm somewhat overweight in GTP but reluctant to sell.)

Julia
(we're not all blokes here!)


----------



## abucs (13 November 2005)

*Re: Great Southern Plantations (GTP)*

Hi Julia,

yes, i do own GTP.  I have about half my portfolio in GTP at an average entry price of $2.  I have added quite a few since it's latest fall buying from $3.78 down to $2.77.

I guess the answer for how much of the portfolio to invest in 1 stock is a personal matter.  I am not looking to buy any more but i wouldn't be selling for anywhere near these prices either.

If i could only pick one stock though, this would be it.  My own thoughts are to sell a third of the stock somewhere between $5 and $6 and to hold the rest indefinitely.

Happy investing.


----------



## TheAnalyst (13 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> Hi Julia,
> 
> yes, i do own GTP.  I have about half my portfolio in GTP at an average entry price of $2.  I have added quite a few since it's latest fall buying from $3.78 down to $2.77.
> 
> ...




If you are that keen on GTP maybe buying the Installment warrants would have been a better option as you could have used less money for more leverage to the growth in the stock.


----------



## Julia (13 November 2005)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> Hi Julia,
> 
> yes, i do own GTP.  I have about half my portfolio in GTP at an average entry price of $2.  I have added quite a few since it's latest fall buying from $3.78 down to $2.77.
> 
> ...





Hi abucs

Wow, you must have a lot of confidence in GTP.  Half your portfolio in one stock!  I've been worried about being overweight with about 15% of my portfolio in GTP, at the current price.

I bought my first lot in 2001 at  54 cents and subsequent purchases at 83c, 84c and 90c.

Is anyone else holding this stock, and if so, what price would you sell at, or do you regard at as a really long term holding, i.e. more than 5 years?

Julia


----------



## abucs (14 November 2005)

*Great Southern Plantations (GTP)*

Hi TheAnalyst.

You could be right.  I don't tend to go in much for derivative trading.

Regards,
Abucs.


----------



## abucs (23 November 2005)

*Re: Great Southern Plantations (GTP)*

Intersting words today from the Great Southern AGM.

Sales so far are well ahead of last years record and the non timber schemes haven't even started yet.

They also mentioned that the non timber schemes this year had the potential to be 30% of sales this year (from 8% last year).

Put these two comments together and it looks like another great year despite the very low PE ratio.

I'm out of the country at the moment.  Did anyone go to the AGM and have extra stuff to report ?   I'd be interested in comments made about future dividend policies, and the structure of the upcoming cattle investment product.

Regards.


----------



## abucs (16 December 2005)

*Re: Great Southern Plantations (GTP)*

Seems like some successful financial institutions are getting into GTP or extending existing holdings in the last month.  Colonial / CBA, UBS and Orion Investments .  Including Macquarie Bank who are underwriting any DRP's or capital raisings, there are some very successful investment companies putting significant amounts of money into GTP right now.


----------



## TheAnalyst (16 December 2005)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> Hi TheAnalyst.
> 
> You could be right.  I don't tend to go in much for derivative trading.
> 
> ...




I have been looking at the installment warrants but you do have to watch the institutions buying in as at the same time they are then offering the installment warrants as the can get up to 10% guaranteed return by using this method and transferring all the downside risk to the holder of the warrants..at present i am looking at macquarie hot installment warrants as they have a 90 - 80% leverage which i like.


----------



## abucs (17 December 2005)

*Great Southern Plantations (GTP)*

Hi TheAnalyst.

Do you think that trading in GTP derivatives / shares is causing an effect on the share price ?

The number of shares being bought by the institutions is quite large.  Is the derivative market large enough to cover this ?

Regards,
Sean.


----------



## TheAnalyst (18 December 2005)

*Re: Great Southern Plantations (GTP)*

THe best way to go about this and its a bit time consuming is to sum up the amount of ordinary shares that GTP has on issue and then go the ASX website and get the list of GTP warrants on issue and get the Product Disclosure Statement and in each one for each warrant issued the institution offering the warrants will state how many warrants it plans to issue add them up and that will tell you how many shares that the institutions are using for the warrants and also take into accout any ratios of more than one warrant for each share.
Also look at the institution that bought shares such as commonwealth bank and see if they ghave been issuing any new warrant issues.

When certian warrants expire that can have a downside effect on the share price as if you do not choose to take upp the warrant then the underlying shares maybe sold which will effect volume to check this scenario out just check the dates when warrants are expiring and check the volume and price of shares on a chart around about those dates.


----------



## TheAnalyst (21 December 2005)

*Re: Great Southern Plantations (GTP)*

GTP have dropped last few days...dont be scared as institutions have been buying a lot lately and have now stopped so there is a sudden drop in volume and price....beware as they wish to accumulate shares at lower prices and continue buying.

Hopefully the price will be manipulated a bit lower so i can come in and buy more warrants...thx institutions for helping me...

Any one kept a tab on the P/E ratio at this price as the newspapers can be a bit behind sometimes


----------



## Julia (21 December 2005)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> GTP have dropped last few days...dont be scared as institutions have been buying a lot lately and have now stopped so there is a sudden drop in volume and price....beware as they wish to accumulate shares at lower prices and continue buying.
> 
> Hopefully the price will be manipulated a bit lower so i can come in and buy more warrants...thx institutions for helping me...
> 
> Any one kept a tab on the P/E ratio at this price as the newspapers can be a bit behind sometimes




Hi Analyst,

On another site the suggestion has been made that the drop off in the SP has been due to a particular seller who has been coming in and selling off fairly large parcels late in the afternoon, suggesting possiblyan overseas investor.  

If institutions are buying, why would the SP be dropping?

Julia


----------



## michael_selway (21 December 2005)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> Hi Analyst,
> 
> On another site the suggestion has been made that the drop off in the SP has been due to a particular seller who has been coming in and selling off fairly large parcels late in the afternoon, suggesting possiblyan overseas investor.
> 
> ...




maybe they try yo buy at limit lower than market price, and not in rush to buy if it goes higher than that price?

also PE seems very low forecasts seems pretty good as well, wonder if this one will rebound, yield is ok atm


----------



## TheAnalyst (3 January 2006)

*Re: Great Southern Plantations (GTP)*

Looks like great southern is in for a recovery by the looks of it...the 31st dec announcment was a strong and good indication to the market that it is on its way to increased earnings and increased shareprice.

I have been accumulating gtpizk installment warrants.


----------



## michael_selway (3 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Looks like great southern is in for a recovery by the looks of it...the 31st dec announcment was a strong and good indication to the market that it is on its way to increased earnings and increased shareprice.
> 
> I have been accumulating gtpizk installment warrants.




Wow nice up 10% today! yeah it has dropped alot this year, btu forecasts appear to be still good atm

------------------------------

Great Southern Plantations (ASX code: GTP) is pleased to announce that sales of its Managed Investment Scheme projects for the half year ended 31 December 2005 have totalled some $79.3 million. This compares to sales at the same time last year of $20.5 million and therefore the current sales represent an increase of approximately 287% over the same period last year.


----------



## TheAnalyst (3 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				michael_selway said:
			
		

> Wow nice up 10% today! yeah it has dropped alot this year, btu forecasts appear to be still good atm
> 
> ------------------------------
> 
> Great Southern Plantations (ASX code: GTP) is pleased to announce that sales of its Managed Investment Scheme projects for the half year ended 31 December 2005 have totalled some $79.3 million. This compares to sales at the same time last year of $20.5 million and therefore the current sales represent an increase of approximately 287% over the same period last year.




that is amazing news....fundamentally it should begin to push the stock over $4 and if the next half or qtr the same type of announcement is made it should cause the stock to break any previous high....the only risk that is calcualted into the stock at present is if it can continue its growth and the directors are addressing this issue already by diversifying.


----------



## abucs (3 January 2006)

*Re: Great Southern Plantations (GTP)*

I'd like to see the new investments sell well (olives, grapes and cattle) as these will provide re-curring income to the company in future years and help to allay any fears that the industry may suffer a downturn.

Still, looks like this year will be another strong year and the PE's look very attractive.


----------



## TheAnalyst (3 January 2006)

*Re: Great Southern Plantations (GTP)*

I think at the moment with the sales going extremly well they will most likely use the extra earnings towards strengthening their growth position and this could mean being involved in differnt types of investments even leading back to property in some yrs down the track.

They dont pay out all their earnings as dividends but keep a dividend payout ratio..especially now that they have some big name institutions as major shareholders these will influence some of their decisions and big players have a big say on the corporate governance issues like protecting and maintaining a solid share price as well as creating strategic alliances in cross products and benefits.


----------



## abucs (3 January 2006)

*Re: Great Southern Plantations (GTP)*

Hi The Analyst.
Just quickly.   Yes, i agree with the possible use of financial instos using their distribution networks to help sell the GTP investments.  John young keeps saying that the distribution network is a big part in the continual increase in sales.  Against that though is the fact that last year both CBA and Maquarie entered the industry themselves as they were seeing how much money was being made.  GTP is still 35% of the market though.

I'd like to see GTP concentrate on the non wood plantation investments for the reason mentioned above but also to see them gradually use the plantation land themselves to have the woodsales in their own name.   I'm assuming that this will be their plan if the non timber products sell well.  If you do the maths on how much their current land bank is worth, it is a huge number.  Say 250K hectares making $30K each hectare over an ongoing 10-11 year period.

Also, perhaps the move to use some gearing on the company rather than using capital raisings has something to do with the 'big boys' suggestions on share price stability that you mentioned ?


----------



## TheAnalyst (3 January 2006)

*Re: Great Southern Plantations (GTP)*

yer, you are right with the gearing abucs..because it is common knowledge that borrowing or choosing to raise debt rather than equity causes a share price to grow quickly when the overall market index it is in is growing and is expected to grow as well so this is a positive for gtp...but it also has the reverse effect when the entire index is falling and growth is not expected.

Another bonus is gtp charges the lease of the land to the investor in one hit over a ten year period and what is not shown in the balance sheet is the land revalued in ten yrs when the wood or whatever crop is harvested and sold on behalf of the investor and the land remains the property of gtp is the increases in the land value and how they can be released again or the land sold off for a capital gain not normal earnings...i am ok on this point because i do tax from home so i understand the concept that gtp has marketed.

But macquarie entering the market is an eye catcher but the board must have something up their sleave as so far they have been proved to be just as smart as those boffins from macquarie and they are smart.


----------



## michael_selway (5 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				GreatPig said:
			
		

> Easy for them to say, since they're not the ones holding it
> 
> Personally I prefer to buy when I see prices rising. During a down-trend like this particularly, I wouldn't buy more (or any in my case) until I'd seen definite signs of steady upward movement again.
> 
> ...




Yeah i agree with that it can be very risky buying too early when its falling, in Jun05 it made a small rocovery but then dropped even more. I guess one should also wait for some good news first, like the most recent annoucement


----------



## TheAnalyst (6 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				michael_selway said:
			
		

> Yeah i agree with that it can be very risky buying too early when its falling, in Jun05 it made a small rocovery but then dropped even more. I guess one should also wait for some good news first




I must admit it has been a tough one....


----------



## Julia (6 January 2006)

*Re: Great Southern Plantations (GTP)*

Sold 20% of my holding on the price rise two days ago.  The wait for a recovery is getting a bit long for me.  The funds could be otherwise employed in a stock which is growing now.

Julia


----------



## TheAnalyst (6 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> Sold 20% of my holding on the price rise two days ago.  The wait for a recovery is getting a bit long for me.  The funds could be otherwise employed in a stock which is growing now.
> 
> Julia




Yer, i see your point with this Julia...i found the same problem months ago and was frustrated that capital could go elsewhere...but the problem was the stock has slowly been making a come back and at times has shot up quite fast...what i decided to do to sought this issue out was i gotout of ordinary shares and into the gtp installment warrants and i am quite happy now.

But this is not advice it was a strategy that i liked...make your own desicion


----------



## abucs (6 January 2006)

*Great Southern Plantations (GTP)*

TheAnalyst,  how do your hot warrants work ?  Is there any incentive for the institution to keep the price down as they expire, or would they prefer a higher price ?  I noticed that the share price dipped a couple of weeks ago when the warrants expired just before the latest rise.  Can i ask what are your plans with the warrants you are invested in and what you are expecting / hoping for at expiry ?

Julia,  you mentioned another site talking about GTP.  Could you say which site that is ?  I trust you are happy with your portfolio balance now after selling down GTP ?  Hope you find something else on the way up.


----------



## TheAnalyst (6 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> TheAnalyst,  how do your hot warrants work ?  Is there any incentive for the institution to keep the price down as they expire, or would they prefer a higher price ?  I noticed that the share price dipped a couple of weeks ago when the warrants expired just before the latest rise.  Can i ask what are your plans with the warrants you are invested in and what you are expecting / hoping for at expiry ?
> 
> Julia,  you mentioned another site talking about GTP.  Could you say which site that is ?  I trust you are happy with your portfolio balance now after selling down GTP ?  Hope you find something else on the way up.




Hi Abucs

The hot warrants you are talking about were issued by macquarie and have reconstructs on them i have gtpizk http://www.asx.com.au/asx/markets/WarrantPricesSearchResults.jsp?State=127&DataSet=GTP

I like these ones as the are installments and have a reset meaning that i dont have to take them up at expiry i can just roll them over.

The institutions make their money by charging an up front interest fee and administration cost which is worked into the installment price over the portion that has not been paid for. There are people who's risk profile does not allow them to be exposed to shares but like a guaranteed return so what happens is macquarie or some other institution takes their money buys shares and issues the warrants and therefore guarantees a 6 - 6 1/2 % return to those investors and transfers the risk of the share price over to the purchaser of the shares and makes a nice profit out of the margin and fees. This is just one of the main reasons for installments and what the institutions get for the issue.


----------



## TheAnalyst (6 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> TheAnalyst,  how do your hot warrants work ?  Is there any incentive for the institution to keep the price down as they expire, or would they prefer a higher price ?  I noticed that the share price dipped a couple of weeks ago when the warrants expired just before the latest rise.  Can i ask what are your plans with the warrants you are invested in and what you are expecting / hoping for at expiry ?
> 
> Julia,  you mentioned another site talking about GTP.  Could you say which site that is ?  I trust you are happy with your portfolio balance now after selling down GTP ?  Hope you find something else on the way up.




sorry i have been brief but later on tonite just ask whatever and i will have a bit more time to answer you...always happy to help


----------



## Julia (6 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				abucs said:
			
		

> TheAnalyst,  how do your hot warrants work ?  Is there any incentive for the institution to keep the price down as they expire, or would they prefer a higher price ?  I noticed that the share price dipped a couple of weeks ago when the warrants expired just before the latest rise.  Can i ask what are your plans with the warrants you are invested in and what you are expecting / hoping for at expiry ?
> 
> Julia,  you mentioned another site talking about GTP.  Could you say which site that is ?  I trust you are happy with your portfolio balance now after selling down GTP ?  Hope you find something else on the way up.




Abucs:

There are several GTP posters at Share Scene.  I suspect at least one of them is a rampant ramper.

No, I'm still overweight in GTP and am looking to reduce it at least a further 60%.  So far, have moved funds from sale this week into BHP which has promptly rewarded me by dropping quite substantially.  However, I have obvious confidence in BHP's quick recovery, something that just isn't happening fast enough with GTP.  At worst, GTP, if it doesn't improve in the short term, will very likely go up substantially again in June with the end of financial year increase in sales.

Analyst:

Glad you're happy with the warrants.  I just don't want  them at present, but thanks for the suggestion.


Julia


----------



## TheAnalyst (11 January 2006)

*Re: Great Southern Plantations (GTP)*

As well as the news for GTP being exceptional at the moment...I have also noticed a triangle forming on the daily price charts as well..with the news behind it this is most likely to be a positive or a bullish pattern??


----------



## TheAnalyst (11 January 2006)

*Re: Great Southern Plantations (GTP)*

Here is a chart of GTP...first time i copied from big charts and edited to meet size requirements..if any one has any tips to make it easier would like to hear.


----------



## TheAnalyst (12 January 2006)

*Re: Great Southern Plantations (GTP)*

Buy recommendation in this mornings Melbourne Herald Sun business section..there was also a mention about once harvest takes place and investments resold over the vacant plantation space...something i had already mentioned in an earlier post...On todays financials share price can go to $6..thats without including any new projects in the pipeline...this company and its board at present are switched on micro-economically as they are looking at diversifying...on of the greatest strategies to reduce risk!!!!!!!


----------



## TheAnalyst (12 January 2006)

*Re: Great Southern Plantations (GTP)*

GTP is still climbing and on volume too. Any comments from anyone regarding the next resistence price for GTP>


----------



## abucs (12 January 2006)

*Re: Great Southern Plantations (GTP)*

I know very little about charting, but there seems to be nothing between the price now and the $4.40 - $4.50 mark.

One of the directors just bought $100K worth at $3.36, so a price of at least $4.00 seems likely.

GTP have consistantly continued to increase sales but the problem the company has is that not many people know how the sales are going in between the six monthly announcements, and sentiment seems to swing from wild enthusiasm through doubt to outright panic and then back again.

The director buying now would suggest the sales are continuing to progress well and there is good interest in the new products to be launched soon IMHO.  So it could be enthusiam again to $4.50 ?


----------



## TheAnalyst (12 January 2006)

*Re: Great Southern Plantations (GTP)*

good to hear from u abucs..started to feel like i was talking to myself on this thread.

$3.50 next resistence and wats actually happenning is the macquarie bank downgrade on the stock from last year doesnt look like eventuating..actually it is already on the last figures way past the previous forecast and the up grades are now starting to pour into the market.

Armed with this information the stock should start to return to the valuations that it held previously...these are more in line with the CEO'S forecasts...so it will easily jump the $3.60 and head to the $4-$4.50 area because of a bit of caution..then the all clear in June$$$


----------



## Duckman#72 (12 January 2006)

*Re: Great Southern Plantations (GTP)*

People are listening Analyst!! Just wanted to say nice reporting over the past couple of days. Rise in SP today was nicely forecast. Cheers. My humble opinion is back to $4.30 by midyear. Cheers


----------



## Julia (12 January 2006)

*Re: Great Southern Plantations (GTP)*

Ditto Analyst,

Don't feel you're talking to yourself on this one.  I'm watching avidly.
It seems to have been such a long wait for GTP to start moving again. I'm afraid to comment about the last few days for fear or jinxing the damn thing!!!

Julia


----------



## TheAnalyst (13 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				Julia said:
			
		

> Ditto Analyst,
> 
> Don't feel you're talking to yourself on this one.  I'm watching avidly.
> It seems to have been such a long wait for GTP to start moving again. I'm afraid to comment about the last few days for fear or jinxing the damn thing!!!
> ...




Its like that sometimes. Thats why i went the installment warrant way less capital more leverage and you dont have to be concerned just let it run


----------



## TheAnalyst (16 January 2006)

*Re: Great Southern Plantations (GTP)*

Looks like its continuing its run to meet its upgrade valuation...i will now be heading into some maquarie installment warrants.....hope to u all there as well


----------



## Lachlan6 (17 January 2006)

*Re: Great Southern Plantations (GTP)*

Despite the glowing fundamentals for GTP, the overall chart is still showing a downtrend. This is a strange situation given how good this company seems fundamentally, with a yield of 4% and PE of less than 8. However to change this scenario it would need to eliminate the series of lower lows and lower highs by breaking resistance at the mid 2005 high, around $4.40-$4.50. GTP may definently do so, but I would prefer to watch from the sidelines. The thing that really stands out with this chart which is a real positive though, is the 50% fibonacci retracement level. Look how well that has worked here. GTP's low of around $2.70 last year, was smack bang on this fibonacci level from the lows of 50c to the high of $5.00. I strongly believe in this fibonacci calculation again making this level CRUCIAL support. Chart is improving, lets see what happens.


----------



## TheAnalyst (17 January 2006)

*Re: Great Southern Plantations (GTP)*

Whats the point of believing in fibbio when you didnt jump on at the 50% retractment...if you under stood fundamentals it would have told you thts about as low as it will go based on the current announcements in the stock at the time.

The low was based on macquaries analyst down grade and then it went a bit lower than the actual downgrade given...the stocks next high after $4-$4.50 is $6 and then after that $7.50

Charting, fundamentals, experience, real accredited courses and an understanding of valuation methods, macro economice and micro economics all go hand in hand.


----------



## michael_selway (17 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> Whats the point of believing in fibbio when you didnt jump on at the 50% retractment...if you under stood fundamentals it would have told you thts about as low as it will go based on the current announcements in the stock at the time.
> 
> The low was based on macquaries analyst down grade and then it went a bit lower than the actual downgrade given...the stocks next high after $4-$4.50 is $6 and then after that $7.50
> 
> Charting, fundamentals, experience, real accredited courses and an understanding of valuation methods, macro economice and micro economics all go hand in hand.




Hi do u remeber what the macquaries downgrade price was?

thx


----------



## TheAnalyst (18 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				michael_selway said:
			
		

> Hi do u remeber what the macquaries downgrade price was?
> 
> thx



 about 15% of net profit from a price of $4.50


----------



## michael_selway (18 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> about 15% of net profit from a price of $4.50




Oh ok thx

yeah thing ive been wondering is that TIM and GTP are very similar businesses in a way. or are there significant differences?

yet Tim's forward 2006 PE = $3.12/0.261 = 11.95

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 21.1 26.1 30.5 33.9 
DPS 7.8 9.3 12.0 14.5 

but GTP's forward 2006 PE = $3.66/0.456 = 8.03

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 45.6 57.5 62.7 
DPS 14.0 16.5 21.5 23.5 

Forecast growth for 2007/07 seem very similar also, upwards.

TIM's sector is Materials (sector average 15 atm) and GTP is Diversified Financials (sector average 20 atm), does that have to do anything with it? or is GTP just undervalued atm (compared with TIM)?

Thanks

MS


----------



## TheAnalyst (19 January 2006)

*Re: Great Southern Plantations (GTP)*

GTP is less risk than TIM as GTP they transfer the risk on to the investor..market still is to catch on to this yet



			
				michael_selway said:
			
		

> Oh ok thx
> 
> yeah thing ive been wondering is that TIM and GTP are very similar businesses in a way. or are there significant differences?
> 
> ...


----------



## michael_selway (19 January 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> GTP is less risk than TIM as GTP they transfer the risk on to the investor..market still is to catch on to this yet




Oh ic, btw there appears to be new comptetion coming in, besides TIM, do u know whether these new entrants are succesful?


----------



## TheAnalyst (19 January 2006)

Very interesting post Mich and i love your stuff....u present facts and material for your questions and arguments.

Ok...we know for starters that Macquarie more than likely will be successful..the others i havent had a look at but would appreciate some summary information from you.

It is not a bother that there are new enterants as this MIS's is just beginning...i have done some low to the ground research around country areas and what i discovered was amazing...i will post what i found out on my country trip.


----------



## TheAnalyst (20 January 2006)

Micheal would you know what the entire MIS's is growing at annually in Australia as i know that the market is certainly not a stagnant sector...one of the fastest growing sectors in the economy.


----------



## TheAnalyst (24 January 2006)

Hi and how are you GTP fans? Not much news lately but still holding my GTPIZK's. Anyone have any comments......


----------



## Julia (24 January 2006)

Hello Analyst:

Not really.  I'm pretty much resigned to waiting for the rise which always occurs in May and June, at which time I'll be wanting to sell half my holding.
This is one of the most frustrating stocks in the market.

Julia


----------



## TheAnalyst (24 January 2006)

Julia said:
			
		

> Hello Analyst:
> 
> Not really.  I'm pretty much resigned to waiting for the rise which always occurs in May and June, at which time I'll be wanting to sell half my holding.
> This is one of the most frustrating stocks in the market.
> ...




Hi Julia

I dont think i will be selling at this time as i think that gtp have a few other creations in the pipeline and growth should become more stable and p/e will become higher as risk lessens


----------



## TheAnalyst (30 January 2006)

I sold all my BSLWMM today and now think it time to buy some more gtpizk's and might even get a few equity call warrants GTPWMA as welll with a ratio of 3:1 as the chart is looking good and worth the risk.


Not advice just what i do


----------



## TheAnalyst (31 January 2006)

Just need this one to break right thru the resistence of $3.75 and it should begin its march towards $4-$4.50 i bought my new lots this morning can someone just buy their new lot lolol


----------



## TheAnalyst (31 January 2006)

****Trading Account Number  	arrow1******  	 

 	Code    Holding                 Average                   
 	ANZIMP	600	1,873.80	3.123	2.94	1,764.00	-109.80	 
 	BGF 	2500	1,044.75	0.418	0.44	1,100.00	55.25	 
 	GTPIZK	4200	3,861.48	0.919	1.42	5,964.00	2,102.52	 
 	MBLIWH	100	2,175.80	21.758	20.71	2,071.00	-104.80	 
 	MGX 	1492	1,019.48	0.683	0.715	1,066.78	47.30	 
 	MMN 	4500	1,032.30	0.229	0.245	1,102.50	70.20	 
 	QMG 	1700	1,039.72	0.612	0.58	986.00	-53.72	 
 	RIOIZL	117	2,287.26	19.549	24.05	2,813.85	526.59	 
 	SEN 	2000	1,639.80	0.82	0.785	1,570.00	-69.80	 

  	TOTAL   	  	$ 15,974.39 


	Market
                                      Value $               Profit/Loss 

	  	  	$ 18,438.13 	$ 2,463.74 


Doesnt include this mornings accumulation of GTPIZK and GTPWMM

Also some trades prices are not up to date as most would now be in positive territory.

Who has got th eguts to show me theirs??


----------



## michael_selway (31 January 2006)

TheAnalyst said:
			
		

> Just need this one to break right thru the resistence of $3.75 and it should begin its march towards $4-$4.50 i bought my new lots this morning can someone just buy their new lot lolol




Hi when u say "new lots" u mean GTP or GTP warrants?

Also next resistance after 3.75, u say 4-4.5, where abouts exactly in the range do u see it?

thx

MS


----------



## TheAnalyst (31 January 2006)

michael_selway said:
			
		

> Hi when u say "new lots" u mean GTP or GTP warrants?
> 
> Also next resistance after 3.75, u say 4-4.5, where abouts exactalt in the range do u see?
> 
> ...




Hi mick

I bought GTPIZK installment warrants and GTPWMA equity call warrants

I really aint using the resitence on the charts but it is a key point but am actually using fundamentals and price valuations and the actual growth in the whole sector that they trade in.


----------



## TheAnalyst (1 February 2006)

Anyone got any thoughts or assumptions on GTP


----------



## savtin1 (1 February 2006)

I believe it is a undervalued stock. It is being bought up now and it won't be too long before it is in the $4's.

Technically the chart looks good - uptrend although it needs to get back up to $4.30.

Fundamentally they are sound.

I have calculated a sales figure of between $450 - 500 million well above the $400 million that Macquaries calculated.....and they did say that any price figure over $400 will be a bonus....  
'

regards

savtin


----------



## abucs (2 February 2006)

My thoughts are :

$230mil already to be recognised this year ($150m deferred from 05 and    $80m in woodlot sales to 31 dec)
+ $80 mil viticulture (forecast - Roadshow January 2006)
+ $60 mil olives (forecast - Roadshow January 2006)
+ $230 mil remaining 2006 woodlots (conserative estimate)


= $600 mil.


And this is not counting any revenue from the new cattle product.


----------



## TheAnalyst (2 February 2006)

Did you see how many call warrants GTPWMA got sucked up....huge over 1mil....also what about all those insto's that have accumulated as well....the bulls are there.....and what about Nick radges view as well...even though i was way on to this one before him...but still he finally caught on as well...wished he got em as cheap as me i reckon...but then again...I am TheAnalyst


----------



## michael_selway (2 February 2006)

abucs said:
			
		

> My thoughts are :
> 
> $230mil already to be recognised this year ($150m deferred from 05 and    $80m in woodlot sales to 31 dec)
> + $80 mil viticulture (forecast - Roadshow January 2006)
> ...




Hi Abucs is any of this revenue deffered till next financial year?

"+ $230 mil remaining 2006 woodlots (conserative estimate)"

Also Satvin, whats your breakdown for the 450-500mil revenue estimate

Thx

MS


----------



## TheAnalyst (2 February 2006)

i reckon they will be pushing to ensure they get recognised in this years financials as they would have already re arranged to settlement process to meet the new IAS'S this time around


----------



## abucs (2 February 2006)

Hi guys,

TheAnaylst, you could be right with the focus on sales for TFY.  Perhaps that explains the great half year result and the reluctance by management to  make much out of it.

From my understanding of the new accounting rules you could take $200 million out of my $600m figure when calculating profits for 06.  This $200 million would be deferred to 07 giving GTP another launching pad for next year.

Working on the most recent margin of 40% NPAT to sales this would give GTP a profit for 06 of $160 million (0.4 x $400m).  That's an increase of around 30% on last years figure and as stated that's not counting cattle for this year or any improvement in 2nd half wood plantation sales.

I wonder if the recent international roadshow has attracted any overseas buyers who are driving the price ?

As mentioned by Macquarie in their report, cashflow seems to be very important for this company.  The more sales they make (timber) the more land they will have to buy, and the less cash they have for dividends without capital raisings.

I guess it's a question for GTP when is it enough regarding their timber landholdings.  That's why i'd like to see a great investor response to the more cash flow positive products of grapes, olives and cattle.

I like the idea of owning more and more land, but then i'd like the dividends as well !!


----------



## savtin1 (4 February 2006)

Michael, Selway,

My break -up is as follows:

1. Timber plantations = $79 million + $285M (same figure as last years second half result - hopefully proves to be conservative) = $364M

2. Vineyards - Based on the 1000 Ha projection = $80 but lets book in $75M

3. Olives - $55 million.

4. Cattle - $10 million

This gives us a total sales figure of $364+75+55+10 = $504Million much more than the conservative estimate of Macuaries Report which had stated $400M.

Note also that the proportion of the "other than plantation" is about 28% similar to what they forecast at the AGM of up to 30%.

Now the recoginsed revenue for the year will be as follows:-

1. plantation (recognised say 48%) = 364 x .48 =175
2. vineyards - (recognised = 90% a figure i got from GTP) = 75 x .9 =68
3. olives ( recognised = 70% same as above) = 55 x .7 = 38.5
4. cattle (85%) = 10x .85 = 8.5
5. deferred revenue of $150 m

therefore we have the following: 
175+68+38.5+8.5+150 = $440Million add the other revenue as per last year say another $20million and this gives us Project Revenue of $460Million (45% increase on last years figure)

profit = .389 (similar margin to last year) x 460 = $178 million

cheers
savtin

GO GTP


----------



## michael_selway (4 February 2006)

savtin1 said:
			
		

> Michael, Selway,
> 
> My break -up is as follows:
> 
> ...




Hi Thx

In the 2nd half of the year, they earn alot more than the first half? Is there a reason for this?

"1. Timber plantations = $79 million + $285M (same figure as last years second half result - hopefully proves to be conservative) = $364M"

and another thing, u see below the trends in Revenue, NPAT, EPS etc

But how come an increase in 2005 NPAT of 124.3/93.2 = 33%, only means an increase in 2005 EPS of only 45.1/43.3 = 4.157%? Big difference! what happened there?







Is the number of shares increasing? how many shares does GTP have now? 

NPAT $178 mil but divided by how many shares?

Thanks 

MS


----------



## savtin1 (4 February 2006)

Michael,
Their EPS was affected last year due to the acquisition of the two companies
Environmest and the Tiwi Island Plantations as they issued more shares resulting in the dilution of the share registry. It is a short-term pain for a long term gain. they have approximatlety 300Million shares and with the new TREES3 (which can be converted in the future) some analysts would include these shares in the diluted EPS so i think it is 350million diluted shares....therefore my forecast EPS would be basic EPS 178/300 = 59cents ad diluted would be EPS = 178/350 = 50cents per share.


----------



## michael_selway (6 February 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> GTP is less risk than TIM as GTP they transfer the risk on to the investor..market still is to catch on to this yet




Hi Analyst, what do u mean when u say they tranfer the risk on to the investor? 

If TIM doesnt transfer risk to the "investor", does it have any advantages over GTP?

Satvin, yeah will have to wait and see, esp the sales for the 2nd half

thx

MS


----------



## TheAnalyst (6 February 2006)

*Re: Great Southern Plantations (GTP)*



			
				michael_selway said:
			
		

> Hi Analyst, what do u mean when u say they tranfer the risk on to the investor?
> 
> If TIM doesnt transfer risk to the "investor", does it have any advantages over GTP?
> 
> ...




timbercorp actauly owns theres but GTP does not own the product they produce on behalf of the investors as GTP only own the land and manage the harvest from plantation to sale.


----------



## michael_selway (6 February 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> timbercorp actauly owns theres but GTP does not own the product they produce on behalf of the investors as GTP only own the land and manage the harvest from plantation to sale.




Oh ok,

Is there any advantages of owning as opposed to not owning plantations?


----------



## TheAnalyst (6 February 2006)

*Re: Great Southern Plantations (GTP)*



			
				michael_selway said:
			
		

> Oh ok,
> 
> Is there any advantages of owning as opposed to not owning plantations?




yer, certianly if there is a bad year and there is a loss the owner of the crop bears the loss not the owner of the land.


----------



## michael_selway (7 February 2006)

*Re: Great Southern Plantations (GTP)*



			
				TheAnalyst said:
			
		

> yer, certianly if there is a bad year and there is a loss the owner of the crop bears the loss not the owner of the land.




Hi Analyst

actually i meant in the case for TIM, is there any advantages for owning the planations as opposed to just owning the land as for GTP?

What happens if it is a good year? TIM will earn relatively more as it owns the land as well as the actual planatations?

thx

MS


----------



## savtin (7 February 2006)

Michael,
I don't think TIM own the land like GTP ...they only lease it.


----------



## michael_selway (9 February 2006)

savtin said:
			
		

> Michael,
> I don't think TIM own the land like GTP ...they only lease it.




Oh ok thx

Btw why did they lower forecasts recently on comsec?

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 43.1 51.3 55.9 
DPS 14.0 14.0 19.0 18.0 

Before it was 

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 45.6 57.5 62.7 
DPS 14.0 16.5 21.5 23.5

Thx

MS


----------



## Nicks (10 February 2006)

GTP - a great stock, the results speak for themselves, and good value at the moment.


----------



## Julia (10 February 2006)

Nicks said:
			
		

> GTP - a great stock, the results speak for themselves, and good value at the moment.




Nicks:

Great avatar:  who is it?

Julia


----------



## michael_selway (11 February 2006)

Julia said:
			
		

> Nicks:
> 
> Great avatar:  who is it?
> 
> Julia




Hi Julia, u still hodl GTP right?

what price u thinkign of letting go of some?

also EXL, did u let go all of them already?

thx

MS


----------



## Julia (11 February 2006)

michael_selway said:
			
		

> Hi Julia, u still hodl GTP right?
> 
> what price u thinkign of letting go of some?
> 
> ...




Hi Michael,

Can't be too defiinite at this stage, but will sell 5000 at $4.00, possibly 10,000, depending on the situation at the time.  Then, if it goes to close to $5.00 at the peak at end of financial year, another 5,000 and hold the balance.

Re Excel:  exited this one a few weeks back when coal prices were looking doubtful.  It has since recovered somewhat, but I'm not comfortable enough with the fundamentals on coal at present to go back in.  Probably prefer to increase my position in BHP for its greater diversification.

Julia


----------



## michael_selway (11 February 2006)

Julia said:
			
		

> Hi Michael,
> 
> Can't be too defiinite at this stage, but will sell 5000 at $4.00, possibly 10,000, depending on the situation at the time.  Then, if it goes to close to $5.00 at the peak at end of financial year, another 5,000 and hold the balance.
> 
> ...




Hi Julia

yeah GTP wait and see what their annoucements have to offer. Seems theres some upside this year. If price is good, then sell some so u dont become overwieght etc. Also did u get the TREES3 offer last year?

EXL/BHP actually, not that long ago I had your view as well, however Thermal Coal prices are on the up again recently froma low in Nov 05. BHP even diversified now i think might be a bit risky because Base Metals have suffered 2 big corrections this week.  Also based on LME supplies, Zinc is the only base metal thats fundamentally still strong. Even Gold and SIlver have taken a hit. Coal only the other hand is still seen an important resource for energy such as electricity. Plus, EXL has recently been awared some long term contracts.

http://www.eurekareport.com.au/iis/iis.nsf/ak/ZQUqMF?opendocument&code=DhupfU

PORTFOLIO POINT: The price of gold is rising dramatically, but the underlying fundamentals of this commodity are unreliable. As a tangible alternative asset gold may attract some investors, but it remains a highly speculative investment.

http://www.globalcoal.com

NEWC Index (weekly)

13-Jan-06	42.97
20-Jan-06	44.51
27-Jan-06	46.18
03-Feb-06	47.87
10-Feb-06	50.02

NEWC Index (monthly)

Oct-05	40.89
Nov-05	37.32
Dec-05	39.16
Jan-06	43.73

Spot prices (USD/tonne) for coal to be delivered in the 3 calendar months following publication date.


----------



## Nicks (14 February 2006)

Hey Julia.

Its me in the pic. Al Pacino. Nick is my middle name.

Oh and why did I buy GTP (and lots of it) - after driving through some of their country a couple of months back on a trip I saw real capital. Guess when you see it with your own eyes and how impressive it is you learn to appreciate companies that have real capital, real income and real profits.
They have the assets to deliver the dividends and the PE does not reflect this. Good for us who have it and want to buy it.


----------



## Nicks (14 February 2006)

oh and to reinforce, look at ANEs share price movement the last couplde of weeks.


----------



## michael_selway (14 February 2006)

Nicks said:
			
		

> oh and to reinforce, look at ANEs share price movement the last couplde of weeks.




Is ANE more similar to GTP or TIM or neither?

thx

MS


----------



## Nicks (14 February 2006)

GTP


----------



## abucs (15 February 2006)

Does anybody have ideas why ANE with more debt is almost twice the PE of Great Southern ?????


----------



## Nicks (15 February 2006)

People havent yet caught on to the real value of GTP. ANE is also value but this is already reflected in the PE. 
What does this mean? good value for those of us buying GTP now. As value is realised PE will correct and share price will reflect value more appropriately.
If I had more money to spend id be buying more of this and AVO right now.


----------



## michael_selway (20 February 2006)

Nicks said:
			
		

> People havent yet caught on to the real value of GTP. ANE is also value but this is already reflected in the PE.
> What does this mean? good value for those of us buying GTP now. As value is realised PE will correct and share price will reflect value more appropriately.
> If I had more money to spend id be buying more of this and AVO right now.




Anoucement today

Does anyone know what this means?

*The contract is on a Free on Board (FOB) basis, which is expected to result in higher returns to Great Southern’s investors.*

higher returns to shreholders? how much in EPS?

thx

MS

----------------------------------------

*COMPANY ANNOUNCEMENT / MEDIA RELEASE
Monday 20 February 2006

Great Southern Plantations signs major woodchip sale contract*

Agribusiness investment manager Great Southern Plantations (ASX code: GTP) has signed a contract with a leading Japanese company for the sale of hardwood woodchips, to be exported from the Port of Albany in Western Australia.

The buyer is major trading company Itochu Australia Ltd, with the ultimate user being one of the largest paper manufacturers in the world. The contract, which will run from 2007, will result in the export of approximately 1.5 million tonnes of woodchip, worth more than $130 million in today’s
terms.

“Great Southern is delighted to have secured this contract, which is the culmination of a long-term relationship with Itochu,” said Great Southern’s Managing Director, John Young. “It effectively means that all the resource from our first six projects in the Albany region has been contracted.”

The contract is on a Free on Board (FOB) basis, which is expected to result in higher returns to Great Southern’s investors. Great Southern now has in excess of 40,000 hectares of hardwood plantations under management in the Albany region, which is just a part of the company’s national plantation estate of more than 110,000 hectares.

Great Southern’s exports commenced in February 2005, and to date the company has shipped, pursuant to a separate contractual arrangement with Sojitz Corporation, more than 187,000 tonnes of woodchip through the Port of Albany.

“With this latest contract, we are now poised to grow the export side of our business, generating significant benefits to the region including employment opportunities,â Mr Young said.


----------



## savtin1 (21 February 2006)

The higher result will benefit the "grower investors" not the "shareholder investors" as per se. i.e. they will get a better return on their invested capital. The individuals that invest in their timber plantation products.


----------



## Nicks (21 February 2006)

savtin1 said:
			
		

> The higher result will benefit the "grower investors" not the "shareholder investors" as per se. i.e. they will get a better return on their invested capital. The individuals that invest in their timber plantation products.




Disagree. GTP manages the plantations and will benefit significantly from this contract. Thus benefitting the owners of GTP (us shareholders) along with investors in the particular products.

I hold GTP and it is because I think it is a good stock.


.... just thought id add that if you read the article closely it is apparent how significant this news is, look at each of the points they are making in the article, this is a big windfall. ALthough a small increase in share price today, I think shareprice has not caught up to the effects of this windfall yet let alone the business as a whole.


----------



## savtin (21 February 2006)

Sorry Nicks....you are right in general (overall) we all as shareholders will benefit...and I am an avid supporter and long term holder of GTP.....I was upset when it reached $3.90 yesterday only to close at $3.73.........

but my response to michael related to the money the growers would make from the deal.....but yes overall EXCELLENT NEWS..

GO GTP.......


p.s Nicks, how long do you think before we are back over $4.00 seems to be vasilating at present.......

results out tuesday next week (i expect them to be good) so hopefully we will see the SP be re-rated shortly.


----------



## abucs (21 February 2006)

FOB "Free on Board" basis means that Great Southern will arrange for the trees to be made into woodchips before being transported to Japan.
This will mean a greater volume per ship will be transported and woodchipping will not needed to be done in Japan thus the Japanese will pay a higher price for the FOB woodchips meaning a better return for  woodlot investors and GTP in general.
I liked the comment by the relevant minister in the latest GTP newsletter when he says it is vital that nothing impedes the investment in plantations and that the tax system should be set to achieve this.
I got the feeling that if there are tax changes the government will look at helping the  plantation agribusiness sector so as to not be adversely affected and hopefully give it an extra boost as well.


----------



## michael_selway (22 February 2006)

abucs said:
			
		

> FOB "Free on Board" basis means that Great Southern will arrange for the trees to be made into woodchips before being transported to Japan.
> This will mean a greater volume per ship will be transported and woodchipping will not needed to be done in Japan thus the Japanese will pay a higher price for the FOB woodchips meaning a better return for  woodlot investors and GTP in general.
> I liked the comment by the relevant minister in the latest GTP newsletter when he says it is vital that nothing impedes the investment in plantations and that the tax system should be set to achieve this.
> I got the feeling that if there are tax changes the government will look at helping the  plantation agribusiness sector so as to not be adversely affected and hopefully give it an extra boost as well.




ic thx guys, 

btw something about woodchips

http://biz.yahoo.com/ap/060221/bush.html?.v=1

"The White House says Bush is providing that leadership. They say he wants to invest more in zero-emission, coal-fired plants, as well as support solar and wind research, promote cars that run on hydrogen, encourage more nuclear power plant construction and fund work to produce ethanol -- not just from corn, but from wood chips and switch grass."


----------



## abucs (22 February 2006)

"Zero emmission, coal-fired plants"  )

It sounds promising though Michael. Had not heard of woodchips producing ethanol before.

The quote from my last entry was from Richard Colbeck, the parliamentary secretary for agriculture, forestry and fisheries.

I think the interesting part was when he said :

"We must ensure there are no impediments to plantation investment and, as part of this, the government is determining whether the current tax regime is providing an appropriate investment environment".


----------



## Duckman#72 (22 February 2006)

abucs said:
			
		

> "We must ensure there are no impediments to plantation investment and, as part of this, the government is determining whether the current tax regime is providing an appropriate investment environment".




Hi abucs

I'm a GTP holder as well. 

I don't know what else the government can do to make it more attractive to investors - unless they start to make it a 125% tax deduction. The current regime has done wonders for the agribusiness sector. Particularly after the ATO sorted out their Tax Rulings and there are no longer the "cowboys" in the industry selling everything from tea tree plantations to ostrich farms. 

Hope the public keep pouring it in - I'm happy to be a shareholder.

Duckman


----------



## savtin1 (22 February 2006)

Duckman#72 and abucs

For one they can delete that dreadful sunset clause......so that the 12 month pre-payment rule stays in place until 2020 at least...that way the sector and the respective companies won't have to wait with bated breath each time it is up for renewal (as is the case in June 2008) which i think they will comment upon in this years budget (i think in May)......

anyway what are all your thoughts in regards to when GTP will finally crash through the $4.00 barrier....it's been awhile but I will sigh a relief when it finally gets there.............i am also hoping for  a good (strong) half -year result...next tuesday.....fingers crossed.......  

cheers
savtin


----------



## abucs (23 February 2006)

Duckman72 and Savtin1.  I agree the government has been very helpful and they see the industry as important in many ways. I was also thinking about a 125% tax deduction as well.  It's been done before. It would help in the event of  the top tax rate coming down to 40%. I have talked to John Young before about this and he didn't think a tax reduction would hurt sales so much.  I'm not so sure myself though, every point tax reduction would translate into a lower overall return i would thiink. Although last year, over half the investors were not on the higher tax rate. 
A 125% rule or an icrease in sales would be enough to sale past $4.00.
An extension of the sunset clause would be nice although in 2009 GTP will start to rotate about 20,000ha that will not need the 12 month rule and thus give them an advantage over competitors if the rule is scrapped. I think GTP is a good investment but in a strange way it will only get extremely good as far as dividends are concerned when the plantation sales slow down and GTP doesn't have to spend a greater amount each year on land purchases.
In combination with land rotation and income from cattle, grapes and olives, the dividend could soar over 40c, and drive the share price towards $10.  We just have to wait. I think over the next 5 - 7 years we'll see a slow rise to the $10 mark.


----------



## savtin (23 February 2006)

Hi all GTP holders please find below a great article on the company released recently,

 Australian Money Trees, Part II 
The Rude Awakening 
Wall Street, New York 


Joel Bowman, reporting from the chilly woodlands of upstate New York... 

Yesterday, in part one of his report from down under, Steve Sjuggerud introduced you to an amazing investment idea that gave new meaning to the old, "money doesn't grow on trees," adage. If you missed the first installment of this you can check it out at: 

http://www.howestreet.com/articles/index.php/daily?article_id=2073 

We return to the sun burnt land today where Steve pulls the figures together and shows you why investing your greenbacks in green trees might not be such a bad way to go. Actually, you could stand to make quite a healthy return. Read on below for today's Rude Awakening... 

------------------------- 

Australian Money Trees, Part II 
By Dr. Steve Sjuggerud 

In yesterday's Rude Awakening, I introduced you to a very unique timber investment. An Australian company named Great Southern Plantations (GTP.AX) buys timberland, then sells interests in the timber harvests to individual investors. Once the harvest occurs, Great Southern replants and sells the next generation of timber harvest to a new set of investors. It's a terrific business model...and one that benefits from some very sizeable Australian tax breaks. 

For reasons that I explained in yesterday's column, Great Southern's shares were obliterated back in 2001-02, but have recovered nicely. The company's sales have recovered dramatically too. 

From A$50 million in fiscal year 2002, sales at Great Southern grew to A$300 million in FY2005. Sales in FY 2006 could easily exceed A$400 million. And as financial planners that have just been added to the sales force get going, FY 2007 could see sales of A$500 million. 

For a company experiencing this kind of growth, you might think these shares would trade at growth-stock prices. You'd be wrong... 

The consensus estimate of earnings from analysts in Australia for next year is A$0.57 cents per share. At a share price of A$3.50, that puts the P/E of Great Southern (based on analyst estimates) at about 6. Man that's cheap! 

Great Southern pays out a nice dividend too, in the 5% range. 

The sweet spot for Great Southern really gets going in 2009. I say this because this is when the big "rollovers" start to happen with existing timberlands. Right now, Great Southern's cash flows aren't great, because they still have to use the cash coming in to buy timberlands. 

But by 2009, they'll have about 20,000 hectares a year rolling over... that's 20,000 hectares of land they can "resell" at no cost to them. 

At the moment, business is almost too good... Great Southern is able to sell more investment products than it has available land. So it's been borrowing money (by issuing what are basically convertible bonds) to buy chunks of land. 

Great Southern has acted opportunistically. At this moment, I'm writing to you from Margaret River, Western Australia. On my way down from Perth, I passed winery after winery. This is wine country. 

Great Southern has used the proceeds from these convertible bonds to acquire some existing vineyards and cattle lands. They can package and sell these as investments similar to their timber deals, with returns coming to investors much quicker than with timberland. This also diversifies Great Southern, so that it doesn't have to always rely on timberland. 

The biggest concern to me with this company is that it continuously issues convertible bonds to buy new properties. This process will "dilute" the shareholders. Of course, if these borrowings create value above the cost of capital, the dilution is no problem. But there's one thing that makes me comfortable enough to recommend Great Southern... and that's John Young's stake... 

John Young owns nearly 50 million shares of stock (out of the 300 million shares outstanding). So he personally owns about one-sixth of the shares. As of the latest annual report, John owned no convertible bonds. 

John Young is a Big Cheese at Great Southern, the Managing Director. The last thing he'd do is dilute his own wealth by issuing any more convertible bonds than are absolutely necessary to run the business properly. So while I have concerns about future dilution of shareholders, I know that John Young will be looking out for his own shares, and will do his best to limit hurting his own wealth. 

Looking at the valuation, Great Southern's timberlands were independently valued in June of 2005 by the highly- respected real estate firm CB Richard Ellis at A$620 million. As of its latest balance sheet, Great Southern had about A$120 million in cash. So in just earth and cash alone, you're looking at almost A$750 million in value. Yet the stock market value of Great Southern as I write to you is A$1 billion, which is about $750 million in U.S. dollars. 

Beyond just the land and cash, you've got the portfolio of investor loans (paying Great Southern 12%), you've got Great Southern's loyal customer base (60% of Great Southern's 30,000 customers in the latest year were repeat customers), and you've got Great Southern's distribution base of 5,000 financial planners. 

Remember, the investment product Great Southern sells is irresistible to individual Australian investors... It gives the average investor a generous tax benefit immediately, AND it provides them a nice return on investment in ten years time (I wish we had things like this in the States!) It's also irresistible to financial planners, as Great Southern pays out large commissions. 

Great Southern can practically grow as fast as it wants. Remember, the big profits will start to show in 2009, as larger tracts of land are able to be resold. Since Australians are still skeptical of these tax-related things, I think the shares are a bit hated. For now, Great Southern is cheap at a forward P/E of 6 and paying a dividend yield of 5.3%. But the uptrend since 2002 is clearly in place. 

All this is well and good... But it's not the important thing. The important thing is the ever-increasing pile of timberland that Great Southern gets paid every ten years to hold and increase. That is the jewel. 

Remember Otto von Bismarck: "Investing in paper securities was a fine and quick way to get richer, but the repository of true wealth should be land on which you could grow trees." 

With Great Southern, that's exactly what we get. 

--------------------------------------------------------------------------------


----------



## Julia (23 February 2006)

Savtin:

Great article.  Pity it's not on the front page of the AFR or SMH.

Regards

Julia


----------



## michael_selway (23 February 2006)

Julia said:
			
		

> Savtin:
> 
> Great article.  Pity it's not on the front page of the AFR or SMH.
> 
> ...




yep, 

that dilution of shares is an issue, but seems its under control for the moment

thx

MS


----------



## abucs (23 February 2006)

Hi Michael.  Yeah, i don't like the dilution either.  Perhaps the companies  announcement on other debt strategies means the dilutions in the future will become less needed (diluted even).

Hi Julia. Hopefully the recent international roadshow presentations will entice foreigners into the GTP market as well. Maybe this article came out of that. If so, hats of to GTP directors..

Hi Savtin1.  Great articles and very informative. Thanks very much.


----------



## abucs (24 February 2006)

Shareholders Buying 

Date            Shareholder Name                     Previous %      New % 

13-12-05      UBS Nominees Pty Ltd                      0             6.79      
16-11-05      Commonwealth Bank Group           9.09            10.11 
02-11-05      Orion Asset Management                  0              5.04  
26-10-05      Commonwealth Bank Group            7.77             9.09 
02-06-05      Commonwealth Bank Group            6.63             7.77 

Shareholders Selling 

No Shareholders Selling 



Substantial Shareholders List  

Lattitude Holdings Pty Ltd (ATF Carlton Trust) 47,178,957                 17.04 
Commonwealth Bank Group 30,282,097                                           10.11 
Orion Asset Management Limited 15,081,629                                     5.04 
UBS Nominees Pty Ltd and its related bodies corporate 20,332,425        6.79 


Will be interesting to keep an eye on the top 4 holders.  If they hold and buy more it could force up the stock price quite rapidly.  They now hold 39% of the shares available.


----------



## savtin1 (28 February 2006)

Results are out.    Woooooo eeeeee 219% increase in revenues and $108 million in plantations alone an increase of 70%. this is a very good result....


Go GTP should hit $4 tomorrow.......................


----------



## michael_selway (28 February 2006)

savtin1 said:
			
		

> Results are out.    Woooooo eeeeee 219% increase in revenues and $108 million in plantations alone an increase of 70%. this is a very good result....
> 
> 
> Go GTP should hit $4 tomorrow.......................




Hehe yes i hope so

Btw what do u think the 2006 NPAT and EPS estimate will be now for the full year based on below and the new half year results?

http://www.asx.com.au:80//asxpdf/20060228/pdf/3vnfgxltzm7py.pdf
http://www.asx.com.au:80//asxpdf/20060228/pdf/3vnffhn3kbkpk.pdf

thx

MS 



			
				savtin1 said:
			
		

> Michael, Selway,
> 
> My break -up is as follows:
> 
> ...


----------



## michael_selway (1 March 2006)

Not much movement today

It seems probably the Sales in the 2nd half will be the deciding factor?

thx

ms


----------



## savtin1 (1 March 2006)

I don't know about that....I think you'll see some major buying in the next two weeks..The company will be holding some Institutinal Roadshow presentations to investment bankers and to other institutional investors in the coming days....this should spark some interest....the good figures coming out of GTP can't be ignored for too long............i guess time will tell.


----------



## savtin1 (1 March 2006)

Hi Michael,

My revised sales forecasts are as follows: -

1. Timber plantations =_ $108 million + $265M _ (same figure as last years second half result - hopefully proves to be conservative) = _$373M_
2. Vineyards - Based on the 1000 Ha projection = $80 but lets book in $75M

3. Olives - _Now based on 800 Ha $64 million._
4. Cattle - _$15 million_

This gives us a total sales figure of _$373+75+64+15 = $527Million _ much more than the conservative estimate of Macuaries Report which had stated $400M.

Note also that the proportion of the "other than plantation" is about 28% similar to what they forecast at the AGM of up to 30%.

Now the recoginsed revenue for the year will be as follows:-

1. plantation (recognised say 48%) = 373 x .48 =179
2. vineyards - (recognised = 90% a figure i got from GTP) = 75 x .9 =68
3. olives ( recognised = 70% same as above) = 64x .7 = 44
4. cattle (85%) = 15x .85 =12
5. deferred revenue of $150 m 

therefore we have the following: 
179+68+44.5+12+150 = $453Million add the other revenue as per last year say another $20million and this gives us Project Revenue of $473Million (45% increase on last years figure)

profit = .389 (similar margin to last year) x 473 = $183 million

Their EPS was affected last year due to the acquisition of the two companies
Environmest and the Tiwi Island Plantations as they issued more shares resulting in the dilution of the share registry. It is a short-term pain for a long term gain. they have approximatlety 300Million shares and with the new TREES3 (which can be converted in the future) some analysts would include these shares in the diluted EPS so i think it is 350million diluted shares....therefore my forecast EPS would be basic EPS 183/300 = 61cents ad diluted would be EPS = 183/350 = 52cents per share.


----------



## abucs (1 March 2006)

The 1/2 year roadshow presentation has just been released.

Glad to see the emphasis on Capital Management and the moving away from the hybrids and the focus on non plantation products.

i think this would be the the no. 1 issue for institutional investors who want  to see an income sooner rather than later.

Great Southern previously had an institutional rising with a GTP shareprice of $4.65 or so. If they can sell the GTP story (and especially the income/cashflows) then the price could head up towards that level.

Cheers.


----------



## Julia (1 March 2006)

savtin1 said:
			
		

> I don't know about that....I think you'll see some major buying in the next two weeks..The company will be holding some Institutinal Roadshow presentations to investment bankers and to other institutional investors in the coming days....this should spark some interest....the good figures coming out of GTP can't be ignored for too long............i guess time will tell.




Hi Savtin,

I have to really admire your unquenchable optimism re GTP.  I felt that way a while ago, but have since completely lost my emotional attachment to this stock.  I'm still holding but will be very happy to sell most at $4 if it ever gets back to that.

There are too many other companies out there to which is attached much less volatility and anxiety imo.

All the best 

Julia


----------



## Nick Radge (3 March 2006)

Here is some shorter term analysis I have done on GTP

www.projectstreamer.com/users/reefcap/GTP_Daily/


----------



## Julia (3 March 2006)

Nick Radge said:
			
		

> Here is some shorter term analysis I have done on GTP
> 
> www.projectstreamer.com/users/reefcap/GTP_Daily/




Nick;

Thank you.  That's really interesting.  You point out that your analysis is from a short term point of view.  Could you make some general comments regarding GTP from a longer term investor point of view.  In past years the stock has increased at the end of the financial year when investors in the MIS plans boost sales and the SP appears to enjoy a similar rise.

Are you able to comment on the range you might expect the SP to achieve in May/June this year?

What comments could you perhaps make regarding the holding of GTP for the longer term, i.e. 12 months?

With thanks

Julia


----------



## michael_selway (3 March 2006)

Julia said:
			
		

> Hi Savtin,
> 
> I have to really admire your unquenchable optimism re GTP.  I felt that way a while ago, but have since completely lost my emotional attachment to this stock.  I'm still holding but will be very happy to sell most at $4 if it ever gets back to that.
> 
> ...




The only last thing i can see is the final report in 6 months time

Then we will truly see what the market thinks of GTP, hopefully start of a true up tend that can last a long time

thx

MS


----------



## It's Snake Pliskin (4 March 2006)

Nick Radge said:
			
		

> Here is some shorter term analysis I have done on GTP
> 
> www.projectstreamer.com/users/reefcap/GTP_Daily/




Nick that is good commentary. Is this what you do with your charting service?


----------



## Nick Radge (4 March 2006)

Snake,
Yes, this style is being blended into the current subscription. It's a more personal touch and which enables better understanding and teaching. 

Julia,
I can't offer too much, suffice to say that I'm retaining my bullish outlook for GTP. I have my clients long at $3.15 and we'll hold that until significant bearish volume appears.

Nick


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information._


----------



## michael_selway (6 March 2006)

Nick Radge said:
			
		

> Snake,
> Yes, this style is being blended into the current subscription. It's a more personal touch and which enables better understanding and teaching.
> 
> Julia,
> ...




Are there any SMH/AFR/Broker etc articles out recently about outlook for GTP? I really want to hear their opinion

Thanks

MS


----------



## It's Snake Pliskin (6 March 2006)

michael_selway said:
			
		

> Are there any SMH/AFR/Broker etc articles out recently about outlook for GTP? I really want to hear their opinion
> 
> Thanks
> 
> MS




They are misleading! :bs:


----------



## abucs (6 March 2006)

*Great Southern Plantations*

The Macquarie Bank analysis on GTP's website explains much of the nature of the business and especially cashflows.  It is dated 8th December but the only thing that has changed since that date is another 50% plus increase in revenue. It's good to read independent analysis of the company but everyone should have their own idea on what a company is worth.
For example, Macquarie previously said GTP was worth high $3 mark and then $2.80 and then $3.80 and now somewhere between $4.10 and $4.34 or so.  The market reacts each time while the underlying business stays much the same. I remember when GTP went down to 35c and there wasn't one broker who recommended it, but quite a few that put out the big STAY AWAY and AVOID signs.  Then when it went on the big meteoric rise they were all telling us to get on it and how a stock like this "comes along only once in a generation".  I think the latest weakness is to do with the cashflows and the impact of this on paying dividends.  GTP in its latest presentation has capital management and cashflows as their main theme which is a comfort to me.  I am happy to hold on the underlying strength of the business and have bought more in periods of weakness.


----------



## Nicks (6 March 2006)

GTP - look at the fundamentals and do the math, its that simple. A great stock, investment and company.
Once others catch on I expect the price to rise reflecting the value in GTP.


----------



## pch (6 March 2006)

I like Michael's signature "A company is worth the present value of all future cashflows discounted for time and risk, nothing more or less.". 

If you do a bunch of DCF's around EPS and ROE you will see that even on very conservative assumptions, its easy to make it worth $4.20 and up.

I just did EPS DCF using these assumptions:

- Sell in 5 years
- Selling PE 10
- Discount Rate 10% 
- EPS growth: Comsec EPS forecasts for the next 2 FY's, 5% thereafter
- 100% franked dividends paid out 77% of the time

Valuation came in around $4.20. Changing the growth rate to 10% from 5% and it comes out at $4.60

Does someone want to check my math as I may be wrong..


----------



## abucs (6 March 2006)

Hi Nicks and pch, it's good to see people taking a fundamental long term view of GTP.  The only thing that i would add to the valuations is that in 4-5 years time the saving in CAPEX with the rotation of the land, together with the recurring and compounding income from the cattle, grapes and olives will contribute to a very large increase in EPS and cause increases in EPS closer to 30%.


----------



## pch (6 March 2006)

yep - but its best to keep assumptions modest at best..


----------



## michael_selway (6 March 2006)

pch said:
			
		

> I like Michael's signature "A company is worth the present value of all future cashflows discounted for time and risk, nothing more or less.".
> 
> If you do a bunch of DCF's around EPS and ROE you will see that even on very conservative assumptions, its easy to make it worth $4.20 and up.
> 
> ...




yep, here are the lastest Comsec Forecasts (although before the half yearly and woodship annoucements). Ill post up newer forecasts when they are up

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 43.1 50.2 54.6 
DPS 14.0 14.0 19.0 18.0

Yep better to be conservative, even 10% compounded for 5 yrs is conservative imo, so 4.60 now is about right.

Thanks

MS


----------



## pch (6 March 2006)

Where on Comsec did you get the 08 forecast? I didn't see it in the forecasts section of the stock nor the advanced search tool?

FORECAST EARNINGS  Last Analyst Update  
 3 March, 2006 
 EPS(c) PE Growth 
Year Ending 30-06-06 43.1 8.6 3.4% 
Year Ending 30-06-07 50.2 7.4 16.5%


----------



## michael_selway (6 March 2006)

pch said:
			
		

> Where on Comsec did you get the 08 forecast? I didn't see it in the forecasts section of the stock nor the advanced search tool?
> 
> FORECAST EARNINGS  Last Analyst Update
> 3 March, 2006
> ...




hi "Research/Main Menu" section

Yeah "Forecast" section only shows 2006 and  2007

thx

MS


----------



## michael_selway (7 March 2006)

New forecasts up on Comsec today, not much change for some reason! The funny thing is that these still seem so conservative compared to what others have suggested here

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 44.1 51.4 55.9 
DPS 14.0 14.0 19.0 18.0 

Was before

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 43.1 50.2 54.6 
DPS 14.0 14.0 19.0 18.0

Thanks


----------



## Julia (7 March 2006)

michael_selway said:
			
		

> New forecasts up on Comsec today, not much change for some reason! The funny thing is that these still seem so conservative compared to what others have suggested here
> 
> Earnings and Dividends Forecast (cents per share)
> 2005 2006 2007 2008
> ...




Hi Michael,

What is Comsec's actual recommendation on GTP?

SP rose 12c today.

Julia


----------



## michael_selway (7 March 2006)

Julia said:
			
		

> Hi Michael,
> 
> What is Comsec's actual recommendation on GTP?
> 
> ...




Hi Julia

Dont think they updated in a while yet but atm

1 Strong Buy 3 Moderate Buys

CONTRIBUTING ANALYSTS  
FORESIGHT CAPITAL, MACQUARIE RESEARCH EQUITIES, TOLHURST NOALL LIMITED, LINWAR SECURITIES PTY LTD

Thanks

MS


----------



## savtin1 (7 March 2006)

Hi Michael,

Don't forget that the EPS shown on comsec web is diluted EPS (358Million shares expanded base if all TREES and Options converted).

Essentially the EPS of 44.4 cents is based on around $400 million sales figure

if you believe the Sales will be $450 the EPS goes to 47.3 cents and if it is $500 million  then it is about 50cents. I have a spread sheet that lets you input the sales for each product and then the percentage recogintion and so forth until you get a profit result. Mind you the results are only as good as the assumed inputs...so if they don't for e.g sell the expected 700 hectares of olive lots then the sales guestimates and resulting profits don't eventuate.

We can only hope that the expanding sales network that GTP has built recently, works effectively with all the products, especially towards the end of the financial year. SO far so good with the results to date but it is still early days..........i am quitely confident of the sales in olives , cattle and plantations.........i just hope that the sales of vineyards isn't negatively affected with all the negative media around regarding the wine glut in current supply............ a shrewd investor will look beyond the current shortage ..........but it comes to how well they sell the product..

cheers
savtin


----------



## abucs (7 March 2006)

Yes there could be some investors put off by the current condition of the Australian wine industry although GTP's offerings are still rather smallish and have the benefit of large players such as Fosters contracted to buy grapes.
The current selling of vineyards is quite good for GTP as with lots of cash, they are buying vineyards for sale under quite good terms.
I wonder if todays buying was helped by the news of UBS increasing their share and if there will be a corresponding selling tomorrow with the news that Orion has sold a similar number of shares. (About 1% of capitalisation).


----------



## savtin1 (8 March 2006)

Well at least we know who was doing the buying and who was selling.
Let us all hope that it is UBS Nominees that are the smart money in this deal.


----------



## michael_selway (8 March 2006)

savtin1 said:
			
		

> Well at least we know who was doing the buying and who was selling.
> Let us all hope that it is UBS Nominees that are the smart money in this deal.




Hi new forecasts look much better!

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.2 54.2 58.7 
DPS 14.0 14.0 19.0 18.0 

Was before after Half Yearly

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 44.1 51.4 55.9 
DPS 14.0 14.0 19.0 18.0 

Was before Half Yearly

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 43.1 50.2 54.6 
DPS 14.0 14.0 19.0 18.0

Thx

MS


----------



## abucs (8 March 2006)

Looks like a good trend Michael.  Nice to hear.


----------



## GreatPig (9 March 2006)

GTP is already showing over 20 million shares traded at 8:20am, where the 100 day EMA is about 1.3m. I'm not getting an estimated opening, but it looks like it could be 8-10 cents higher than yesterday's close.

Sounds promising so far.

Cheers,
GP


----------



## GreatPig (9 March 2006)

Hmm... opened at $3.77 then immediately back to yesterday's close of $3.72.

GP


----------



## Ann (9 March 2006)

Greetings all,

May I offer my view in a chart....


----------



## Julia (9 March 2006)

Nick:

If you're following this, could you perhaps offer your comments?

With thanks

Julia


----------



## abucs (9 March 2006)

Hi Great Pig.

Yeah it is a mystery at the moment.
The TREES are still trading until April, Orion doesn't / didn't have 20 million shares.
That leaves UBS, CBA or John Young to be selling to an institutional investor at a guess.

Looks like the good news is someone is buying, and the bad news is someone is selling.   )


----------



## michael_selway (9 March 2006)

abucs said:
			
		

> Looks like the good news is someone is buying, and the bad news is someone is selling.   )




hehe but whether the price goes up/down depends on whose more eager


----------



## savtin (9 March 2006)

My opinion is that it is a broker who is doing an internal transfer for Tax loss purposes....just my hunch. We will find out in a few days when and if a company lodges an increase or decrease in holdings. Remember if it is an internal thing there won't be a lodgement.


----------



## GreatPig (9 March 2006)

The substantial holding change notices have already been lodged.

It would appear that Orion is the seller, UBS Nominees the buyer.

GP


----------



## abucs (9 March 2006)

Hi guys,

Interesting comment Savtin. Will look with interest for the (non) / lodgement.
I wonder what the ATO makes of that practise ?  )

Glad it's not one of you guys eagerly selling your holdings.  Would be a shame to lose you from this thread.  )


----------



## Nicks (9 March 2006)

Hi All / Julia

Initially I was somewhat perplexed (and have been about this stock for a few days now) but after some thought and analysis I think we can draw a picture of what is occuring.

Possibly someone had realised this is a great stock and bought heaps : p

The volumes are enourmous and unusual, and moving up, so it must be a buyer (institutional?) or perhaps 2.

It is good value and about to pay dividend, those 2 together = nice carrot to dangle. Add this to the fact that it has huge volumes and an upward trend this is what I think:

My position is that a big investor has come along after seeing (maybe even driving?) the price down a little over the last few days, knowing it is already an excellent buy and is now doing a opportunist / counter offensive to increase its holdings while it can, before the price gets back to a truly reflective level based on value and dividend (FF) as the time gets closer. This is wise and smart, not only will they gain from capital as the share pass $4 and beyond, but also pick up a fully franked 1% interim dividend on they way.

Recommend Buy imho and be an opportunist as well.

I hold GTP. If you do the maths at P/E and dividend you cant go wrong with this stock, which has real assets and business. We all need trees...


----------



## Ann (9 March 2006)

GreatPig said:
			
		

> The substantial holding change notices have already been lodged.
> 
> It would appear that Orion is the seller, UBS Nominees the buyer.
> 
> GP




That is very interesting Great Pig,

Do you have any thoughts on it...good? Bad? Totally undecided with no idea? Couldn't care less just saying what is going on? Anything from you would be good.


----------



## Nicks (9 March 2006)

yes but does that account for todays volumes? it obviusly doesnt account for it but could be an indication, so maybe / maybe not.

could be indicative of their interests though and it could be what is happening today, then again maybe someone else. What is fact though is that the volumes are very high and there is clearly the buy support.


----------



## Ann (9 March 2006)

Hi Great Pig,

I don't think these are the people. I just had a quick look at the notices and we are not talking big figures . UBS have just increased by just over 3mil and Orion about 2.5 mil. I wonder if it has anything to do with the TREES conversion announced on the 3/3/06?


----------



## Ann (9 March 2006)

Hi Nicks,

It was a single trade that went through this morning at 7:16:55 am for 20,612,308 at a value of  $76,677,786


----------



## Nicks (9 March 2006)

Thanks Ann

Guess the underlying point still remains the same. 

The TREES conversion does not take effect until 18 April 2006.


----------



## Ann (14 March 2006)

savtin said:
			
		

> My opinion is that it is a broker who is doing an internal transfer for Tax loss purposes....just my hunch. We will find out in a few days when and if a company lodges an increase or decrease in holdings. Remember if it is an internal thing there won't be a lodgement.




Well I guess you were right Savtin. Still no announcement of a change of holding. 

What a diddle if you are one to be excited by volume spikes.


----------



## TheAnalyst (19 March 2006)

The stock seems to be holding steady....noticed the stock has a per of just over 9 now and should start heading up to a 10-11 soon or slowly and the tree conversion accounts for approximatly 4% dilution of the shares if completly taken up but then GTP keeps the csah and goes from debt to an equity account.


Check out part of my new assignment for uni in regards to the new IFRS's and let me know what you think


* Bank Income & Balance Sheet Volatility*
Firstly, why would the Chief Financial Officers at some of Australia’s biggest banks (and remember it is only some and Australia only has four big banks) warn of greater volatility of earnings in financial reports for banks due to new International Financial Reporting Standards taking effect?

As of January 1 2006  most of Australia’ reportable entities will deliver  their interim financial reports and mostly on the Australian Stock Exchange via compulsory ASX listing rules or face suspension from quotation on the actual market.

Companies will be required to report their financial reports under the new IFRS via the new and adopted Australian Accounting Standard Board (AASB) adoption of I FRS’s, for banks this means the adoption of the new specific AASB 130 “Disclosures in the Financial Statements of Banks and Similar Financial institutions” or the equivalent International Accounting Standard (IAS) 30 and superseding of old AASB 1032 as well as AASB 130 taking precedence over AASB 132 Financial Instruments: Presentation in regards to banks.

The new AASB 130 now instructs banks and similar financial institutions new ways that they must present contingencies (allowances made for expected losses although they have not actually happened) and loan write offs in the company accounts, these affect the balance sheet and the statement of performance differently than under AASB 1032 and more so with the change over to IFRS’s.

Under old AASB 1032 the estimated, probable and historical identification of losses in regards to loans and advances was put through as an expense in the performance statement and deducted from the appropriate assets and put into a provision account (old AASB 1032 S7.2.1) However under new AASB 130 the estimated, probable and historical identification of losses in regards to loans and advances is to be adjusted and recognized as retained earnings appropriations account as well as the excess over  the estimated, probable and historical identification of losses in regards to loans and advances for the period accounted for and to be credited to retained earnings accounts. It is only when it can be fully determined legally that the write offs of loans and advances can be expensed through the statement of performance. (New AASB 130 S43-S49)


In regards to the volatility of the balance and performance statements of banks this means that once a bank or similar financial institution changes over to the new IFRS’s it will have to expropriate the old AASB regime accounts of what was actually expensed to performance if any at the time and post it to the retained earnings account as a deduction if it did not match the legal requirement to be written off and expensed and to now only expense legally titled written off debts to the performance  statement.
Dividend Percentage

Firstly let us clear up the matter of the dividend being a percentage of the net profit payout as compared to the payout being a percentage of the underlying cash earnings. Usually a company has its dividend published as a percentage of its net profit in the Statement of Performance which is an accrual accounting based report, but if a company was to use the Cashflow Statement this may make things a little more complicated as AASB 107 using the direct method format for the cash flow statement which the majority of ASX listed companies use reports cash flow from operating activities, investing activities and finance activities and discloses the total net increase/decrease in cash.

Reporting the dividend as a percentage of the net increase/decrease in cash could actually distort this payout percentage as companies use the accrual method for the actual net profit reporting and using all three subheadings from the cash flow would not present a true picture as financing and investing activities would not be the usual cash increases/decreases that make a company’s usual earnings, cash flows from operating activities are and due to the accrual method this cash flow would not present all the operating revenues and expenses for that accounting period.


----------



## michael_selway (20 March 2006)

Omg they increased forecasts big time today 2007 & 2008, on Comsec! DPS the same however

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.2 58.1 63.8 
DPS 14.0 14.0 19.0 18.0 

EPS(c) PE Growth 
Year Ending 30-06-06 46.2 8.3 10.8% 
Year Ending 30-06-07 58.1 6.6 25.8% 

Before it was

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.2 54.2 58.7 
DPS 14.0 14.0 19.0 18.0


----------



## abucs (20 March 2006)

Hi Michael,

it was only a little while ago that they changed their figures as well.
i wonder if they did their sums wrong or there has been any extra information that has come to light ?

I'm not familiar where commsec gets it's forecasts, but with CBA being a major shareholder, you'd think commsec would be in the know.


----------



## michael_selway (20 March 2006)

abucs said:
			
		

> Hi Michael,
> 
> it was only a little while ago that they changed their figures as well.
> i wonder if they did their sums wrong or there has been any extra information that has come to light ?
> ...




Hi "they changed their figures as well"

Which figures are u refering to?

thx

MS


----------



## abucs (20 March 2006)

Comsec's EPS figures / forecasts for 2007 / 2008.


----------



## abucs (22 March 2006)

More days like today please.


----------



## Julia (22 March 2006)

abucs said:
			
		

> More days like today please.




Yes, indeed.  Sold 5000 at 4.04.  Stil hold 15,300.
Bought end of 2001 at  54 cents.

Julia


----------



## abucs (22 March 2006)

Well done Julia.  You were obviously 'on the ball' at 54c.

Here's hoping you get an even better price for the remaining 15,300 shares.


----------



## TheAnalyst (22 March 2006)

Go GTP go.....keep increasing those sales above market expectations.....shock those analysts.........take em by surprise........$5 here we come.....


----------



## TheAnalyst (24 March 2006)

Anyone know what the price sensitive news on GTP is??


----------



## Ann (24 March 2006)

Hello The Analyst,

It is GTP's ex divie day today. Would that be what you wanted to know?


----------



## michael_selway (24 March 2006)

Ann said:
			
		

> Hello The Analyst,
> 
> It is GTP's ex divie day today. Would that be what you wanted to know?




usually ex div day, people stick to plan and ignore "other news"


----------



## Julia (24 March 2006)

Hello Analyst,

Why do you think there was a price sensitive announcement?
SP is up 2 cents which is pretty OK for ex-div day.  Last announcement was 7.3.06.

Julia


----------



## TheAnalyst (24 March 2006)

Sorry people...on my online broker stock quote screen there was a symbol representing price sensitive info and i was looking everywhere for the info but realise it was ex-div.

Thx guys/gals

Go GTP Go......$5 here we come!!!!!!


----------



## abucs (24 March 2006)

There seems to be some big buy orders (by single bidders) at the moment.
The reverse has been true recently but the stock was still was going up.

I think it is a good sign that there are significant buyers about especially with the stock 'holding it's recently increased price' with the ex-dividend announcement today.

I'm not one for trends but it looks good to my amateur eye.

Has GTP stopped it's wild swings this way and that, or is it about to go again on further news ?


----------



## TheAnalyst (24 March 2006)

Its only 3 months and 1 week away from the end of the financial year......and looking like a strong second half and to beat sales expectations and to continue on for a number of years.

Its a wonder they havent got into turkeys and salmon/trout farming yet...


----------



## abucs (24 March 2006)

Sugar cane and bananas ??


----------



## TheAnalyst (24 March 2006)

even buying up all the wheat, barley, farms from farmers and just re contract the farmers to harvest and manage it as well......there is a superannuation fund doing just that at the moment......can you see where this is all going????


----------



## michael_selway (25 March 2006)

michael_selway said:
			
		

> usually ex div day, people stick to plan and ignore "other news"




whoops it broke the generalisation!

something good is coming i suspect

thx

MS


----------



## pch (25 March 2006)

Seems to me that agribusinesses and (cashed up supermarket chains) would be eyeing off wineries and all that great land/soil at present while they are at he bottom of a cyclical downturn..  

Certainly would be some great longer term assets in the long term..


----------



## TheAnalyst (25 March 2006)

The supermarkets have already been involved for a while and do hold crop land for their own brand products already.

I do not know at this stage if this is really a good thing unless of course you are an investor.


----------



## bunyip (25 March 2006)

Everyone is smiling now that you're all making money on GTP. 
The reason you're making money is simply because the chart is heading towards the top right corner of your computer screens.
We should all put a white dot in the top right corner of our screens.
Then we should print out these words....IF ITS NOT HEADING TOWARDS THE WHITE DOT I WON'T BUY IT.
Having printed out these 12 words, we should keep them beside our computers and read them at least once a day.

Reading through the posts on this forum, so often I see people buying a stock that's heading south or south east on the chart. They need it to head north east if they're to make any money, yet they buy it when its heading in the wrong direction. 
Its a bit like someone wanting to hitch hike from Sydney to Brisbane, but instead of hitching a ride with cars travelling north, he hitches with the cars heading south - then wonders why he's not getting closer to his intended destination.

Australian marathon swimmer Suzie Maroney broke the world record by swimming further faster than anoyne had ever swum before.
She didn't do it in a meandering outback creek.
She chose Australia's largest river, the Murray, when it was in flood. She and her support team drove up near the headwaters of the Murray and she dived in and swam with the current. By using the current of the powerfully flowing river to sweep her along, she easily set a new world record.

As traders of the stockmarket can learn a lot from Suzie Maroney. We can find outselves a powerfully flowing river (a strongly uptrending stock that's heading towards that white dot in the top right corner of our screens), and we can dive into it and let ourselves be swept along by the current (the momentum of the stock).
If it stops flowing in the right direction (stops uptrending), we can climb out of the water (close our position) and look for the next flooded river (strongly trending stock) to dive into.

GTP is in a nice uptrend - on both daily and weekly charts the 20 period EMA is heading for the top right corner of our screens.
As long as the 20 EMA keep heading north east, the stock can be held, and added to on the dips.

But some of you will make some nice gains, only to see them melt away because you hang on after the uptrend runs out of steam.

At any given time there are strongly trending stocks in the market. We can greatly enhance our trading returns by trading only in these strong trenders.
GTP at present is a good example of this.

Bunyip


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## Julia (25 March 2006)

Bunyip

The Suzie Moroney story is a great analogy.
What I always find difficult is appreciating the end of an uptrend.  For those of us with only a minimal understanding of TA, would you say the use of a trailing stop loss is a reasonable device for exit?

Cheers
Julia


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## GreatPig (25 March 2006)

Julia,



			
				Julia said:
			
		

> What I always find difficult is appreciating the end of an uptrend.



That can indeed be a difficult thing to appreciate.

I think it depends on your definition of a trend over the time frame you're considering. A long term investor's small correction might well be a short term trader's end of trend.

IMO, you first need to decide what you consider a trend for the stock you've purchased and your strategy. You then need to decide what you would consider the end of that trend. Numerous ways could then be used to indicate it.

For example, you might use a trend line with a certain amount of movement to the right or below the line signalling the end, or you might use a moving average with a cross below the MA signalling the end, or you might use two moving averages with a crossover signalling the end. A trailing stop is another possibility. With MAs and trailing stops though, you still need to decide what parameters to use with them, and it's likely that different parameters would best suit different stocks due to the differences in volatility (especially for short term systems). You might also decide to look for multiple conditions, for example: a cross below a trend line or MA and then either another few closes below the line or a certain percentage drop below the line, whichever came first.

And for a longer-term system, you might decide to base it on a weekly or even monthly chart rather than daily.

Whatever you choose though, there will always be cases where you get out too early, and the stock will turn back up minutes later and surge to new highs without you . However, it's ultimately the overall profitability that counts, and getting out of a few too early is likely better than staying in many more for too long. If one does take off again, you can always buy back in (which of course leads to the opposite question of how to appreciate when a trend's starting or is continuing ).



> would you say the use of a trailing stop loss is a reasonable device for exit



A trailing stop can be an excellent device for exit, but it may not suit a particular stock or your particular strategy. And, as I mentioned, you need to decide on what parameters it should use. Too tight and you're dumped too quick, too loose and you lose too much before it's triggered. That's why some trailing stops are based on some measure of volatility (eg. Average True Range and Guppy count back), but even then, volatility can have spikes that will kick you out anyway.

All IMHO of course 

Cheers,
GP


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## bunyip (25 March 2006)

Hi Julia

Trailing stops are my preferred exit strategy for a trend trading approach.
In their book 'Computer Analysis Of The Futures Market', authors Lucas and Le Beau discussed a number of exit strategies, but stated that they were yet to find a better exit strategy than a trailing stop. Their findings are applicable not only to futures, but also to stocks and indeed any freely traded market.

If we plan on adopting a trailing stop exit strategy, then we need to decide where/how we'll trail it.
The obvious place to trail the stop is just below the levels which, if breached, will indicate that the trend is finished.
We've all heard that 'the trend is your friend'. Therefore we need to be able to recognise our friend when we see him.
The definition of an uptrend is 'progressively higher peaks and troughs'.  
As an example of peaks and troughs we can look at the daily chart of NCM and see a peak on 29/11 followed by a trough on 1/12, the next peak was on 12/12 and was followed by the trough on 16/12, and so on as the trend progressed.
The way to trail the stop was to move it to just below the trough of 1/12, but only after the preceding trough on 29/11 was taken out. The next level for the trailing stop was just under the trough of 16/12, but only after the preceding peak on 12/12 was taken out. 
The significance of these troughs is that if price falls below them, it indicates that the trend is probably finished, at least for the time being. By trailing our stop just below the levels identified by these troughs, we're automatically taken out of the trade when the trend changes.

Another issue with trailing stops is that we need to decide on our time frame. A daily chart can form peaks and troughs at different levels to the peaks and troughs on a weekly chart. The choice of time frame depends on your objective for the trade. I remember something Ivan Krastins (author of 'Listen To The Market') said about timeframes at one of his workshops years ago......"If you want to ride big trends for big profits, you have to go to a longer time frame." 
A longer time frame from Ivan's viewpoint was weekly charts.
By trailing your stop according to the peaks and troughs on a weekly chart, you'll stay in trades longer with the result that you'll have less trades over the course of a year, but your profits per trade will tend to be quite large. (assuming that you manage to get aboard some trades that turn out to be big, prolonged trenders).
On the other hand, if you're more inclined towards smaller profits that occur more often, you might want to trail your stop according to the peaks and troughs on a daily chart. 

Since a trailing stop is designed to help you ride the trend in your chosen time frame, it stands to reason that this strategy is best suited to stocks that tend to trend in a relatively stable manner. Penny stocks that fluctuate wildly are not suited to a trailing stop strategy.

Cheers
Bunyip


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## Julia (25 March 2006)

Great Pig and Bunyip

Thank you both for comprehensive and useful responses - much appreciated.

You've both pretty much confirmed my present approach which treats stocks such as GTP quite differently from, say, ANZ.

This is why I get just a bit irritated when various people advocate any given method of managing stocks as the be all and end all, regardless of the individual characteristics of  particular stocks

Julia


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## Julia (25 March 2006)

Great Pig and Bunyip

Thank you both for comprehensive and useful responses - much appreciated.

You've both pretty much confirmed my present approach which treats stocks such as GTP quite differently from, say, ANZ.

This is why I get just a bit irritated when various people advocate any given method of managing stocks as the be all and end all, regardless of the individual characteristics of  particular stocks, and the differing reasons for buying them in the first place.  I might buy an archetypal blue chip with the intention of holding it for many years.  In this case obviously I'm not going to be jumping out every time there is a correction which on a shorter time frame would represent a clear exit.  But, as you have both said, if I buy a stock where the expectation is a short term gain, then the minor correction becomes a clear exit.

Thanks for your input.

Julia


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## TheAnalyst (26 March 2006)

Very nice pig and bunyip appreciate your time and great comments on this thread


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## bunyip (26 March 2006)

Hi Julia

You're welcome - its good to see your willingness to ask questions and learn.
Its interesting to see the reactions when you come on a forum and try to help people. An odd one gets his nose out of joint and tells you to go stick your advice, but fortunately there are others like yourself who appreciate that someone is taking the time and trouble to try and help them.

Talking of exit strategies based on trailing stops, another simple way is to use a 20 period EMA. In your chosen time frame you can trail your stop on the 20 EMA until you're stopped out. Or you can move your stop up to just under any bar that penetrates below the 20 EMA.
This strategy worked very well on a weekly chart during the big uptrend in GTP in 2003/04
Every time the weekly chart retraced to near or below the 20 week EMA, you could have moved your stop to 2% below the bottom of that retracement. In this case you would have captured huge gains of hundreds of percent in two years.
The 20 EMA is not only useful as trailing stop/exit system either - it can also have useful application as an entry setup. The GTP weekly chart shows pullbacks in May and September 04 that culminated in Hammers. The long lower tails of the Hammers showed a rejection of lower prices and suggested that higher prices would follow.
These were suitable signals to enter the trend if you were not already aboard, or to add to your existing position.
These candlestick reversal patterns were particularly significant because they occured in the vicinity of the 20 week EMA. The 20 EMA is followed by many technical traders who know that prices frequently turn at or near that level. Linda Bradford-Raschke and Larry Connors wrote about this phenomenon in their book "Street Smarts". Alex Elder talks about it in his book "Come Into My Trading Room".
In fact you can design an entire technical trading system based entirely on the 20 EMA in your chosen time frame. Once a new uptrend begins, prices rise above the 20 EMA and tend to stay above it for the duration of the trend (in that particular timeframe). 
Your entry setup can be any retracement that pulls back to or near the 20 EMA, then puts in a bullish candle. You can buy above the bullish candle and put a stop under the same candle, or under the low that preceded it. You can trail your stop on the 20 EMA until stopped out. Alternatively you can trail your stop below any pullback that breaches the 20 EMA.
A lot of retracements don't reach the 20 EMA, but if you follow enough stocks you can find plenty that do. In the 1000 US stocks I follow, virtually every day there are a number of stocks that pull back near the 20 EMA, then put in a bullish candle.
If you put this system over a few years of GTP on a daily chart, you can see lots of examples where it would have enabled you to take handy bites out of trending moves.

Getting back to trailing stops for exits.....Some of the best information can be found in Stan Weinstein's book "Secrets For Profiting In Bull And Bear Markets". Stan outlines two methods of trailing your stops - one for investors, and a slightly different one for traders. An entire chapter of his book contains more than 50 pages on this subject.
Its well woth reading - you can buy it from moneybags.com.au

Cheers
Bunyip


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## bunyip (26 March 2006)

TheAnalyst said:
			
		

> Very nice pig and bunyip appreciate your time and great comments on this thread




Analyst.....No problem - thanks for your positive feedback.
Over the last 10 years I've had a lot of help from some very knowledgable traders.
Sharing whatever knowledge I've aquired is my way of giving something back.

Cheers
Bunyip


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## GreatPig (26 March 2006)

Julia,

I think charting software that easily let's you see the effect of different parameters is very worthwhile for this sort of thing.

Take for example ANZ and assume you were fortunate enough to buy near the dip in Feb 2000. Where, if anywhere, would have been a good exit?

Since ANZ is now about as high as it's ever been, then never getting out would quite possibly have been the best long-term solution, assuming you weren't interested in trying to scalp ever little up and down along the way. But during the intermediate down trend that started in June 2002, after which it never really took off again until late 2004, you could not have known how low it would go or if it would ever recover (although being one of the big banks, you might have decided to risk it for that reason alone). 

Say you'd decided to use weekly charts and an ATR trailing stop based on 21 bars (generally ATR stops are not too sensitive to the time period if the stock is not too volatile). A good fit in hindsight might give a multiplier of around 2.5 (typically expressed as 2.5 x ATR(21)). This would look like this:







However, that would have kicked you out twice en-route to the intermediate downtrend, once in early 2001 and again in late 2001. Once the uptrend resumed properly in mid-2004 though, you wouldn't have been kicked out again (although it might depend on exactly when you bought and the trailing stop started):






If, on the other hand, you'd selected a wider multiplier of say 4, then you'd have got this:






That wouldn't have taken you out until really into the intermediate downtrend, and ultimately at around the same price as before since the exit is on the same bar in both cases, but your risk would have been higher along the way. If the dips in early or late 2001 had continued down, you would have been out at lower prices than with the tighter stop.

Anyway, by fiddling with the parameters in the charting software, you can see the effect on the chart of different settings, and come up with what looks best for the most recent period and volatility. And once you have the parameters set, you can easily see exactly what price you'll be out at on any bar (ignoring gaps or plunges through your stop) and thus calculate what your profit would be if stopped out on any bar. Note though that you won't always be able to exit at _exactly_ your stop price, as it will depend on the prices at the moment you decide to place the trade. 

_[Edit: hmm... I probably should have used GTP as the example. Forgot this was a GTP thread ]_

Cheers,
GP

[The above charts were taken from AmiBroker using my stops plugin]


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## TheAnalyst (26 March 2006)

would like to see a GTP one pig if not too much hassle but also like your ANZ demo as well.


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## Julia (26 March 2006)

GP and Bunyip

I do appreciate your efforts to encourage me to be more technically enlightened.

To follow both of your suggestions, presumably one would need software.

Most of my portfolio constitutes long term investments which have over the years produced steady growth and reliable dividends with 100% franking.
Barring some drastic fundamental news on, say, the big banks, I am happy to  just go with the ups and downs of the market.  I like Buffet's maxim of "buy stocks you will never want to sell" though can't believe he would have meant that to be taken absolutely literally.

I suppose it could be an element of laziness on my part, but I do believe that, given a portfolio of mostly good quality well managed companies,
"time in the market" often in the end may win over "timing the market", even if one is only paying minimal brokerage.  There's also the additional paperwork and accounting fees to consider.  

GTP is one of only three stocks in my portfolio for which I really look for technical opinions - such as you both have offered - so I have some doubts about how much I would actually use sophisticated tech software.
Am I being a luddite in this?  Quite possibly.  

GP I know you almost never refer to fundamentals.  Bunyip, does the same apply to you, or do you take consideration of fundamentals in the decisions you make?

Just in case anyone is still feeling generous and prepared to look at another couple, some technical comments about FWD and CGF would be much appreciated.

Thanks indeed to you both for your time and interest.

Julia


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## pch (26 March 2006)

Hi Julia

Interesting perspective.. I am virtually the same as you.. held TIM (and TIMPA) since 50 odd cents and got GTP at just over $1. But when GTP dropped signficantly, I was never concerned because after redoing the valuations I still felt that even with the most conservative assumptions the stock was worth $4.20 (this is back when it was at $3 so I bought more GTP at that stage).

I also accumulate and I've never used TA, purely because my mentor went all Buffet on me (he used to use TA) and FA is relatively easy in Excel..

So Julia, why did GTP make you look for technical indicators? 

regards

(TA guys, don't interpret this as anti TA as I'm not qualified to comment on TA).


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## GreatPig (26 March 2006)

Julia,



			
				Julia said:
			
		

> To follow both of your suggestions, presumably one would need software.



It would be easier to have charting software, but you could probably use formula in Excel for a stop loss if you didn't make the calculation too complex. I'm not very familiar with the abilities of Excel though, as I only use its most basic functions.



> Most of my portfolio constitutes long term investments which have over the years produced steady growth and reliable dividends with 100% franking.



If that's a strategy you're happy with, then I think that's fine. In the end it's whatever return you're happy with for the amount of effort you're prepared to put into it.

Cheers,
GP


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## bunyip (26 March 2006)

Julia

If you have an investment style that's producing the results you want, then you should stick with it.

Yes, you need charting software to do the sort of technical analysis that pig and I have told you about. 

Regarding the fundamentals, the Bunyip and the Pig are in the same pen.....we let the charts do the talking. Its not that I don't consider the fundamentals to be important, its just that I believe that everything known and considered important about the fundamentals is reflected in the trend of the stock.
Strong downtrender? My view is that the fundamentalsits know something negative about the company, and they're dumping the stock and forcing it lower.
Strong uptrender? My view is that the fundamentalsists have uncovered some positive info about the company, and as a result they're so keen to buy it that they're willing to pay increasingly higher prices just to get a slice of the action.
Sideways trend? Clearly the fundamentals are neither good nor bad, with the result that there's a general lack of interest in the stock.

I guess you could say that trend analysis is the lazy trader's way of doing fundamental analysis.
Take FWD for example.....the ferocious downtrend tells me that investors and traders are so keen to dump this stock that they're accepting increasingly lower prices just to get out of it. Why would so many people be stampeding for the exit gate? The most likely reason is that the fundamentals aren't too flash. 
Now maybe, just maybe this might be one of those stocks that are fundamentally sound, but have been hit hard regardless. But I'll stick with my theory that in most cases a stock will be strongly downtrending because of poor fundamentals. And I reckon I'll be right more times than wrong.
In September 2001 FWD was $1.25, and a little over three years later it had risen to more than $9.50. Some investors must have made huge gains from such a big uptrend, and I can understand how they'd fall in love with a stock like that. But the simple fact is that when the party is over the party is over.
The FDW party ended in late 2004/early 2005 when the weekly trend fell decisively below the 20 week EMA, and the stock began making progressively lower peaks and troughs.
Hang on to it after that time and you'd see your big gains start melting away. Buy it after it starts downtrending and you greatly increase your chances of losing money as the downtrend continues longer than you expected, which is what downtrends usually do.
The current technical picture of FDW is that its a 'south easter', i.e. it's chart is heading south east towards the bottom right corner of our screens.
Because I believe the fundamentals to be crook (based on my observation of the trend) I would not in my wildest imagination consider buying it.
If it starts uptrending, different story. A new uptrend would suggest that the fundamentals have changed and investors, knowing this, are buying up the stock and pushing it higher. In which case it would certainly warrant my attention as a possible buy, IF the right chart pattern showed up.

If you already hold this stock, only you can decide if you're willing to sit through the current downtrend in the hope that one day it will come back up. For your sake I hope it's value won't be decimated before it starts heading north east once more.....if it ever does head north east again. (it may not)

CGF? Another south easter. Weekly chart has broken decisively below the 20 week EMA, daily chart is heading south at a rate of knots and is making progressively lower peaks and troughs....a clear downtrend.
As with FDW, my feeling is that its downtrending because people are dumping it on account of it's unsatisfactory fundamentals. Again, I'll concede that it could be a fundamentally sound stock that's been hit unduly hard. But I wouldn't count on it. I'll go with my 'fundamentally unsound' theory on account of what the trend is telling me. And on that basis, no way would I even think of buying this stock at present.
If you hold it, well, once again you have to decide how much pain you can bear, how far it must fall before you decide you're on a sinking ship, and you head for the life raft.
That's another reason you should read Weinstein's book......he deals with this exact problem of falling in love with a stock that's treated you kindly in the past, so you hang on to it even after clear evidence that the party is over and yesterdays's wonder stock has become today's disaster story.
He outlines specific strategies for dealing with this situation without losing your shirt in the process.

Cheers
Bunyip


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## TheAnalyst (26 March 2006)

Below is the PEG calculation as Micheal Selway is up to date with the EPS forecast for GTP i ask him kindly if he would like to do the PEG calculation for us as i am very tired from reading all the new IFRS's which is the new AASB's all week end.

thx


Question:

Could you explain the idea behind the PEG ratio?

Answer:

The idea of the PEG ratio is that a fair value for a stock is when its rate of growth in earnings per share is about the same as its PE ratio. The example on my web site shows how you make the calculation.

If the fair value is 1, then it follows that when the PEG ratio is greater than 1 (PE ratio is greater than EPS growth), then the market is paying too much for the stock and it is therefore too expensive.

Likewise, if the PEG ratio is less than 1 (PE ratio is less than EPS growth), then the market is underpricing the stock and it is therefore cheap.

You can not rely on the PEG ratio entirely. It is simply a filter to get a short list of stocks for further research. Always remember that a stock could be cheap because the market does not expect it to reproduce the last profits in the future.

There is quite a lot on the Internet about it. Put PEG+ratio into any decent search engine.



Question:

What is the PEG ratio and how is it interpreted?

Answer:

The PEG ratio stands for Price Earnings Growth.

It is a measure of whether a stock represents growth at a reasonable price.

The formula is PEG = PE / EPS growth

PE = the Price Earnings Ratio

PE = Price / EPS times

EPS Growth = Earnings Per Share Growth%.

EPS growth is normally = (Latest EPS - Previous EPS) / Previous EPS x 100

Some people prefer to use the average EPS growth for the last three years to even out big fluctuations.

It could also be calcualted using estimated EPS, but that is only as good as the estimator's skill.

Example:

Latest price $8.00

Latest year's EPS = 50c

Previous year EPS = 40%

EPS growth = (50 - 40) / 40 X 100 = 25%

PE = 800 / 50 = 16 times

PEG = 16 / 25 = .64

To interpret the PEG ratio:

1.0 = fair value

>1.0 = expensive

<;1.0 = cheap


Question:

In your answer about the PEG ratio, could you explain what the example EPS Growth = (50-40) / 40 X 100 = 25% is doing?

Answer:

All we are doing here is calculating the rate of EPS growth as a percentage.

If last year's EPS was 40c and this year's EPS was 50c, then you should be able to see without the equation that EPS is up by 10c, which is up by one quarter, which is 25%.

However, it is not always that easy to see, so we have to calculate the EPS growth.

The first part of the equation is (50 - 40) = 10, which is how much EPS have gone up (what they are this year minus what they were last year).

However, the naked figure is not of any use. We must know what it is relatively. So, we take the increase divided by the starting value (10/40) which is one quarter or 0.25. As a percentage, it is 0.25 multiplied by 100 = 25%.


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## GreatPig (26 March 2006)

TheAnalyst said:
			
		

> would like to see a GTP one



Using the same 2.5 x ATR(21), if you'd bought near the bottom in early 2003 you would have been kicked out during the consolidation period in late 2003, but otherwise it would have gone very nicely, with a final exit around $4.35.

Applying the same trailing stop to the current period looks okay except that it starts quite far from the prices. If it had started falling from the moment of purchase, the exit would have been at $2.22, a drop of about 27% from a purchase price of $3.05. Even at the most recent bar, the stop of $3.41 is a drop of about 16%.

Mind you, with the first one bought in early 2003 the stop started about 19% below prices too. As this constitutes loss of initial capital (as opposed to profits), it may be preferable to use a different value for initial stop that is closer to prices and switch to trailing stop as prices rise.

Remember though that this is only one type of stop based on ATR. Other forms may be more appropriate to other stocks (or even this one).

Cheers,
GP


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## GreatPig (26 March 2006)

Hey... that was my 1000th post!

Just call me Millenium Man 

(yeah, I know... I'm not the first...)

GP


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## michael_selway (26 March 2006)

GreatPig said:
			
		

> Using the same 2.5 x ATR(21), if you'd bought near the bottom in early 2003 you would have been kicked out during the consolidation period in late 2003, but otherwise it would have gone very nicely, with a final exit around $4.35.
> 
> Applying the same trailing stop to the current period looks okay except that it starts quite far from the prices. If it had started falling from the moment of purchase, the exit would have been at $2.22, a drop of about 27% from a purchase price of $3.05. Even at the most recent bar, the stop of $3.41 is a drop of about 16%.
> 
> ...




Hi GP, thansk for the charts

Btw based on TA, what do u think the price of GTP is likely to head to given that it broke the $4 barrier recently?

thx

MS


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## bunyip (26 March 2006)

On hundreds of occasions over the last ten years I've seen brokers put 'buy' recommendations on stocks because at current levels they were 'fair value'. 
Only problem was that 'fair value' became even fairer value a few weeks or months later as the stock fell further, sometimes a lot further.
Sometimes the brokers declared a stock 'currently undervalued' -  yet the stock continued getting cheaper.
An estimation of fair value is quite useless if the market disagress with the valuation.....which it frequently does.

Herein lies the main difference between the technical approach and the fundamental approach.............. 

The fundamentalist deals in theories....he uses various fundamental studies, including estimated fair value, in an effort to find stocks that should (at least in theory ) go up at some time in the future.

The technician deals in facts.....he doesn't concern himself with looking for stocks might go up in the future - he focuses on finding those that are going up right now.

Bunyip


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## Julia (26 March 2006)

pch said:
			
		

> Hi Julia
> 
> Interesting perspective.. I am virtually the same as you.. held TIM (and TIMPA) since 50 odd cents and got GTP at just over $1. But when GTP dropped signficantly, I was never concerned because after redoing the valuations I still felt that even with the most conservative assumptions the stock was worth $4.20 (this is back when it was at $3 so I bought more GTP at that stage).
> 
> ...




Hello pch

The reason I sought technical input on GTP was the erratic nature of the SP over the last few months.  It traded sideways for a while, had a small run up, down again, sideways etc etc.  One noticeable feature was that it tended to put on several cents when there was a downturn in the market in general.
This could be no more than coincidence.

Probably my imprecise remarks above are irritating to TA people who will express what they observe in the charts much more clearly.  Sorry.

My portfolio is somewhat overweight in GTP so I want to sell some.    As I said earlier in this thread, I sold 5000 at 4.04 .  I would like to sell a further 10,000 and will hold for $5 unless  it all falls apart before then.  Traditionally the stock rises in May/June as more investors buy into the Trees MIS schemes for their tax deductibility before the end of the financial year.
Fundamentals show GTP to be a sound company which has had to weather the past problems of government changing the rules regarding managed investment schemes' tax deductibility.  Once an idea of uncertainty re tax considerations has anchored itself in potential investors' minds, it takes a while to be reversed after government has offered reassurance of the ongoing tax deductibility.  

I'm also less than convinced as to the viability of the sort of diversification GTP has engaged in - grapes and olives etc.  Even the subliminal awareness of the present grape glut will tend to register in investor's minds as "why are they doing this?"  GTP's response to that is that by the time their vines are ready for harvest there will once again be a shortage of wine grapes.
We will see.

Julia
(


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## Julia (26 March 2006)

bunyip said:
			
		

> Julia
> 
> If you have an investment style that's producing the results you want, then you should stick with it.
> 
> ...




Bunyip

Many thanks.  The technical picture you describe supports my own views about both of these.  FWD is quite interesting.  There are three brokers with a Buy recommendation on this stock.  There have been some problems, I gather, in the business in the past year, which are now deemed to be resolved and analysts are declaring the future looks very rosy.  But, as you have observed, the market is yet to be convinced.  (And so am I!)
I was foolish enough to buy this on the recommendation of one of the major brokers without doing much research on the company myself.  It has just gone ex dividend so it gets another week or two of latitude before it is for the chop.  Plenty of other better opportunities out there.

CGF's descent I think probably reflects some uncertainty about current management.
Again, as you suggest, the SP reflects the market's feelings.

Joe, I don't know if you are reading this, but if you are, then I'd like to say that the responses I've received to my TA queries on this thread, offer justification (if any were needed) to you for keeping ASF going.  

To me this genuine exchange of views with the aim of being helpful and constructive is why I value ASF. 

Thanks again, especially GP and Bunyip.

Julia


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## Julia (26 March 2006)

GreatPig said:
			
		

> Hey... that was my 1000th post!
> 
> Just call me Millenium Man
> 
> ...




Congratulations, GP.  And even better, the content was worth reading!

Julia


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## GreatPig (27 March 2006)

michael_selway said:
			
		

> Btw based on TA, what do u think the price of GTP is likely to head to given that it broke the $4 barrier recently?



Well to TA, the $4 barrier doesn't mean anything. That's just a psychological level of interest to humans only.

Some TA patterns and techniques have measured moves where a target price can be indicated, but my current technique for GTP is just based on a short-term trend line for my own visual inspection, and the EMA combination used by my system in AmiBroker. Neither give any indication of target prices, so I would normally just follow until an exit is indicated, wherever that may end up being.

However, as I'm off to Japan for a couple of weeks odd on Friday, I may end up selling most of my trading stocks before I leave - or at least reducing my exposure.

GP


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## RichKid (27 March 2006)

GreatPig said:
			
		

> Hey... that was my 1000th post!
> 
> Just call me Millenium Man
> 
> ...




Great work there GP! I've really enjoyed reading your posts and discussing issues with you, hope to be reading your 10,000th post too!

Nice trailing stop there, I don't use ATR but should look at it closely as I've been shaken out of a few, it might help me with assessing the best position size and entry price to ensure my stop measures up to the volatility. 

All the best!


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## pch (27 March 2006)

Julia said:
			
		

> Hello pch
> Fundamentals show GTP to be a sound company which has had to weather the past problems of government changing the rules regarding managed investment schemes' tax deductibility.  Once an idea of uncertainty re tax considerations has anchored itself in potential investors' minds, it takes a while to be reversed after government has offered reassurance of the ongoing tax deductibility.
> 
> I'm also less than convinced as to the viability of the sort of diversification GTP has engaged in - grapes and olives etc.  Even the subliminal awareness of the present grape glut will tend to register in investor's minds as "why are they doing this?"  GTP's response to that is that by the time their vines are ready for harvest there will once again be a shortage of wine grapes.
> ...




Bang on the money on both counts.. Add to that the income tax thresholds changing making the tax benefits less attractive than previously and the threat of being charged a lot more for water use.. But the fact that they *own* the land they develop on, and are probably a couple financial years off being able to issue much less debt to fund land aquisition through harvestring and reuse, makes me feel okay about them..


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## bunyip (27 March 2006)

Hi Julia

It doesn't surprise me that three brokers are recommending a downtrending stock......they're good at doing that sort of thing! I wonder if they're recommending any uptrending stocks??? 
Brokers are crooks in my opinion - they're not above blatant dishonesty if the occasion requires it. I know this for a fact, having spoken to a couple of former brokers who gave me the inside story about what goes on in the broking world.
For example, an institutional client is holding a large block of stock in a company that's going through a tough patch, and it's share price is suffering accordingly.
The insto contacts the broking firm and says "Listen - we're holding all these shares in this company and we want to get out of them, but not at these prices. How about talking the company up for us so we can quit our holdings at a better price".
The broking firm says "No problem, leave it to us". They slap a buy recommendation on the stock and make up some rosy story about the company's future prospects.
Then they email it to thousands of their clients, many of whom swallow the bait and race in and buy the stock. Up it goes for a few days or maybe a week or more until the insto, with a big smile on it's face, dumps it's position and forces the price down again.
Its a win win situation for the broking firm......they pick up a bunch of nice commissions and they're even made to look good by the fact that the share price did actually rise, even though the rise was probably too small and too short-lived to enable many of their clients to profit from it.

Another thing that former brokers have told me is that employees within broking firms are instructed by their firm with regard to what recommendations to make. The employee can find himself in a situation of being forced to give a buy recommendation that he personally disagrees with.

A speaker at an ATAA meeting once claimed that National Australia Bank pays several million dollars a year to a particular broking firm to say positive things about NAB.
I had no way of knowing whether or not this was true, however one of the former brokers I spoke to confirmed that this sort of bribery does in fact go on between brokers and corporations.
Anyway, the long and short of it is that you can't rely on brokers to give you honest or intelligent recommendations. I'd trust a funnelweb spider in my sleeping bag before I'd trust a broker!

As a fundamentalist yourself Julia, you can adopt three simple technical rules that will greatly increase the effectiveness of your fundamentally based buy decisions, while at the same time steering you clear of dodgy calls from incompetent and/or dishonest brokers. Regardless of how great the fundamenatls look, the three rules you should never deviate from are......
1. If its drifting sideways on the chart, I'm not touching it.
2. If its heading south east on the chart, I'm not touching it.
3. If its heading north east on the chart, I'll consider buying it if the fundamentals stack up OK.

Cheers
Bunyip


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## Ann (27 March 2006)

michael_selway said:
			
		

> Hi GP, thansk for the charts
> 
> Btw based on TA, what do u think the price of GTP is likely to head to given that it broke the $4 barrier recently?
> 
> ...




Hi Michael,

Forgive me butting in but may I offer my thoughts with a bit of TA?


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## Julia (27 March 2006)

Hi Bunyip,

Wouldn't disagree with your view about brokers for a heartbeat!  I learned the hard way.

Your three golden rules  make complete sense and suit my need for simplicity.

This has been a really useful exchange for me.

With thanks and good wishes.

Julia

PS  The dreaded FWD is up 14c today.  Sorry for putting this on the GTP thread but it's follow-on from a previous post by Bunyip.


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## abucs (27 March 2006)

Each to his own Bunyip.

I'm up over $300K on GTP and i find i make the biggest profits on stocks heading south such as GTP below $1, or such as Aristocrat, or even stocks about to jump such as Jumbo buy at 2.1c to sell at 8.4c last year.  It only works if you have a correct view of how much a stock is really worth.  Of course that is a little more difficult than observing which way a line is going.

PCH, yes i think  it's a good time to pick up land.  The thing with GTP though is that much of what it does is for the long term.  Although good, this can lead to price volatilty with people jumping in and out of the stock following after quick returns.  As mentioned before, i'm wanting the grapes, olives and cattle products to do well to increase cashflow and underpin dividend increases that will reduce that volatility.


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## bunyip (27 March 2006)

Abucs

A 300k gain is a great result if your initial investment was 100k, but not so good if you invested 2 million.
The true measure of performance is return on invested capital. Also, the length of time taken to achieve that return must be taken into account.
I'd be interested in knowing what percentage gain you've got so far on your GTP investment, and how long its taken you to get it.
Of course, this is your business, not mine, and I understand if you'd prefer to keep that information to yourself.

As you've said, each to his own............fortunately we don't all trade the same way, otherwise there'd be no buyers when we want to sell, and no sellers when we want to buy.

Bunyip


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## abucs (27 March 2006)

*Great Southern Plantations*

Bunyip, my first investment in GTP was in 2001, when i first started investing in the stock market.

I added to that over the next 3 years to $70K in total, with prices of 63c to $2.31.

In the last year i have put quite a lot more in at prices of $2.77 to $3.70, most of which i intend to sell over the next 12 months if GTP approaches my valuations.

Not saying TA doesn't work or is not an important tool.  Just agreeing with you that there are other ways.

Good luck.


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## bunyip (28 March 2006)

Abucs

I'm still none the wiser about how much money you've invested in GTP, and what percentage gain you've made on your investment over what time period.
But anyway, I think we can reasonably assume that you've done quite well and you're more than happy with your results.
You started investing in the stockmarket just 5 years ago. Since you're relatively new to the game, I feel there are a couple of things you should be aware of. (perrhaps you already are aware of them).

First.....We're been in a bull market for the last three years. Not just any bull market either - the last three years have been probably the best period in the history of the stockmarket. The performance of an investment strategy must be assessed on how it performs overall, in good times and bad. A fundamentally based buy and hold strategy that uses 'fair valuation' as it's main criteria might perform very well during a bull market, but result in you getting badly mauled during a bear market.

Second....There's a lot of 'lost opportunity' cost in holding a stock for months or years, including lengthy periods when it performs poorly. While your stock is heading south for prolonged periods of time, your money could have been deployed in a bullish stock that would have given you big returns.

Third...You've stated that you'll unload most of your GTP holdings over the next 12 months if it approaches your valuations. The potential flaw in your plan is that it may not get to or near your valuations. What then? Hold it for another couple of years, even though it may fall away severely again? And while you're holding a non performer, miss out on some great profit opportunities in other stocks?
I'm not saying this is what will happen, but you need to be aware of the possibilities and the potential consequences.

As a comparison with your investment approach, you might be interested in taking a look at what was achievable by using a simple technical analysis approach to trading GTP over the last few years. 

You said you first started investing in GTP in 2001. GTP was mostly bearish that year. Maybe you began buying  after October 2001 when the stock had bottomed out and begun a new uptrend. Then again, maybe you started buying earlier in the year when the stock was plunging south. In which case I daresay you'd have been grinding your teeth and wondering if you'd made a mistake as you watched the value of your investment evaporating. 

GTP in 2001 was a technical trader's dream. It could have been sold short using CFD's or put options, and the profit would have been impressive as the stock shed more than two thirds of it's value.

Between August 01 and April 02, a new uptrend offered the nimble footed market technician an opportunity to roughly double his money with a simplistic technical strategy of buying the dips and using a trailing stop exit strategy.

GTP put in a monster uptrend from May 03 to February 05. Working entirely from weekly charts, a trend trading approach based on pure technical analysis would have signalled an entry from the first pullback somewhere around $1.10 in late July 2003, and a trailing stop would have closed the position at around $3.97 in March 05. 
In other words an investment of 100k could have been turned into 340k in about 19 months.

This year GTP has presented the opportunity for a 30% gain so far simply by woking from a weekly chart and buying the first dip in the new uptrend.

I could give you other examples of how a pure TA approach has offered excellent profit opportunities, but I'm sure you're getting the picture.

The technical approach offers many advantages over a  fundamenatally based 'buy and hold' approach...... 

*You can avoid tying up your capital for months or years in a non performing stock.
*You can redeploy your funds into a high performing stock once you quit your holdings in a non performer.
*You can sell short or buy put options to take advantge of the profit opportunities that arise in bearish stocks/markets.
*You are not at the mercy of a bear market......a skilled technical trader makes good money in a bear market while most other investors cop a mauling.

The above examples of using a technical approach to trade GTP are based on one of the simplest and most effective of all technical analysis strategies.....
1. Wait for a new trend to begin.
2. Buy the first dip in the new trend. (or short the first rally in a downtrend)
3. Trail the stop until you're taken out of the trade.

Technical analysis frightens a lot of people due to it's perceived complexity - but it really can be as simple and effective as I've outlined above.
Technical analysts themselves tend to give technical analysis a bad name by making it unnecessarily complex, trying to use too many techniques, focusing too much on fancy indicators while paying too little attention to the direction of the trend and the price patterns within the trend.

I'm not bagging fundamental analysis. In fact I use it myself by only buying stocks that appear to have decent fundamentals and only shorting those that appear to have weak fundamentals. Its just that I use trend identification as my way of forming a view of the fundamentals, rather than the more conventional and time-consuming practice of reading the financial pages, poring over company reports and brokers newsletters, trying to estimate fair value,  etc etc.
The fatal flaw I see in fundamental analysis is that it lacks a timing component. It tells you what to buy, but not when to buy and when to sell. Consequently a lot of investors lose a lot of money by sinking their funds into a 'great' stock that's plunging southward, is likely to plunge a lot further, and may not come back up for years, if ever.

I'm well aware that TA is not for everyone. Depends on your personality I guess - each to his own. Each trader/investor must find what works for him or her, then stick with it. 

Bunyip


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## abucs (28 March 2006)

Hello Bunyip, i think it depends on what you are wanting.

I am in my 30's and want to invest for a living and spend my time travelling and not needing to work.  Something i have started moving to in the last year and intend to fully complete in the next year or so.  

In my mind you need a certain guaranteed income (dividends) that will be able to fund this.  The rest of your funds can be used for short term plays as you have mentioned.  (Although i still favour long term fundamentals).

Say you had 500,000 shares in GTP (which i don't) this would give you a dividend income of $100,000 before tax with the reasonable expectation that there would be a 30c dividend ($214,000 before tax) in 5 to 6 years time.

In which case the ups and downs you refer to don't mean so much if the dividends are important and you have confidence in the company long term.  And with GTP, i am confident and it is one of the companies i hold for those dividends.

I started with zero dollars five years ago and now have a dividend stream of  well over $100K per year with GTP being a minor part of that (although i expect it to grow).  In the next 2-3 years i am expecting the dividend stream to be about $200K (mostly from increased divs from other stocks) and most of my stocks have PE's of less than 10 and generate strong earnings that should weather a downturn in sentiment.

Yes, GTP may not reach my valuations and i am prepared to make a decision one way or the other when the time comes.  But my valuations will form part of my decision on what to do if that is the case.

You mention above that TA can be like the lazy mans fundamentals and say that if the fundamentalists are buying or selling then this is a good sign to you on where a stock is heading.  I agree and think this makes a lot of sense. I simply aim to be one of the fundamentalists that create those trends.  If i am right with GTP then i will be one of the fundamentalists that may create the next downtrend for GTP.

With expected increased personal cashflow in the next couple of years i'm sure i will take an interest in TA for some short term plays (for fun) and am interested in reading your experienced comments.

My majority holding in GTP though is for current and expected dividends and i would only sell out of that if it far exceeded my valuations.  (Which is possible).


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## abucs (28 March 2006)

With poring over annual reports, i love doing that as i love to continually learn what is happening in the world. Although it is time consuming (fair enough) and most of them end up in the bin. I think it is fascinating though reading about different industries.  The thing i like about stocks is that it is always an education. And that education will help in the future.

A bank will always basically be a bank and learning about them now will help 20 years from now.  

In contrast to a three year old filly that likes the wet at Randwick that won't even be running in four years time.

With reading papers and brokers comments, sure i like to read them but as you have mentioned above, they may not always be the truth, the whole truth and nothing but the truth.


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## bunyip (28 March 2006)

Abucs

You make some good points. Certainly there is great benefit in an investment style that produces steady income year in year out, such as that produced by dividends. In fact I have some long term holdings myself, one of which is NAB. Bought it about 10 years ago for a shade over $11. It was paying 7% fully franked at the time, so its been worth holding just for the dividends alone, irrespective of the what the share price has done during the time I've been holding it.

In the last few years I've gone increasingly down the technical analysis road, although not necessarily short term. A trend trading approach sticks with the trade while the trend remains favourable, which in some stocks could be years. In this case, a technical approach becomes at the same time an income producing approach if the stock pays a decent dividend.
Of course TA also caters for the short termer who likes the constant turnover and small but regular profits that can be produced by swing trading, where a few days to a couple of weeks is a common holding time for a trade.

One point to keep in mind is that a TA approach to investing doesn't have to be time consuming. Working from weekly charts means a TA trader can follow hundreds of stocks in just an hour or two each weekend - particularly if he uses TA software that can scan for his preferred setups.
With today's technology - laptops, mobile phones etc, he could be travelling the world and still be in a position to download his data and do his analysis each weekend, place his orders, adjust his stops on existing positions and so on. All in just a couple of hours once a week.

Thanks for your input into our discussion. This has been a great thread, even if I've been guilty of steering it off topic to some extent. 

Cheers, and continued success with your fundamental approach.

Bunyip


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## Julia (28 March 2006)

I've been following this thread with interest and note the contrast in the exchange of views between the participants, notably abucs and bunyip, with that of the main players in other threads.  No particular ego trips, but rather a thoughtful and considered exchange between two people whose views may not after all be as far apart as first appeared.  Civilised and constructive.

Abucs, if you've created a capital base capable of generating $100,000 - $200,000 in dividends from nothing in five years, congratulations.  Good for you.

Bunyip, your point about the lengthy "downtime" with GTP (which of course applies to other stocks) is really well made.  It may well be trending up nicely again at present, but the question of what else the money could have been doing while it languished for almost the past year is something which  I've been very conscious of.
Abucs, is this something which you considered during the last year?

Bunyip again, if one were to pull funds out of non-defensive stocks during a bear market yet was not comfortable with short selling or using puts, what would be your suggestion as to what to do with the funds in the meantime?
Just leave it in cash?

Julia


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## pch (29 March 2006)

Heh, in my case (I subscribe to Abucs view but I also read what Bunyip said with great interest). I bought $10k of Woodside at $11 and held it for some 6 months and concluded it should have 'come good' by then and sold it for $12ish as I thought that I could do better elsewhere.. duuhh me

Thus I decided that as soon as I sell the market will immediately pick up and that stock will be 'discovered' (Peter Lynch of 'One up on Wall St' fame had a term for it that I forget now..)

I don't know about you guys but I am geared so I was simply paying the interest on the original purchase via line of credit (no margin loan and no margin calls) and after tax writeoff and dividends broke even cashflow wise.. so if it took a year to recover, it didn't bother me much as I wasn't actually losing.. Plus after gaining from $1, going from $5 to under $3 was annoying, but you can't say its been exactly a bad return..


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## bunyip (29 March 2006)

Greetings Julia

Regarding what to do with your money if you pull it out of the market for a time.....there are probably others on this forum who are better qualified to comment than I am. 
Because I'm just as comfortable playing the short side of the market as the long side,  my funds tend to be gainfully employed regardless of market conditions.
We don't know when a market will change from bearish back to bullish, so you'd want to make sure you have ready access to your funds as soon as market conditions are more to your liking. An 'on call' term deposit would be one way to ensure you can get your hands on your money any time you want.

However, my first suggestion is that you make it your business to learn how to sell short so you're comfortable playing both sides of the market. 
The bear market of 2002 presented loads of opportunities to profit from selling short - the next bear market will be no different. Be a shame to miss out on making some decent money simply because you lack the knowledge and confidence to play the short side. Not only that, but there's a fair bit of personal satisfaction in making regular profits under market conditions that are causing the masses to moan about how much money they're losing and how difficult trading is under these conditions!

CFD's make it just as easy to sell short as to go long. And with CFD's you get paid interest on your short positions - not very much interest mind you, but its better than a poke in the eye with a sharp stick!
I suggest opening an account with a CFD broker such as CMC Markets or IG Markets, and funding it was just a few hundred dollars.  Then find yourself a bearish stock and start having a play. Wait for the bearish stock to rally for a few days, then put in a bearish candle that suggests the rally is finished and the downtrend has resumed. Place a sell stop entry order a few ticks under the bearish candle, and an 'if done' stop loss order a few ticks above the high of the rally. You can short as small a position as you want, and at $10 (with CMC) the commission isn't going to kill you. You can keep doing this over and over again with very small amounts of money until you start feeling comfortable with selling short.
You need charting software to follow this approach..... CFD brokers provide free charting software as part of the deal when you use their online trading platform.

However if after giving it a fair sort of a trial you decide that short selling is definitely not for you, then a bear market may still offer some profitable buying opportunities if you can find a bullish sector.
One of my mentors, Dave Landry, expresses the view that sector direction is more important than overall market direction. Supporting this view is that fact that while the US market was flat for the last couple of years, there were still some bullish sectors - e.g. Energy - that offered great trading opportunites in very bullish stocks.
Personally I prefer not to go against the overall market direction. Bull markets are best traded from the long side, and bear markets from the short side.
As for a sideways market, there are usually opportunites to buy bullish stocks in bullish sectors and to short bearish stocks in bearish sectors.

At the risk of sounding repetitive I'll again mention Stan Weinstein's excellent book 'Secrets For Profiting In Bull And Bear Markets'......it contains a 50 page chapter about selling short.

Cheers
Bunyip


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## abucs (29 March 2006)

Well done with NAB Bunyip, that looks like a great investment.  Looking forward to more of your posts.

Julia, it didn't feel so good as GTP was dropping and then going sideways.
That year though i was busy selling growth stocks and buying into dividend stocks to have that income producing base. So after redoing the calculations i held on and then started a margin loan to buy more.  As pch mentions, you have to service the loan and thus the returns are affected by this.  I'm a little wary of debt and that is why i am happy in treating that money a little differently and will sell out at a cheaper price than my majority holding.
After having the income producing base i may be more open to selling on a downtrend.  I still think though that the best plays are to find something like NAB and just enjoy the ride.

pch, it looks like you are good at picking stocks. Perhaps it just takes a little while for the rest of us to catch up with you.  )


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## pch (29 March 2006)

abucs said:
			
		

> pch, it looks like you are good at picking stocks. Perhaps it just takes a little while for the rest of us to catch up with you.  )




Hahaha! No I was lucky and in a bull market! I have uttely no faith in my own abilities. Being a contrarian investor, you are basically doing an exercise in polishing turds and often no matter how much you polish they are still turds..

Your waaaay ahread of me in returns by light years. I have about a years income if I cashed out tomorrow..


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## RichKid (29 March 2006)

bunyip said:
			
		

> .....................
> One of my mentors, Dave Landry, expresses the view that sector direction is more important than overall market direction. Supporting this view is that fact that while the US market was flat for the last couple of years, there were still some bullish sectors - e.g. Energy - that offered great trading opportunites in very bullish stocks.
> Personally I prefer not to go against the overall market direction. Bull markets are best traded from the long side, and bear markets from the short side.
> As for a sideways market, there are usually opportunites to buy bullish stocks in bullish sectors and to short bearish stocks in bearish sectors.....




Just some thoughts:
If you were to take Landry's view a step further, following the logic, you could also discount sector direction too as some stocks in the sector will be going in the opposite direction to the sector (eg BSL v OST atm). So then you concentrate on the trend of the stock only. Sometimes by the time you see the sector move it's too late, just as with any other trend. Often the stock will be going up for the same reasons the sector is going up so it helps to know why at times.

I like the emphasis on trend following- ie go long when the market is long and vice versa. Some long term technical investors think they are contrarians when they buy on short term dips in overall long term uptrends. They are still buying into an uptrending stock.

Your recent posts are like TA v fundamentals in a nutshell, great work Bunyip!


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## TheAnalyst (29 March 2006)

recent trades.....not all of em as i have done a couple of hundred this year but watching and waiting to get GTP again.

GTPIZK	27/03/06 10:51 320389 Sell	10000	1.68 16,770.30	Filled	 
GTPIZK	27/03/06 10:51	320389	Sell	10000	1.68	16,770.30	SEATS Entered	 
GTPIZK	27/03/06 10:51	320389	Sell	10000	1.68	16,770.30	New Request	 
GTPIZK	16/03/06 10:42	318092	Buy	10000	1.48	14,829.70	Filled	 
GTPIZK	16/03/06 10:42	318092	Buy	10000	1.48	14,829.70	SEATS Entered	 
GTPIZK	16/03/06 10:42	318092	Buy	10000	1.48	14,829.70
	New Request


WBCIM5	29/03/06 14:51	321583	Sell	5000	3.27	16,320.30	Filled	 
WBCIM5	29/03/06 14:51	321583	Sell	5000	3.27	16,320.30	SEATS Entered	 
 WBCIM5	29/03/06 14:51	321583	Sell	5000	3.27	16,320.30	New Request	 
 WBCIM5	29/03/06 13:44	321539	Buy	5000	3.30	16,529.70	Filled	 
 WBCIM5	29/03/06 13:44	321539	Buy	5000	3.30	16,529.70	SEATS Entered	 
 WBCIM5	29/03/06 13:44	321539	Buy	5000	3.30	16,529.70	New Request

ANZIMP	29/03/06 13:01	321511	Sell	4500	3.76	16,925.20	Filled	 
 ANZIMP	29/03/06 13:01	321511	Sell	2000	3.76	16,925.20	SEATS Amended	 
 ANZIMP	29/03/06 13:01	321511	Sell	2000	3.76	16,925.20	Amend Request	 
 ANZIMP	29/03/06 12:54	321511	Sell	2500	3.77	16,935.30	Partially Filled	 
 ANZIMP	29/03/06 12:54	321511	Sell	4500	3.77	16,935.30	SEATS Entered	 
 ANZIMP	29/03/06 12:54	321511	Sell	4500	3.77	16,935.30	New Request	 
 ANZIMP	29/03/06 11:35	321442	Sell	4500	3.79	17,025.30	Cancelled	 
 ANZIMP	29/03/06 11:35	321442	Sell	4500	3.79	17,025.30	Cancel Request	 
 ANZIMP	29/03/06 11:34	321442	Sell	4500	3.79	17,025.30	SEATS Amended
ANZIMP	29/03/06 11:34	321442	Sell	4500	3.79	17,025.30	Amend Request	 

ANZIMP	29/03/06 11:32	321442	Sell	4500	3.80	17,070.30	SEATS Entered	 

ANZIMP	29/03/06 11:32	321442	Sell	4500	3.80	17,070.30	New Request	 

ANZIMP	29/03/06 10:02	321295	Buy	4500	3.71	16,724.70	Filled	 

ANZIMP	29/03/06 10:02	321295	Buy	4500	3.71	16,724.70	SEATS Entered	 

ANZIMP	29/03/06 10:02	321295	Buy	4500	3.71	16,724.70	New Request

ANZIMP	28/03/06 12:15	321001	Sell	5000	3.92	19,610.30	Filled	 

ANZIMP	28/03/06 12:14	321001	Sell	4000	3.93	19,610.30	Partially Filled	 

ANZIMP	28/03/06 12:14	321001	Sell	5000	3.92	19,570.30	SEATS Entered	 

ANZIMP	28/03/06 12:14	321001	Sell	5000	3.92	19,570.30	New Request	 

ANZIMP	28/03/06 10:37	320885	Buy	5000	3.65	18,279.70	Filled	 

ANZIMP	28/03/06 10:37	320885	Buy	5000	3.65	18,279.70	SEATS Entered	 

ANZIMP	28/03/06 10:37	320885	Buy	5000	3.65	18,279.70	New Request


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## bunyip (29 March 2006)

Hi Richkid


My mates and I were keen pig hunters when we were in our teens and early twenties. Our first couple of pig hunts were unsuccessful......we spent all day walking around dry bushland but didn't see a single pig. After that we realised we had to choose our hunting grounds more carefully. Pigs love grain, mud and water, and low bushy cover to hide in during the day. So we got permission to hunt on properties that grew grain, and had scrubby creeks and swamps nearby. Our pig hunts became successful from then on, simply because we carefully chose our hunting ground.

The value of sector analysis is that it helps you to find the best hunting grounds in which to look for good stocks to trade. Sure there are some stocks running contrary to their sector, but most will be running with the sector - you trade the ones that are trending in harmony with their sector and you ignore those that are not.

In the last couple of years the US market has been pretty flat and would have frustrated many traders. But sector analysis allowed switched on traders to zero in on the hunting grounds (sectors) that were outperforming the general market. Energy was one of those sectors.....most of the US Energy stocks offered superb trading opportunities.

Perhaps technical analysis seems to be at odds with fundamentals analysis, but its not really. Technical analysis starts with trend identification - this is in effect a form of fundamental analysis, since trends are caused primarily by fundamentals.

Cheers
Bunyip


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## RichKid (29 March 2006)

RichKid said:
			
		

> .....
> I like the emphasis on trend following- ie go long when the market is long and vice versa. Some long term technical investors think they are contrarians when they buy on short term dips in overall long term uptrends. They are still buying into an uptrending stock.
> 
> Your recent posts are like TA v fundamentals in a nutshell, great work Bunyip!




Prefer not to quote myself but I missed something which you mentioned earlier Bunyip. In relation to buying downtrending stocks (or 'dips')- some fundamental investors would have 'timed' the buy (ie buy once the stock came down to their valuation price or fell to an undervalue), they may also time the exit once it becomes 'overvalued' whatever that may be. Where the market agrees with them they well buy at the same time as us technicians  do. They may then achieve the same outcome as us technicians or better (ie lower trade costs, tax benefits, dividends etc). 

When fundamentals people just buy and pray come hell or highwater (that is the stereotype/caricuture of the fundamentals investor) you are in big trouble as anything can happen as there is an untested assumption that the stocks have to go up- you are stuck in it, opportunity cost and all that. 

So if the fundamentals investor has a plan (that they have tested and know to work, eg by looking at past economic/financial history for various co's/markets) then they can do well. Many people make money in many different ways. We are all lookig to benefit from patterns (eg patterns in EPS, Profit or Div Yld) and trends in some way or another imo as that provides a method .

Maybe we should move this stuff to a new thread??


----------



## RichKid (29 March 2006)

bunyip said:
			
		

> Hi Richkid
> 
> 
> My mates and I were keen pig hunters when we were in our teens .....................
> ...




Great analogy Bunyip, I agree (always more game near the waterholes too! especially during droughts), TA ppl and fundamentals ppl feed off each other and often do the same thing for different reasons. I didn't see your post in time but I think we share the same view- but you appear to be implementing it a lot better than I am atm!! Good to hear!


----------



## abucs (29 March 2006)

Just a quick comment on sector analysis.

The Platinum Japan fund seemed to do extremely well even when the Nikkei was flat for years.

I think they concentrated on the medical-pharmaceutical sector that was both consolidating and booming due to all the grey Japanese.

(Perhaps a few turned grey before their time waiting for the rest of the Nikkei ?)

I notice that some of their Japan related funds have started to move again recently with the general Nikkei moving forward.

Does anyone invest in overseas shares directly, or do you think a fund is better for diversity from ASX shares ?

I'm thinking about living in Asia for a while but am not confident with their stock market setups and transparencies.


----------



## abucs (30 March 2006)

*Great Southern Plantations*

Nice to see CBA buying another percentage of GTP.

I wonder if the guy/gal behind the CBA desk is a fundamentalist or a Trend Analyst ?   )

Just as long as they know what they're doing.

I'd say if they are in buying mode it probably means they intend holding onto their 11% for a while.


----------



## bunyip (30 March 2006)

QUOTE:
Nice to see CBA buying another percentage of GTP.
I wonder if the guy/gal behind the CBA desk is a fundamentalist or a Trend Analyst ? )
Just as long as they know what they're doing.

....................................................................................................

Probably fundamentalist mainly, although maybe a bit of both eh Abucs?

They appear to recognise that 'the trend is their friend' anyway, so that's a good start!

Where did you learn that CBA are buying?

Bunyip


----------



## savtin (30 March 2006)

Bunyip,
There was an ASX announcment. Very positive.

cheers
savtin


----------



## abucs (30 March 2006)

Yeah, i do work in a CBA/Colonial financial services related area (their computer section) but i don't get any inside info.

I read the announcement Savtin referred to.


----------



## bunyip (30 March 2006)

So how does anyone get access to these ASX announcements? Do you go to the ASX website or is there another way?

Bunyip


----------



## michael_selway (30 March 2006)

bunyip said:
			
		

> So how does anyone get access to these ASX announcements? Do you go to the ASX website or is there another way?
> 
> Bunyip




http://www.asx.com.au/asx/statistics/announcementSearch.do

type in GTP

hm yes liek yrou broker/bank will also have it online up to date

thx

MS


----------



## bunyip (30 March 2006)

Righto - thanks Michael. I don't trade the Aussie market but I'll have a look anyway.

Bunyip


----------



## Julia (30 March 2006)

You can also register with ASIC for their company alerts emails.

Register the companies in which you are interested and every time there is an announcement from that company you will receive an email from ASIC.
I had an email re this one today.

Julia


----------



## Nicks (31 March 2006)

CBA just picked up a few million shares to increase their substantial holding in GTP.


----------



## savtin (31 March 2006)

They're now at 11%. which is good news. They are still buying with the SP over $4 which confirms our belief that the company is still cheap.   Maybe they'll take them over in the future with their vast land assets???

regards
savtin

go gtp


----------



## Nicks (31 March 2006)

yeah... think i might pick up a few million as well


----------



## abucs (31 March 2006)

Question for the TA's.

With GTP going on it's recent run, would you have a stop loss on a current trade of this trend ?

Would you say $3.90 or so and move this up at the stock rises ?

Where would your stop loss be, and why would you pick that number ?

Regards,
Abucs.


----------



## abucs (31 March 2006)

Another large order after the bell that mops up excess selling and then dissappears again.

Anyone have thoughts on this ?

I think the buy bid was for about 276K shares at 4.05 = over $ 1 million

Other than that it looked like more sellers than buyers.


----------



## bunyip (31 March 2006)

A longer term trend following approach would be to trail a stop below the troughs on a weekly chart. The most recent trough on the weekly was the low at $3.61
A stop 2% under that low would mean the stop would be sitting at $3.54
That might sound like a fair way away for a stop, but a properly placed trailing stop tends to give the trade plenty of room in the early stages, then moves closer to the price action as the trend gradually runs out of steam. If the trend runs out of steam very suddenly by plunging into a new downtrend without first forming a flat topping pattern, then a trailing stop based on a weekly chart leaves plenty of profit on the table.
Like everything else, trailing stops work great sometimes, not so great other times, but overall they do a pretty fair job as a tool for helping you to stay in trends and progressively lock in profit.

Julia....thanks for the info about ASIC

Bunyip


----------



## savtin1 (3 April 2006)

Hi all GTP holders,

announcement out regardng the upcoming US global roadshow...apparently GTP is conducting a roadshow in the States as of tomorrow i think....so it should be interesting times ahead.......buckle up. hopefully they like our business model and purchase some (lots of) stock. 

then we'll all take a ride up towards the $5.00 mark......soon very soon


----------



## savtin (5 April 2006)

Hi  GTP holders,

GTP was travelling well (hit $4.20 yesterday) until todays article in the AFR regarding the 12 month pre-payment rule and the tax laws for MIS schemes. 

The committee is to review next tuesday (11.4.06) .....gees i hope they don't do anything stupid and hinder the agribusiness sector by changing the tax laws.....keep it as it is and extend the sunset clause to 2020................

what do other GTP holders think...................i am confident in the company but if there is any negative outcome to the tax laws the sector may be hit with negative sentiment and down she'll go............the forestry minister is super keen on keeping the status quo so let's hope he can bat well for all of us...

any other thoughts????????????

cheers
savtin 


--------------------

Cheers Savtin,


----------



## michael_selway (5 April 2006)

savtin said:
			
		

> Hi  GTP holders,
> 
> GTP was travelling well (hit $4.20 yesterday) until todays article in the AFR regarding the 12 month pre-payment rule and the tax laws for MIS schemes.
> 
> ...




Thanks for the info Stavin, was wondering why the drop today

hopefully its not negative, as at 11.4.06

thx

MS


----------



## abucs (5 April 2006)

Thanks Savtin.  2020 extension sounds good to me too.  

I think good or bad news next Tuesday could lead the sentiment either way coming to the end of FY.

The Forestry Minister has only said positive things towards the industry thus far, which is re-assuring.

As mentioned previously, with GTP's land rotation due to step up in 2009 the sunset clause was more an issue for gtp's competitors.

Although i notice in the latest roadshow the expected land rotation numbers have been revised down.  Not sure exactly why, perhaps a question to put directly to gtp ?


----------



## abucs (5 April 2006)

Sold 10% of my holding yesterday at $4.16.

Hoping to sell another 20% closer to $5, and then to hold the rest.


----------



## TheAnalyst (5 April 2006)

Hi Peoples

I missed the AFR article so would some mind giving a me a bit of a run down on it.

Cheers


----------



## Julia (5 April 2006)

Savtin

You are absolutely right about the effect on GT P's SP if there is even a hint of any change in the tax status of the MIS concessions.  I guess we will be holding our breath somewhat until we know the outcome.

This is the main reason I will eventually liquidate all my GTP shares.  I'm just not comfortable with the vulnerability of the company - excellent though it undoubtedly is - to negative suggestions on the tax concessions.

Julia


----------



## Out Too Soon (5 April 2006)

So GTP has risen recently after depressing us for so long. The question is, is it about to dive again or is it on the climb? I dont want to be stuck with it for another 9 depressing months waiting for it to get back to this level. Of course if I sell now the price is sure to sky rocket, ummm!


----------



## Duckman#72 (5 April 2006)

Julia said:
			
		

> You are absolutely right about the effect on GT P's SP if there is even a hint of any change in the tax status of the MIS concessions.  I guess we will be holding our breath somewhat until we know the outcome.
> 
> This is the main reason I will eventually liquidate all my GTP shares.  I'm just not comfortable with the vulnerability of the company - excellent though it undoubtedly is - to negative suggestions on the tax concessions.
> 
> Julia




Hi Guys

Rules are always set by the ATO and lawyers and accountants are paid to work find legal ways around them.

Rightly or wrongly I'm holding mine. I think they have some way to run yet.

I am more concerned about the increased top tax thresholds in 2006/7. It was only a couple of years ago when the top rate of tax kicked in at $50,000 - how quickly we move to $125,000!!!

Duckman


----------



## abucs (6 April 2006)

Sell out now 'Out to Soon' !!!

Make us all happy.


----------



## Julia (6 April 2006)

abucs said:
			
		

> Sell out now 'Out to Soon' !!!
> 
> Make us all happy.




Abucs

Why are you suggesting "out too soon" should sell out now?

Julia


----------



## savtin (6 April 2006)

Julia,
it was meant to be a joke .....go back and look at what was said by the referenced post....he said if i sell then likely events would be that GTP will skyrocket.........hence abucs told him to sell................so the SP will go through the roof....

cheers
savtin


----------



## abucs (6 April 2006)

Sorry.  My delivery (among other things) needs improving.

Terms of reference of the Treasury review: 

1. The commercial viability and current tax treatment of plantation investment; 

2. Whether the operation of the Income Tax Assessment Acts impedes investment in longer-term forest rotations which produce higher value products; 

3. The role of State and Territory Governments in plantation industry development as investors, growers and land managers, and any implication this has for competitive neutrality with regard to tax liabilities and incentives;

4. The capacity to adapt existing tax policies to contribute to achieving the Australian and State Governments' desire to achieve a greater integration of plantation and natural resource management policies to improve the management of salinity and water quality; and 

5. The relative roles and effectiveness of tax system and expenditure programmes in the delivery of assistance to the industry.


----------



## abucs (6 April 2006)

I guess you could make cases for positives and negatives that could come out of this.
Although to me I get the impression that the government is having a real good look at the industry and their decisions could set the scene for the next 4 or 5 years.

I see it as a positive and that may explain some of the heavy buying in the last couple of months.  (Or is that just my optimistic self talking?).


----------



## Julia (6 April 2006)

savtin said:
			
		

> Julia,
> it was meant to be a joke .....go back and look at what was said by the referenced post....he said if i sell then likely events would be that GTP will skyrocket.........hence abucs told him to sell................so the SP will go through the roof....
> 
> cheers
> savtin




Well, what a dope I am.  That will teach me to not read through the preceding posts before jumping in!  Sorry for being so dumb.

Seriously, it really is disappointing that none of GTP's rallies appear able to be sustained

Julia


----------



## michael_selway (7 April 2006)

Julia said:
			
		

> Well, what a dope I am.  That will teach me to not read through the preceding posts before jumping in!  Sorry for being so dumb.
> 
> Seriously, it really is disappointing that none of GTP's rallies appear able to be sustained
> 
> Julia




yeah the final hope is the the Full Year Results, hopefully its a good surprise for the market.....



> From Macquarie:
> 
> 
> Great Southern Plantations
> ...


----------



## savtin (7 April 2006)

HI fellow gtp holders,


A great article in the SUnday Telegraph page 14 (7-4-06) "Climate Change may cost 250,000 jobs"..................Australia must start planting trees or face losing 250,000 jobs.......the csiro research suggests greenhouse gases emmisions could be reduced to 60 percent..........australia should start developing a carbon economy and BUILD UP THE FORESTRY INDUSTRY......................

Now why would the government want to impede in the progress of the Agribusiness MIS schemes.........if anything they should be adding incentives


go gtp.


----------



## abucs (7 April 2006)

Good work again Savtin.


----------



## savtin (7 April 2006)

This was also announceed today:


Plantation group urges tax concessions clarification
One of the state's biggest plantation groups is calling on the Federal Government to clarify its stand on tax concessions that encourage investment in the plantation timber industry.

The former federal minister for forests, Wilson Tuckey, warned yesterday that Treasury is looking at ways to adjust a scheme that allows investors in the industry to claim tax deductions.

But Great Southern Plantations' spokesman David Ikin says the industry has been told the Government is thinking of extending the concessions and may make them permanent.

He says the Government needs to assure the industry the arrangement will be upheld.

"If there is any doubt we'd like to see it clarified. At the moment we've got a situation where they've announced this 12 month rule as it's called will go through until 2008, so we're very confident that's the case," he said.


----------



## michael_selway (7 April 2006)

savtin said:
			
		

> This was also announceed today:
> 
> 
> Plantation group urges tax concessions clarification
> ...




Thanks, so it appears to be ok GTP and TIM for now?

11/04/06 we will have more info regarding this

thx

MS


----------



## michael_selway (8 April 2006)

heres the full AFR article for those interested



> SE News
> HD Axe hangs over tax schemes
> BY John Breusch
> WC 775 words
> ...


----------



## Julia (8 April 2006)

Thanks for that, Michael.  No wonder the shares have been affected.

I'm still waiting for a reply to an email I sent to the company asking for their comments on the present situation, especially with regard to what submissions they are making towards the outcome, and how they feel they can act to protect the share price.

Julia


----------



## savtin1 (8 April 2006)

Julia,

Do you honestly think the government will change their policy to hinder the plantation industry???? It is the usuall banter every year by the AFR regarding tax schemes and every year the government reinforces the ruling by extending.  I don't think it will be different this year. But if you are concerned, exit your position until this uncertainty is over (mayber by the 11th April or you may need to wait until the May 9 Budget to know for sure)

then you may want to get back in afterwards if the ruling is favourable or just stay out..............I agree that it is a pity that the SP of a company should be at the mercy of certain tax rulings but that is the nature of the beast.   Remember that their business is unaffected until 2008 June if the worst case transpires.....then their land bank comes into play to assist them.

But my opinon is that the government will extend the sunset clause for another 5 years.....that is the way i see it going and that is why i am staying long with the company..........once this fiasco is over then the GTP should rocket higher..............now if my guess is wrong then YES the SP could go for a dive and my money with it.....but atleast i have my money where my mouth is..............

cheers
savtin


----------



## TheAnalyst (9 April 2006)

The fact of the tax incentive scheme is also an economical one as well....the growth of the plantation industry creates jobs and it creates jobs outside the major cities and regional centres as well.....it increases skills and knowledge and advances Australia in this area to even a place that plantations will be developed to grow in areas that would normally not accomadate plantations but due to financial incentive from the government approved tax schemes it will advance to these places in Australia.

The government will not stop these schemes however it may tighten tax legislation to ensure that the most genuine resourceful schemes and operators only can offer the MIS.


----------



## pch (9 April 2006)

TheAnalyst said:
			
		

> The government will not stop these schemes however it may tighten tax legislation to ensure that the most genuine resourceful schemes and operators only can offer the MIS.




Hehe its already happened in 00/01 and thats why I got into them in the first place 3-4 years ago


----------



## savtin1 (9 April 2006)

Hi Nicks,

How is the GTP SP playing out on a technical front....are you still Bullish even after the recent panic selling because of the uncertainty RE: tax ruling. I mean if the SP falls as it did last year prior to the ruling do you see it well supported at $3.80 first and then $3.50???????

I am happy to hold as i have said except i am expecting some volatilty in the coming weeks until this thing is sorted out.  I am actually hoping it will get to the $3.50 mark so I can buy some more shares......

regards
savtin


----------



## Julia (9 April 2006)

savtin1 said:
			
		

> Julia,
> 
> Do you honestly think the government will change their policy to hinder the plantation industry???? It is the usuall banter every year by the AFR regarding tax schemes and every year the government reinforces the ruling by extending.  I don't think it will be different this year. But if you are concerned, exit your position until this uncertainty is over (mayber by the 11th April or you may need to wait until the May 9 Budget to know for sure)
> 
> ...




Hello Savtin,

It doesn't matter what I think and it doesn't matter what you think.
Neither does it matter that we may think the fundamentals for GTP are terrific.
What does matter is what the market in general PERCEIVES about the stock.
That is what drives the SP.  As we've seen in recent days, any hint of uncertainty hanging over a company adversely affects the price.  There are plenty of other stocks out there without this uncertainty attached to them.

I had a phase of being "attached" to GTP.  Not any more.  Attachment precludes objectivity.  I will sell sooner rather than later rather than endure another year of watching the SP drift lower after the June peak.  I've just become fairly ruthless about chopping out non-performers.  My money can be working better for me than being tied up in a stock that is not a consistent performer.

I'm not arguing with your position on GTP at all.  But I'd be interested to know what would affect your confidence to the point that you would exit, even if temporarily?

Cheers
Julia


----------



## abucs (9 April 2006)

Media Releases
Multiple use forests key to reducing global warming
07 Apr 2006


--------------------------------------------------------------------------------
NAFI has welcomed the news that native forestry and the establishment of tree plantations will play a major role in reducing the effects of global warming, according to a new report by the Australian Business Roundtable on Climate Change.

“The report has identified the importance of tackling greenhouse gas emissions and climate change in a cost-effective, sustainable manner. Forestry provides a number of low-cost solutions for reducing the impacts of industry and the community on the environment,” said NAFI’s CEO, Catherine Murphy.

“Tree plantations and actively growing native forests sequester greenhouse gases from the atmosphere and these gases are then permanently stored in the harvested timber products,” she said.

The report refers to reductions in landclearing combined with forestry (largely plantation establishment) as having the largest positive affect on carbon emissions in the last 20 years. 

“Tree plantations are a cost effective way of reducing global warming as they are a market based mechanism which provides a dollar incentive to reduce global warming. $390 million of new carbon credits are currently produced for free each year from new plantations,” said Mrs Murphy.

The ongoing creation of new reserves is a major concern to the forest industries as there is no existing guide to how these new reserves are being managed with consideration of the effects of global warming.

“Global warming will affect new reserves in a number of ways. Climate change could potentially threaten ecosystems and biodiversity. There are currently no considerations of how global warming will affect rainfall, temperatures and adverse weather conditions or increase the occurrence of bushfires. 

“With a large area of new reserves created in recent decades, governments must ensure the areas are actively and adequately managed. This will require more funding for national parks and a more positive approach to active land management,” said Catherine Murphy.

The report also refers to the huge impact ‘stationary energy sources’ are having on greenhouse gas emissions. Australia’s reliance on stationary energy sources (fossil fuels for energy production) could be offset by using biomass as an alternative energy source. 

“By-products of timber harvesting and processing, or wood waste, can be used to generate renewable energy. The energy derived from the by-products of forestry activities could produce 3000 giga-watt hours of electricity without harvesting one more hectare of native forests,” said Mrs Murphy.

The report also refers to the need for 5-star energy rating systems for building construction. The proposed 5-star system for residential construction does not account for the amount of energy used in producing building products, known as embodied energy.

“The low amount of energy used in the production of timber products, combined with the carbon it stores, means it is better for reducing greenhouse gas emissions than using products such as steel and concrete. The Kyoto Protocol fails to recognise that timber products permanently sequester and store carbon from the atmosphere, so it is pleasing to the forest industry to see the Australian Business Roundtable on Climate Change is looking beyond Kyoto.

“This report sends a clear signal that government decisions at all levels must consider the many positive effects that plantations and native forestry can have in reducing global warmig,” said Catherine Murphy.


----------



## savtin1 (9 April 2006)

Great report Abucs,

Julia,

What you say is spot on and I don't disagree with you. You are also correct in that no matter what I think or value the company at .......at the end of the day it will be the broader market that values the company and hence its SP.   AT the moment i don't see a reason to sell based on fundamentals....and the fact that the CBA and UBS nominees increased their positions doesn't hurt either.........

.as for what would cause me to sell my stake in the company.......well only if four things happen.........1) the government changed the laws/rules to discourage grower investors as this would ultimatley affect the profits and hence the SP of GTP.(i don't see this happening as stated above but if it did i would immediately assess my position and could exit)........2) that the management of GTP changed considerably .......3) That i felt that their fundamentals had changed considerably and they would not achieve the growth i have expected............4) if their SP rocketted dramatically and became overpriced........above my valuation of the company.....

cheers
savtin

p.s i can understand your frustration with them.......

p.s.s let us hope that the rest of the market percieves a higher price for them in the future........we just need to get past the May 9 budget first and then it will be on the merits of the company to prove themselves and suprise the analysts and market at large with excellent revenue growth for the year ending June 06.


p.s.s.s    I  also think that the company is attemping to get the market to re-rate their P/E ratio (i.e increase it to 12-14) by trying to acheive a more controlled growth in sales of plantation products and achieve a higher level of growth in their income based (non-plantation products) i.e. annuity income 
............also by telling the market that they are moving away from hybrid and equity issues and may use a modest level of debt instead. At the end of the day it is about what the general market feels about them and GTP has to convince them with performance and results.


----------



## TheAnalyst (10 April 2006)

JUst got some this morning....go GTP go...dont be afraid of the tax situation there is no way no the government will get rid of it.....its buying oppurtunity......do u really think cba would be buying up buig for no reason??


GTPIZK	10/04/06 10:07	324676	Buy 6000	 1.61  9,679.80	Filled


----------



## abucs (10 April 2006)

UBS announcement as well that they have increased their stake again by over 2% to 10 %.

With both the big boys continuing to buy substantial parcels beyond the $4.00 mark, at a time where there is uncertainty (for us anyway) you could be forgiven for thinking that they have their ear to the ground, and it's positive rumblings.   )


----------



## TheAnalyst (10 April 2006)

CBA increased theirs as well......What is it with me?? I just seem to have picked it again!!!!!!!!!!buying sellingbuying selling buying


----------



## michael_selway (13 April 2006)

savtin1 said:
			
		

> Great report Abucs,
> 
> Julia,
> 
> ...




Hey Satvin, was there any "news" on 11/04/06?

GTP and TIM havent dropped abit since?

thx

MS


----------



## savtin (13 April 2006)

No decision has been made. We will have to wait until the May 9 budget.
cheers
savtin


----------



## Julia (18 April 2006)

Down 17c today.  No announcement on the ASX.  Does anyone know what has happened to cause his?

Julia


----------



## savtin (18 April 2006)

Hi Julia,

Maybe either the TREES conversions and the tax uncertainties until May 9 budget.....is affecting some shareholders....who are exiting for NOW????


----------



## Julia (18 April 2006)

savtin said:
			
		

> Hi Julia,
> 
> Maybe either the TREES conversions and the tax uncertainties until May 9 budget.....is affecting some shareholders....who are exiting for NOW????




Hi Savtin

But wouldn't you think there would have to be some sort of definiive announcement to cause such a large drop in a market where most oher stocks are subsantially up?  No announcement on the ASX and the company say they have no idea what has caused the drop.

Julia


----------



## ghotib (18 April 2006)

Julia said:
			
		

> Hi Savtin
> 
> But wouldn't you think there would have to be some sort of definiive announcement to cause such a large drop in a market where most oher stocks are subsantially up?  No announcement on the ASX and the company say they have no idea what has caused the drop.
> 
> Julia



Yesterday's ABC midday TV news ran quite a long story on (part of??) lobbying to change the tax treatment for MIS investors. Can't imagine that they had an enormous audience of institutional investment managers, but it does suggest that the rumours are flying. 

Real question seems to me to be how much would the changes (whatever they turned out to be) affect GTP's own profitability and growth. I'm asking myself the same question about TIM.

Cheers,

Ghoti


----------



## michael_selway (18 April 2006)

ghotib said:
			
		

> Yesterday's ABC midday TV news ran quite a long story on (part of??) lobbying to change the tax treatment for MIS investors. Can't imagine that they had an enormous audience of institutional investment managers, but it does suggest that the rumours are flying.
> 
> Real question seems to me to be how much would the changes (whatever they turned out to be) affect GTP's own profitability and growth. I'm asking myself the same question about TIM.
> 
> ...




Hi were the rumours on the show +ve or -ve for GTP/TIM u think?

thx

MS


----------



## ghotib (18 April 2006)

Can't answer for GTP - I don't know enough about it. 

If the tax changes reduce the amount of capital TIM can raise, then presumably they'll slow its expansion. However the company is already well on the way to substantial annual income from food crops i.e. to funding growth from cash flow. 
Positive or negative? Depends on your time frame and reasons for holding.

Don't you just hate people who always say "It Depends" 

Ghoti


----------



## TheAnalyst (18 April 2006)

Dont be concerned it was the share price adjusting to the trees conversion into ordinary shares and diluting to the conversion......so relax.....


----------



## Julia (18 April 2006)

TheAnalyst said:
			
		

> Dont be concerned it was the share price adjusting to the trees conversion into ordinary shares and diluting to the conversion......so relax.....




If that was the case, wouldn't the company have commented on it - if for no other reason than to reassure a shareholder - when phoned and specifically asked if they knew of any reason why the SP should have dropped so much?



Ghoti,

Thanks for report of the programme.  Despite your previous non-committal reply to Michael, what sort of impression were you left with ?
i.e. would these companies represent a good investment?
do they seem risky?   are there presently question marks over the MIS schemes?
The timing does seem to indicate a connection given that there isn't anything much else that has happened.

Regards

Julia


----------



## ghotib (19 April 2006)

Hi Julia,

I truly don't have any other comment to make. The programme was a news bulletin and there was no editorial comment. The item reported that there is lobbying to remove the tax deferral for investor growers on the grounds that it makes funds more readily available to plantation companies than to other agribusinesses, and showed a short interview with a dairy farmer who now has plantations around his farm. 

I still don't see GTP and TIM as being directly comparable. I've forgotten most of the detail I looked at in GTP when I chose TIM instead, but the 2 things that sticks in my mind are TIM's greater diversity and the fact that TIM is classified in the materials sector where GTP is financials. 

FWIW I haven't yet seen any reason to sell my TIM shares, but then I only have 515 of them and I'm a long way in front. OTOH I'm not buying any more unless the price drops quite a long way, and if that looks like happening I'd be looking might hard at why. But I buy very conservatively - buffetologically conservatively as far as I'm able. There are an awful lot of people who are happy to buy where I'm not. 

Sorry I can't be more definite. 

Cheers,

Ghoti


----------



## TheAnalyst (19 April 2006)

Julia said:
			
		

> If that was the case, wouldn't the company have commented on it - if for no other reason than to reassure a shareholder - when phoned and specifically asked if they knew of any reason why the SP should have dropped so much?
> 
> 
> 
> ...




They did announce it to the market last month with plenty of warning....just check company announcements and calculate the percentage of dilution of the share price....i think i posted about it and did the calculation previously.


----------



## michael_selway (19 April 2006)

TheAnalyst said:
			
		

> They did announce it to the market last month with plenty of warning....just check company announcements and calculate the percentage of dilution of the share price....i think i posted about it and did the calculation previously.




Hi the thing is, if we know this was the case, then we shoudl have sold before it went ex dilution?

Its different to ex div, because if u didnt sell u would get the div, if u sold before ex div, u wouldnt get div

thx

MS


----------



## Julia (19 April 2006)

Apparently large drop Monday was from two instos reducing their holdings.

Julia


----------



## TheAnalyst (19 April 2006)

Julia said:
			
		

> Apparently large drop Monday was from two instos reducing their holdings.
> 
> Julia




Do you know which insto's sold and how much??


----------



## Duckman#72 (19 April 2006)

michael_selway said:
			
		

> Its different to ex div, because if u didnt sell u would get the div, if u sold before ex div, u wouldnt get div




Yes well said Michael. What benefit to current holders? 

 :swear: Great Southern


----------



## TheAnalyst (19 April 2006)

It should sort itself out as depending on the amount of trees conversions to ordinary shares as the more conversions the less borrowed money GTP will have to pay back and the more conversions GTP will be able to place into an equity account.


----------



## TheAnalyst (19 April 2006)

I just remembered the total trees conversion should make up to 4% of the total ordinary shares on issue therefore from say a share price of $4 it should come back to about $3.80-$3.84 roughly. It then depends on how many trees holders took up the conversion offer but GTP should announce it soon.

Dont expect to get great answers from the company spokeperson as to reply to these types of questions would need a qualified financial accountant/corporate accountant and highly unlikely that GTP would pay someone the right dollars to answer these questions...so most likely an administration dud is trying to answer and probally wouldnt know what to say.


----------



## suhm (19 April 2006)

Hi, new to the boards, I own both TIM and GTP, and their SP is erratic to say the least, like TIM today was down 12c in the morning but finished up 16c, still a strong supporter of GTP though and might top up if it goes down far enough.


----------



## savtin (20 April 2006)

Hi Analyst,
I can't wait until we get the May budget out of the way.........


GO GTP.


----------



## Julia (20 April 2006)

TheAnalyst said:
			
		

> Do you know which insto's sold and how much??




Analyst

UBS reduced their position to now holding 10.3%
CBA   "          "         "        ""           "     12.04%

Julia


----------



## TheAnalyst (20 April 2006)

Julia I cant seem to find this recent announcement in the company announcements.

Also the share dilution so far does not seem to be going to have a dramatic effect as only 1,250,000 new ordinary share issue has been announced representing only 0.4% of shares on issue.

I think the only hazard that is being trumped up once again as always at budget time is the up front tax deduction, which really should have no bearing for a number of years.

Go suncorp metway go


----------



## savtin (20 April 2006)

Julia,
What you have stated is not correct. They both (CBA and UBS) announced to the market last week that they had increased their positions and those % you gave is what they went up to (not down to)........................where are you getting your info from????????


----------



## TheAnalyst (20 April 2006)

i cant believe how incorrect you have been julia!!!!


----------



## savtin (21 April 2006)

Hi analyst,

How do you think GTP will play out in the short term?? seems to be some accumulation going on.
cheers
savtin


----------



## TheAnalyst (21 April 2006)

savtin said:
			
		

> Hi analyst,
> 
> How do you think GTP will play out in the short term?? seems to be some accumulation going on.
> cheers
> savtin




it should continue higher as there was not the full conversions of trees so the dilution is much much smaller so it should trade above $3.90 and once the market gets a wiff of the sales it should shoot up again in line with earnings upgrades and increases.

I got by dividend advice today so its in the bank a couple of days ago and didnt realise.

In early JUne after the next MIS happens the company usually  releases the sales revenue guidance and update. So it should be good and it should slowly climb and gather momentum until just before that date.


----------



## savtin (21 April 2006)

By the way Analyst,
Sorry to pull you up but the two recent announcments by the company as for the conversion of 5.5million shares was for the trees conversion and the 1.5million was for the DRP dividend reinvestment plan.so in total the shares have increased by nearly 7million.......

go back and read the 2 announcments.....anyway don't mean much as this babe is moving up to greaner pastures....

go GTP and all you faithful holders.


----------



## TheAnalyst (21 April 2006)

savtin said:
			
		

> By the way Analyst,
> Sorry to pull you up but the two recent announcments by the company as for the conversion of 5.5million shares was for the trees conversion and the 1.5million was for the DRP dividend reinvestment plan.so in total the shares have increased by nearly 7million.......
> 
> go back and read the 2 announcments.....anyway don't mean much as this babe is moving up to greaner pastures....
> ...




I just read the first one...sorry about that but it is good news as GTP keeps the loan money now and goes into  share equity via conversion. Wonder what they will do with the money and its a sign of market confidence that the holders took up the conversion.


----------



## Julia (21 April 2006)

savtin said:
			
		

> Julia,
> What you have stated is not correct. They both (CBA and UBS) announced to the market last week that they had increased their positions and those % you gave is what they went up to (not down to)........................where are you getting your info from????????




Savtin,

My apologies to everyone.  It was second hand info in that it came from a broker I was talking to.  Her comment was that they had both  reduced their positions to the percentages quoted.  
Will take it up with her!!!

Julia


----------



## Julia (21 April 2006)

TheAnalyst said:
			
		

> i cant believe how incorrect you have been julia!!!!




Analyst

Why not?  I passed on what I understood to be correct information.  It made sense at the time, given the substantial drop in the SP.  It was wrong.  I have apologised.  I notice it was Savtin who picked it up, not you.

Julia


----------



## Julia (21 April 2006)

TheAnalyst said:
			
		

> I just read the first one...sorry about that but it is good news as GTP keeps the loan money now and goes into  share equity via conversion. Wonder what they will do with the money and its a sign of market confidence that the holders took up the conversion.




Isn't there some saying about "he who casts the first stone....."?

Anyway, it was good to see such an improvement today.

Cheers
Julia


----------



## TheAnalyst (21 April 2006)

Julia said:
			
		

> Isn't there some saying about "he who casts the first stone....."?
> 
> Anyway, it was good to see such an improvement today.
> 
> ...




but yours was more serious than mine


----------



## savtin1 (25 April 2006)

Great to see GTP back into the $4.0' range.  Technically looking good. First resistance $4.21 then $4.44 and then $4.65 before attacking $5.03'

GO GTP


----------



## RichKid (25 April 2006)

A stab at an EW count, just practising so it may not be correct, if this move up continues then that last correction may have to be amended.


----------



## michael_selway (25 April 2006)

savtin1 said:
			
		

> Great to see GTP back into the $4.0' range.  Technically looking good. First resistance $4.21 then $4.44 and then $4.65 before attacking $5.03'
> 
> GO GTP




yeah hopefully, but still risks still remain atm

also majority of sales bunched up before year end, hopefully they can get alot more than this time last year, but cant say atm

RichKid so is that bullish or bearish on GTP?

thx

MS


----------



## TheAnalyst (28 April 2006)

Its good to see the appointment of the new non-executive director and it also confirms what i said a while ago that gtp will continue to diversify to continue growth. GTP is about to enter fund, superannuation and investment management on in various assets and equities.


----------



## TheAnalyst (1 May 2006)

With the May 9 budget coming up how do other GTP shareholders feel at the moment? As it always seems a volatile time.


----------



## savtin (1 May 2006)

Analyst,
Sure the SP will be volatile until we get past MAY 9 BUT i don't think the government is going to do anything rash. come late next week it will be back to business. sure you'll probably get some nervous nellies with pea hearts fleeing the stock until this is over but that could be considered prudent management of valuable capital. 

i personally can't wait until may 9 is over............lets just all hope that the governement see it our way and deletes that awful sunset clause making the 12 month prepayment rule and permanent one at least until 2020......that would be fantastic.

cheers
savtin


----------



## TheAnalyst (1 May 2006)

savtin said:
			
		

> Analyst,
> Sure the SP will be volatile until we get past MAY 9 BUT i don't think the government is going to do anything rash. come late next week it will be back to business. sure you'll probably get some nervous nellies with pea hearts fleeing the stock until this is over but that could be considered prudent management of valuable capital.
> 
> i personally can't wait until may 9 is over............lets just all hope that the goavernement see it our way and deletes that awful sunset clause making the 12 month prepayment rule and permenant one at least until 2020......that would be fantastic.
> ...





Yer...the 2020 would be great.....i really am not concerned about the May 9 budget......but i think it has reduced the buying volume until after the date.


----------



## michael_selway (1 May 2006)

TheAnalyst said:
			
		

> Yer...the 2020 would be great.....i really am not concerned about the May 9 budget......but i think it has reduced the buying volume until after the date.




hi not concerned with May 9 budget, but what other possible concerns for GTP do u have if any?

thx

MS


----------



## TheAnalyst (1 May 2006)

michael_selway said:
			
		

> hi not concerned with May 9 budget, but what other possible concerns for GTP do u have if any?
> 
> thx
> 
> MS




No concerns really and just getting ready to see it rally once its announced its earnings targets are exceeded in June as well as increasing its product range to new ventures and its expected earnings are likely to grow and increase on a year on year basis.

I think the dividend should be increased to 5% at least as well.....this will really help the share price and it can afford to do so.


----------



## savtin (7 May 2006)

Hi all GTP holders,

Great Article on GTP in the AFR- interview with the CEO John Young and his ambitious drive to take the company's market cap to 4 -5 Billion within 2 years ( i think that would be fantastic but i think alittle tooooo bullish - especially if we get negative news on tuesday) i mean that would be a SP of $10 - $12.50.

Anyway he (john young) thinks that they may extend the 12 month prepayment rule until 2010 - 2012 the best scenario he said would be if it was deleted altogether i.e. referring to the "sunset claus".

Anyway it also mentioned that John.Y said that they were aiming to increase the mix ratio between plantation and other plantations (horticultural/agribusiness) mix------ changing it to a 50-50% in 2 years..........with some other schemes in the making ............but wouldn't elaborate, so as not to tip off the rest of the competitors, .....something about a product to satisfy demand from the growing asian markets.

Anyway I wish him luck and hope he pulls it off.................let's just get through tuesday nights budget first.

cheers
savtin

GO GTP


----------



## TheAnalyst (7 May 2006)

Thks Satvin 

Great update.....it would not surprise me if John Young did increase the market capitalisation to this amount. The first sign of this indicator is the new executive that was appointed.....and i have always said that gtp will increase diversity and do not be surprised if it ends up in fund management as well.


----------



## abucs (7 May 2006)

Thanks again for the update Savtin.  Wow cap at 4 - 5 billion.  There are definitely plans about to create new business.  When you think about it, GTP has now a huge financial services network.  Companies like AMP were always valued highly because of this ability to take a new profitable financial model to a ready made client base.  Perhaps part of the hoped for larger cap will be for a rerating in GTP's multiples if this part of their 'assets' starts to flex their muscles.


----------



## TheAnalyst (7 May 2006)

I reckon u are right on there Abucs....the thing with this stock is it aint a senetas which is a high risk due to its type of technology....GTP is rip roaring to go and can easily grow and has its networks already in place. It is a company that is establishing its self to be around for a long time in all economic cycles. At the moment it is like a lot of the ships and submarines that the Australian Navy brings into service: that is they are fitted for (things such as the ability to fire cruise missiles and screw on screw off cconvential warheads to nuclear warheads on missles and submarines) but not with.

GTP is the same it is fitted for so many things and as its earnings increase and networks grow it can take on and establish many different projects.


----------



## abucs (7 May 2006)

So you reckon GTP will go nuclear then TheAnalyst.  )

Interesting comment above about Asia.  I heard a rumour about that large  trade a month or so ago before the market opened.  

There is some speculaton that it might have been a consolidation of Asian shareholders into a financial structure  allowing them to take advantage of franking credits.  Also there has been reports from Macquarie that there are major Asian holders of the TREES investments.

Two days to go now before the budget.  Will we be smiling or whinging ? )


----------



## savtin (8 May 2006)

Hi analyst and abucs,

I am lead to believe from a friend of mine that there will be no changes announced tomorrow. My understanding is that they have not had time to review the MIS industry properly and will review later. (due to the whole wheat scandal cole enquiry etc etc) so it will be back to business..

i.e nothing negative and nothing positive either...

conclusion - how will the market take to NO NEWS ???????anyones guess.

GO GTP.

cheers
savtin

what are you thoughts? and anyone elses....is no news good or bad for the stock in the coming weeks??


----------



## savtin (9 May 2006)

As suspected no news (bad or good) so it is back to business for all the agribusiness companies.....

I guess they will review the 12 month prepayment rule next year.

cheers
savtin


----------



## abucs (10 May 2006)

Well the initial reaction Savtin/Analyst seems to be positive.
Still some large parcels being bought, and after the bell as well.
Does anybody know who gets to trade after the 4.00 pm close ?
i'm guessing it is still cba /ubs.
would be good to see confirmation of more buying by those two at these prices.


----------



## savtin (10 May 2006)

Up 18 cents .....that was great. Hopefully it can now sustain a good rally up.

Go GTP

Hi Nick,

What are thoughts from a technical perspective??

cheers
savtin


----------



## TheAnalyst (10 May 2006)

Go GTP go as we have seen the last week weak hands passed on their stock to the professionals once again....


----------



## abucs (15 May 2006)

Interesting reading the weekend Fin Review from 6-7 May.
Apparently GTP now has control over 2.5 million ha of cattle land and are in the top ten cattle barons of Australia.

If only a small fraction of that land can be used also for timber plantations GTP would greatly increase their cashflow.

Below is a link to an 'Australian' article reporting on GTP's aquisition of the WA cattle station Moola Bulla.  The deal was for around $30 million and involved 660,000 ha of land, 35,000 head of cattle and 300 working horses. 

All we want now is for them to discover oil there.  )

http://www.theaustralian.news.com.au/story/0,20867,18783362-25658,00.html


----------



## abucs (16 May 2006)

Queensland cattle property Chudleigh Park bought by GTP for $28.5 million with 182,000 ha of land and 18,000 cattle.

http://townsvillebulletin.news.com.au/common/story_page/0,7034,18992778%5E14787,00.html


----------



## TheAnalyst (16 May 2006)

Criterion has a buy on all these types of stocks including GTP in todays Australian Newspaper

http://www.theaustralian.news.com.au/story/0,20867,19154566-23634,00.html


----------



## savtin (17 May 2006)

I am quite suprised that GTP keeps bobbing under $4.00 mark I would have thought by now we would be heading up over the $4.25 mark.............well away from the dreaded $3's once and for all............. oh well guess we will have to wait until close to end of june................

IF TIM's numbers are anything to go by GTPs results should be satisfying.

common GTP


----------



## TheAnalyst (17 May 2006)

the market overall has been taking a flogging the last week....interest rates...dow etc...


----------



## michael_selway (17 May 2006)

savtin said:
			
		

> I am quite suprised that GTP keeps bobbing under $4.00 mark I would have thought by now we would be heading up over the $4.25 mark.............well away from the dreaded $3's once and for all............. oh well guess we will have to wait until close to end of june................
> 
> IF TIM's numbers are anything to go by GTPs results should be satisfying.
> 
> common GTP




Yeah the thing about these stocks is that theres always "the risk" attached it, ie laws can be put in place anytime to lower deductions, and also when there is bear market/recession, no one needs MIS cause dont have much capital gains (not only shares but property etc)?

Like this yr 2006, yeah might do really well and beat forecasts, however when there is a bear market/recession, they make hardly any sales?

So unless they change their whole business, for some reason u cant get rid of "the risk". Thus these type of shares (esp GTP) have to live with it unfortunately. Thats why GTP can never have a high PE, not a indefineitly sustainable one anyway, for now. Just a thought.

thx

MS


----------



## TheAnalyst (17 May 2006)

Chief executive of the National Association of Forest Industries Catherine Murphy said the rise in plantation woodchip exports showed the effectiveness of the Federal Government's policy, which gives tax benefits to individual plantation investors.

http://www.theage.com.au/news/busin...-imported-trees/2006/05/16/1147545327037.html

Forest industry can't see wood for the (imported) trees
Email Print Normal font Large font Chipping away: woodchips are 40 per cent of Australia's timber exports.
Photo: Erin Jonasson
Advertisement
AdvertisementBy Philip Hopkins
May 17, 2006

PLANTATION hardwood woodchip exports increased significantly last financial year, but Australia is set to record another $2 billion trade deficit in forest products.

Log removals from eucalypt hardwood plantations ”” mostly blue gums ”” rose by 58 per cent to 2.9 million cubic metres last financial year, according to the Australian Bureau of Agricultural and Resource Economics in its latest report on forest and wood products. Sales of eucalypt sawlogs from native forests fell by 4 per cent, to 10 million cubic metres.

ABARE's executive director Brian Fisher said the logs were used for woodchip exports.

Exports of hardwood and softwood woodchips totalled a record $858 million last financial year. Woodchips were 40 per cent of Australian timber exports of $2.1 billion, but this was dwarfed by forest product imports of $4.1 billion.

About half the imports ($2.1 billion) were of paper and paperboard, with printing and writing paper ($1.4 billion) the main source. Figures for this financial year's first half show imports totalling $2.05 billion, and exports $1.02 billion.

Chief executive of the National Association of Forest Industries Catherine Murphy said the rise in plantation woodchip exports showed the effectiveness of the Federal Government's policy, which gives tax benefits to individual plantation investors.

"We have been able to build a strong plantation sector on this platform," she said.

Ms Murphy said plantations would form the basis of the pulp mills planned for Australia. Gunns aims to build a pulp mill in northern Tasmania, and pulp mills are planned for south-west Victoria and south-east South Australia, based on the regions' blue gum plantations.

The high level of paper imports showed the necessity to get such projects off the ground, she said. But Ms Murphy said the figures also underlined that the native forest sector could not be underestimated.

"It's still three times the size of the plantation hardwood sector," she said.

Sawn wood exports in both the September and December quarters remained just above $31 million, about 22 per cent higher than the same period the year before. Dr Fisher said the increase was driven by the rise in pine sawlog exports to Asia, particularly Chinese Taipei.


----------



## savtin (19 May 2006)

I must admit sometimes this companies share price activities dissapoint me.

How I can value this company above $6.00 is beyond me ................especially when i look at the SP and it is $3.75...........i mean that is what price the MARKET is putting on it and who am I to argue with such a large machine.................they always know things that are beyond us..............maybe fundamentally GTP isn't so great................maybe its got its business model all wrong..............a P/E of 8 is pretty ****ty...


----------



## abucs (19 May 2006)

Savtin, 

to me it has always been the cashflow position that has held GTP back.
All of the profits they make go into buying land.  Not a bad thing in itself but it doesn't leave the company with much cash to pay dividends and expand.  
They have needed to continually raise money to expand.

But on the positive side i like the way they have expanded and as soon as the cashflow starts coming in i expect a rerating of the PE ratio.
If you read the recent announcement they have focused on increased cashflow and a step away from the continual timber product expansion model.

As mentioned in a previous post.  I hope that some of the 2.5 million hectares they own for cattle can be used for timber.  I have done some research on the areas where they have bought.  It seems to be next to rivers where native Eucalypts can grow, but not especially good areas for a growing season per se.  So in short, i am still undecided on how much they can use this land for timber products.  There is the possibility of simply planting trees (something they know all about) to improve the grazing land for the cattle by bringing water to the surface.  They could always cut this timber down themselves to use for the future ?

Still, they are a big presence across the landscape of rural Australia and that should allow them to take advantage of future rural opportunities when they arise.

Regards,
abucs.


----------



## pch (19 May 2006)

Consider in the future the value of their assets. In time, they should have a great return on equity due to the fact they can re-use the land once harvested.  Their capital efficiency should also improve a fair amount too.


----------



## TheAnalyst (19 May 2006)

I am glad that there are some on here who appreciate the application of per's and why? Yer, the per is low for this stock due to the dividend payout ratio...and thats why a lot of funds stand back so if it cant rely on growth at least the dividend makes up for it.

Also the entire market is in correction pahase at the moment so the pro's can get an entry for new money into the market...so just wear it out and maybe accumulate stuff that uis truly under done and equate that on a rba cash rate of 7% and if it still looks good buy it from recent drops.


----------



## michael_selway (19 May 2006)

TheAnalyst said:
			
		

> I am glad that there are some on here who appreciate the application of per's and why? Yer, the per is low for this stock due to the dividend payout ratio...and thats why a lot of funds stand back so if it cant rely on growth at least the dividend makes up for it.
> 
> Also the entire market is in correction pahase at the moment so the pro's can get an entry for new money into the market...so just wear it out and maybe accumulate stuff that uis truly under done and equate that on a rba cash rate of 7% and if it still looks good buy it from recent drops.




actually i dont think its the divident thats holding this one back, i think its the risk to future earnings growth and sustainability

thx

MS


----------



## TheAnalyst (19 May 2006)

michael_selway said:
			
		

> actually i dont think its the divident thats holding this one back, i think its the risk to future earnings growth and sustainability
> 
> thx
> 
> MS




Maybe......if this is the case then what do you think the board of directors can do to lessen this risk??...but i still believe the dividend payout ratio has an enormous amount to do with it.


----------



## abucs (21 May 2006)

http://www.couriermail.news.com.au/story/0,20797,19190469-3122,00.htm


----------



## michael_selway (21 May 2006)

TheAnalyst said:
			
		

> Maybe......if this is the case then what do you think the board of directors can do to lessen this risk??...but i still believe the dividend payout ratio has an enormous amount to do with it.




See indirectly, dividends are paid out of debt. You can increase the dividend by increasing the debt. Vice versa, lowering dividend payout means less debt required. So if they want to pay out more dividend, it will actually hurt them as they may have to borrow more money (or issue more shares which dilutes earnings) to fund their projects.

Basically the risk lies in the whole industry, ie Agriculture and MIS schemes. These are tough businesses to be in.

Like last yr, economy was great and an ASX bull market (although property prices did cool of a bit), but yet GTP fell short with its sales forecasts. It just proves that even in "good yrs", earnings stability (growth) is not certain. Also most of their sales occurs in last month of finanical yr which adds to the uncertainty.

They are expanding into other areas like cattle and olives etc, which does lower the risk. But again these still fall under Agriculture and MIS. Unless they become an MBL, which also has Agricuture/MIS projects, but they also have investment projects in other areas like infrastructure, energy etc, ie a true "diversified financial"

However GTP this yr may surprise (beat consensus forecasts) with its sales, but again future yrs cant say with any degree of confidence, thats the risk.

thx

MS

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.4 58.1 63.8 
DPS 14.0 14.0 19.0 18.0


----------



## TheAnalyst (21 May 2006)

michael_selway said:
			
		

> See indirectly, dividends are paid out of debt. You can increase the dividend by increasing the debt. Vice versa, lowering dividend payout means less debt required. So if they want to pay out more dividend, it will actually hurt them as they may have to borrow more money (or issue more shares which dilutes earnings) to fund their projects.
> 
> Basically the risk lies in the whole industry, ie Agriculture and MIS schemes. These are tough businesses to be in.
> 
> ...




Micheal it is illegal to pay dividends out of borrowed money under the corporations Act...they may only be paid out of profits or retained earnings from prior profits.......


----------



## abucs (21 May 2006)

I agree with your sentiments Michael.  I would just say that the value of a company is not always reflected in the share price, especially when fear/uncertainty is involved.   The nature of GTP can swing the share price both ways.

As GTP gets more and more recurring revenue through olives, grapes and cattle income, then this fear and uncertainty will lessen as their income will not be solely dependant on selling MIS schemes.

This recurring income, together with capex savings from rotation of timber land should make GTP flush with funds in 3 or 4 years.  Then uncertainty and fear will vanish and GTP will be a cash cow, if you excuse the pun.

Still, from all reports, including from other MIS companies, 2006 should see another big increase in revenue.

P.S. Nice writeup in the Sydney paper today (Sunday Telegraph page 100) on the Great Southern Cattle schemes.


----------



## michael_selway (21 May 2006)

TheAnalyst said:
			
		

> Micheal it is illegal to pay dividends out of borrowed money under the corporations Act...they may only be paid out of profits or retained earnings from prior profits.......




yeah, so the way around that act is being "indirect"

Eg just pay out more from "profits or retained earnings from prior profits" as normal, which will mean less cash on hand. Then "indirectly" u will need to borrow more money or raise more captital than if u hadnt paid as much dividend.

thx

MS


----------



## TheAnalyst (21 May 2006)

michael_selway said:
			
		

> yeah, so the way around that act is being "indirect"
> 
> Eg just pay out more from "profits or retained earnings from prior profits" as normal, which will mean less cash on hand. Then "indirectly" u will need to borrow more money or raise more captital than if u hadnt paid as much dividend.
> 
> ...




Remember GTP has a consolidated financial statement as revenue comes from different segments......if how u put it is the case then mac bank and others are in the same boat......they make their revenue from different segemnts and from different stages of the process from the investor right down to the sale of the investors share of the product to the end customer.

So dont be to concerned.......it happens every day....so it is actual earnings...What you should now focus on is the reason for the new non executive director and his actual back ground and what the managing director John Young's startegy is and how diversification is all part of destroying the focus of limited products and reducing the risk to earnings.....its like the top analysts were always talking about how banks were not going to make it and their earnings were under threat.....yet bank were diversifying into many and different areas beyond their traditional markets...look what has happened and to those who listened and sold and got out...look at those who got out on the down grade from macquarie in regards to GTP last year and look now and look which major players accumulated and became major share holders.

I know of great investors who are very careful and highly successful in their choices and of late they have gone into GTP as well with no intention of selling longterm.....even investorweb research reports have a buy on GTP and they have a very credible record.....sell at your own peril Mick


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## savtin (21 May 2006)

I totally agree with you analyst and abucs........GTP is moving in the right direction.............when i had spoken to management earlier in the year the one thing they kept telling me was that their key focus in the immediate future, apart from the obvious of growing EPS is to get the market to re-rate them in the short term...........remember if they don't do anything with their earnings .i.e stays at 43 cents per share and the stock is re-rated to a higher P/E ratio (say 12 - 13)then the SP goes up to $5.17-$5.55................and add the earnings growth of say a EPS (diluted of 48-49cents) then the SP is around $6-$6.30....

I think over the next few years the focus will be on quality of earnings and the emphasis on GTP as a funds manager.......

controlled growth they have forecast previously ........and if this means capping the plantation sales to say $350-$400 million so be it and then growing the income products so that the mix is %50 - 50 that would be great.....

p.s i still feel that John Young has not yet revealled his trump card....

GO GTP


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## abucs (22 May 2006)

i'd be happy if he has an ace or two up his sleeve also Savtin.

Did you contact GTP directly Savtin ?  Are they open to that sort of thing ?

I've spoken to some GTP officials in the past when they bring their roadshows to Sydney.  I wouldn't mind contacting them for info on a regular basis if they are up for it.

I found John Young a hard man to get hold of at those roadshows but when i cornered him once i found him very passionate about the company and was impressed by his overall demeanour.

He didn't reveal that trump card to me though.    )


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## abucs (24 May 2006)

http://www.bordermail.com.au/news/bm/local/239318.html


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## savtin (27 May 2006)

Hi Michael,

I have been chatting with investor mates of mine and collectively we have come up with the following REVISED sales figures for GTP (forecast guesstimates at best ......could end up being a mile off)..........but there are several mates of mine that chat with the managers of GTP now and then and these estimates are based on what they say now and then..............

1. Timber plantations -  It has been said that the product is selling very well however due to the increase in capex for the land they really want to see CONTROLLED growth in this product and increase the income products to 70% 30% ratio this year....therefore i would only expect a modest increase in sales for this product.....i wouldn't be suprised if they announce to the market well before the JUNE 30 cut off that they have capped the sales for this product....therefore say $108 million first half and  + $217M  = $325M (They actually prefer this type of growth) 

2. Vineyards - Based on a 500 Ha projection = approx $38 Million they are expecting more from the cattle product to offset the viticulture product. The minimum is 300 Hectares. For obvious reasons I think that they are only selling the vineyards that have contracts with them.. expect modest growth here.

3. Olives - based on 740 hectares = $ 59 Million could go as high as 64Million based on 800 Ha  selling well.

4. Cattle - $40-50 million may also go as high as $60 million.

This gives us a total sales figure of $325 Plantations and $145 million other than plantations = $470 million ...... which is more than the estimate of Macquaries Report which had stated $400M.

Note also that the proportion of the "other than plantation" is now 30% similar to what they forecast at the AGM of up to 30%.

Now the recoginsed revenue for the year will be as follows:-

1. plantation (recognised say 48%) = 325 x .48 =156
2. vineyards - (recognised = 90% a figure i got from GTP) = 38 x .9 =34
3. olives ( recognised = 70% same as above) = 59 x .7 = 41.3
4. cattle (85%) = 50x .85 = 42.5
5. deferred revenue of $150 m

therefore we have the following project revenues: 
156+34+41.3+42.5+150 = $424Million add the other revenue (interest, finance and fees)as per last year say another $25 million and this gives us Project Revenue of $451Million (41% increase on last years figure) Subtract the top up of earlier projects say $2.3Million  == total project revenues of $446million

profit = .389 (similar margin to last year) x 446= $173 million  (up 40%) 

Their EPS was affected last year due to the acquisition of the two companies
Environmest and the Tiwi Island Plantations as they issued more shares resulting in the dilution of the share registry. It is a short-term pain for a long term gain. they have approximatlety 309Million shares and with the new TREES3 (which can be converted in the future) some analysts would include these shares in the diluted EPS so i think it is 367million diluted shares....therefore my forecast EPS would be basic EPS 173/309 = 56cents ad diluted would be EPS = 173/367 = 47cents per share.



As a worst case scenario I have calculated the following sales figures based on minimum sales forecast figures - 

1. Plantations - $315 million..capped to same figure last year.
2. Vineyards - $34Million
3. Olives - $45Million
4. Cattle - $40 Million 


Total sales =  $434 million and still greater than $400 million.  

GO GTP


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## michael_selway (2 June 2006)

savtin said:
			
		

> Hi Michael,
> 
> I have been chatting with investor mates of mine and collectively we have come up with the following REVISED sales figures for GTP (forecast guesstimates at best ......could end up being a mile off)..........but there are several mates of mine that chat with the managers of GTP now and then and these estimates are based on what they say now and then..............
> 
> ...




Thansk mate, here soem good news that may have be the reason behind recent days rally

Date: 31/5/2006 
Author: James Dunn 
Source: The Australian --- Page: 8-9 

The agricultural managed investment scheme companies listed on the Australian sharemarket are worthy of consideration. These include Great Southern Plantations, Gunns, Timbercorp, Willmott Forests, Forest Enterprises Australia, and Futuris subsidiary Integrated Tree Cropping. Shaw Stockbroking research manager, Brent Mitchell, is of the opinion that the sector remains undervalued. Mitchell said managed investment scheme stocks remain discounted on the grounds earnings could be subject to tax changes, but noted there will be no change to the tax treatment of the investments until at least 2008


----------



## abucs (3 June 2006)

Savtin,

do any of your investor friends have a comment regarding any proposed plans for the dual use of land for cattle and timber investments ?

Interesting info in the link below including the info that in what they call the more 'mature' markets of the US and the EU somewhere between 5 and 7 percent of funds under management is in the agribusiness sector whereas in Australia it is currently less than 1 percent.

http://finance.news.com.au/story/0,10166,19316488-14302,00.html


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## savtin (7 June 2006)

Hi Abucs and Analysis,

Did you see the latest ASX announcement regarding the shift of end of year financial reporting for GTP to 30th Sept 2006 from june 30, 2006.

This is good news as it will shift the end of year 3 months and give them a higher percentage of revenue recognition. It will finally explain to the market that their business model is chANGING ( similar to TIM) where they will have more annuity style revenue from their non-forestry products.... and have revenue spread more evenly throughout the year rather being reliant on MIS sales at the end of the year.

My take is about time...remember this company is attempting to explain to the market the direction they are heading and hence have the market re-rate their P/E rating....

Just look at TIM it has a p/e of 16.45 and we (GTP) has a p/e half that, with approx. double the profit (earnings) capacity. Don't get me wrong i think TIM is a great business have some stock in them too. Bought them when they were 70 cents. ...but it is about time this company was re-rated positively by the market.


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## suhm (7 June 2006)

Hey all,

I own both as well, GTP is quite frustrating, seems to get vertigo every time it gets into the $4 range.

suhm


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## abucs (7 June 2006)

Yeah, it seems to have Institutional support up to $4 and then it stops.  
Lately it has been falling on very small volumes, but the buying has drieds up for the moment.

I'm glad you're happy with the change Savtin.  I'm only guessing but it would seem to take a bit of pressure off the worries about sales up to 30th June and hopefully stop the yo-yo effect on the shareprice.  I hope you are right about the income products.

With the change in accounting periods and the smaller recognition of sales to the current period, there was always going to be a one off year where sales would 'appear' to be less than it otherwise would.  With the AGM reports pushed back up to 3 months this 'one off' will be dealt with much more transparently and not cause any great panic on the shareprice as we will have a smaller figure for the usual 12 month period but then a large one reported for the Jul - Sep period allowing meaningful comparisons with last year.


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## michael_selway (7 June 2006)

abucs said:
			
		

> Yeah, it seems to have Institutional support up to $4 and then it stops.
> Lately it has been falling on very small volumes, but the buying has drieds up for the moment.
> 
> I'm glad you're happy with the change Savtin.  I'm only guessing but it would seem to take a bit of pressure off the worries about sales up to 30th June and hopefully stop the yo-yo effect on the shareprice.  I hope you are right about the income products.
> ...




thats what i thought, this recent ASX correction may have impacted on their sales as people will have less gains or even losses, thus no need to buy MIS schemes etc

thx

MS


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## abucs (14 June 2006)

A very large after the 'after the bell' trade today for over $1.8 million.
We may find out tomorrow how well the income products have sold with the cattle, olives and vines products closing for this FY.


----------



## savtin (14 June 2006)

yes but was it someone selling or buying?


----------



## savtin (14 June 2006)

Abucs,

The following is the last few trades......can we tell if the last was a buy or sell......i mean i know that for every buyer there is a seller but due to the lower price taken does that mean it was someone wanting in or out???

Price	Volume	Value	Conditions	Attributes	BuyXRef	SellXRef
3.8176	478009	1824847.15	SP	O		
3.85	4589	17667.65		F		
3.85	1970	7584.5		F		
3.85	8672	33387.2		F		


cheers
savtin


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## abucs (15 June 2006)

Hi Savtin, Michael, Analyst etc.

I don't know about these things Savtin.

Because of the large volume after normal trading i would guess it was all set up beforehand.

Perhaps it was a weighted average for the trading day or week or month etc or perhaps a small discount to such a scenario?

Seeing the price up today seems to suggest that it was not a negative occurrance.

Just me guessing though.

Hope to get good news today or tomorrow with the income prduct sales.


----------



## savtin (15 June 2006)

Hi all GTP holders,

speaking to a friend of mine, he has heard throught the big grapevine that  the cattle projects have sold out at capacity (don't know exactly what that is but it was about 11000 droves i think), olives did well and wine did it tough, but i think met the minimum of 300 Ha (= 6000 lots).  if he is right then we could at least get the following:-

cattle - say capacity $55 million
olives (more than minimum) say $40 million
wine (say at minimum) = 24 M

total non-forestry of $119million ( up 138 % on last year) 

if this is correct that would be a great result. to achieve $400 million they would only need another $281 million in plantation sales and i think they'll achieve that.

anyway fingers crossed the market receives the sales  well.................otherwise down she'll go. 

if the volume and the price action of the last couple of days is a hint then it could be all right.

regards

savtin

p.s what do others think?

p.s.s i would be very interested in what others were EXPECTING for the sales of non-forestry products.....

p.s.s me personally in todays bearish markets i would be very happy with anything over $100 million - which would equate to 100 % growth on last year.


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## abucs (15 June 2006)

I thought the vines product would not go so great with the present industry climate but am pleased to hear the news with the cattle.

If it is $55 million then apart from the captital injection, it comes out to be a good income stream for the next 7 years.  The cumulative effect of 5 or 6 years of sales for this will be colossal.  This together with the vines, olives and land rotation should underpin at least a tripling of the dividends within 5 years.

I think the timber sales will be another record year from other companies reports from the same industry.


----------



## TheAnalyst (16 June 2006)

we may find tha gtp board is onto buying wheat and other cereals lands that can be used for ethanol or if oil drops in price wheat sales and also involved possibly in ethanol plant construction as well through MIS's.


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## michael_selway (16 June 2006)

savtin said:
			
		

> Hi all GTP holders,
> 
> speaking to a friend of mine, he has heard throught the big grapevine that  the cattle projects have sold out at capacity (don't know exactly what that is but it was about 11000 droves i think), olives did well and wine did it tough, but i think met the minimum of 300 Ha (= 6000 lots).  if he is right then we could at least get the following:-
> 
> ...




Hi Satvin, whats your forecasts now for 30/06/06, new annoucement out

Thx

MS



> Australia’s leading agribusiness manager, Great Southern, (ASX code: GTP) is pleased to announce that it has now closed its 2006 Agribusiness Income Projects. The Great Southern Beef Cattle, Winegrape and Organic Olives 2006 Income Projects have together raised in excess of $143 million in sales in the current financial year.
> 
> This represents an increase of approximately 180% from the $51 million raised in non forestry income projects last year.
> 
> ...



http://www.corporatefile.com.au/documents/OB/MD on Sales and Outlook 16.06.06 .pdf


----------



## savtin (16 June 2006)

I personally have given up on this stock ......................so upset.


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## TheAnalyst (16 June 2006)

Hi Satvin

Why are you upset for and giving up on the stock??

The latest announcement was really good as it has confirmed that management is diversifying and ready and focusing on consistent earnings and growth and an increase in dividend as well...this is really fantastic as it aint a one or two stock wonder say like sen and some of those singular resource stocks this is a real company with real fundamentals so just be patient and wait for the per revaluation.


----------



## savtin (16 June 2006)

It didn't look like the market liked it.......it was the statements about lower profit margins and lower profitibilty that spooked alot of people...........

I read the announcement and thought it was very good ..........to be honest if they had realesed the sales figures as per previous years.....i.e sales increase by 180% and left it at that the SP would now be at $4.34 instead of $3.62..............................

Speaking from a purely technical manner, if the $3.50 support does not hold I think this stock will head back to $3.20...............i don't see this happening but i will be looking closely.

if support holds an upward rally will ensure...

i wonder who was doing all the selling today...


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## Julia (16 June 2006)

savtin said:
			
		

> I personally have given up on this stock ......................so upset.




Didn't think I'd ever hear you say this, Savtin!

Certainly was an ugly drop today.

Julia


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## pch (17 June 2006)

Maybe its the Jim Beam I've been drinking tonight talking, but I see some parallels to iiNet here (stay with me here 

They have gone through extroadinary growth and have acknoweledged increased costs and complexities of running the business. What we don't know yet is whether they make the same mistakes as iiNet and don't improve their 'business processes' along with the investment in tools and technologies required by their growth.. Many, many companies stumble at a certain 'critical mass' because management simply lack the experience in dealing with that critical mass.

I used to work (as of today  for a company that went from 3-100 staff in 4 years so I directly know all about immature business processes  

I think personally iiNet is a classic case of management not coping with the transition of the business from small player to 2nd or 3rd largest ISP in Oz..

Back to GTP.. So even based on a presumption of overrated management (and most management _is_ overrated), $4 to me is a reasonable figure. Perhaps the market is not convinced on the ability of management to deal with the complexities derived from an increasingly diversified business?

But.. I think if you presume that management do reassure the market that they can manage this transition of focus, and the government doesn't screw with things taxwise, the raw numbers still look great..


----------



## savtin (17 June 2006)

Hi Julia,
Don't get me wrong Julia, I still value the company highly. It is not everyday a company can boost 180 % growth in sales. What i am pissed off with is that the market ---which collectively prices the company (in the short term)........... just doesn't agree with my own assessment. 

I am not about to wait to see the companies share price drop or end up in the doldrems like it did for the last half of last year..........I'll want a shift in price momentum and hope that market sentiment changes.

regards
savtin.....

p.s it seems the company needs to communicate more effectively there business strategy to the market because the market is hearing but not listening.....  

p.s.s i guess i am starting to sound like you probably did just before you decided not to let emotions rule your investment/trading strategies.

p.s.s.s well this has been a lesson to me..............NEVER FALL IN LOVE WITH A COMPANY.....well i have certainly learn my lesson hard....believe me it was absolutely heartbreaking to see the stock price move counter to what i was expecting after reading there sales report......i thought anything over 130 would be absolutely fantastic and whoooo $143 million........i couldn't believe it......then to see the selloff............................ah well........


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## TheAnalyst (17 June 2006)

Hi Satvin

It is a disappointment but remember it has a per of 8.....so no real concern but an increase in the divvie would really help.


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## suhm (17 June 2006)

makes you wonder what sort of figure they were expecting cause 180% increase in revenue for a company with a per of 8 is fantastic to me or maybe the comments about the plantations was a bit worrying who knows


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## abucs (17 June 2006)

http://www.abc.net.au/news/newsitems/200606/s1664609.htm
http://www.wabusinessnews.com.au/en-story.php?/1/39766/Today-s-business-headlines
http://www.wabusinessnews.com.au/en...hern-raise-143m-in-agribusiness-project-sales

Say $500 for each cow and 12,000 hectares of timber land at $2,500 is around the sale price of $53.5 million.  

The Mitchell river goes through the property and deposits trillions of gallons of fresh water each year into the sea at the Gulf of Carpentaria.
So with the ongoing cattle business, plant and equipment, personell, room for irrigation works and dual use of land for timber it seems like a good deal to me.

Also if 20,000 of these cows can be used in the next couple of years in investment droves, this will raise $25 million in of itself.

I think some reason for the shareprice drop is the flagging of a company imposed ceiling on timber plantation sales of 35,000 hectares and also the talk of increasing debt and creating a land fund raising.  As mentioned before, i believe it's all about cashflow and  have no arguements with any of this.


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## savtin (17 June 2006)

Hi Suhm and Analyst,

Capping the plantation sales to around the $310 million mark will be a good thing , less capex required required especially until they get their rotation going........their aim is to grow the non-forestry to the same level i.e. $310 M  which would be $ 620 million in total within 2 years....after that they intend to expand their income projects .........this will lead to a large ANNUITY revenue which they can then increase their dividend substantially to at least 75%  which should then equate to about 35 - 40 cents per share   ............ during this transition the company is hoping that the P/E will shift to the norm of 12-14 -----------a share price of $7-$8 with a grossed up yield of 7% not bad..............................the problem is:  that is the objective ..................however the market has only to realise it.


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## TheAnalyst (18 June 2006)

Hi Satvin

See...now your talking sense friend......this company is on track to become a permanent member of the top 100 - 50 asx companies in the next 2-3 years and based on great fundamentals and stable earnings and growth.....and in bad times presently being set up to ride different economic cycles and retain divvie payout....this company is not like single commodities stocks and I.T. companies that rely on a single cycle or product such as sen, mgx, bdg and others.....if the share price falls another 10% that a per of 7.2 and how can that be justified when forrest Australia trades at a per of 8 and gunns at 12.......just beware and dont be nervous of the volitility at the moment...its just shaking you and there is no profit downgrade as well......i must admit i trade the stock regulary but i am also aware that this thing can shoot up so fast with great unpredictability and leave me behind so i am very careful and always hold some just in case.


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## Julia (19 June 2006)

The following is from FNArena today:

GTP - GREAT SOUTHERN PLANTATIONS LIMITED 
Macquarie rates the stock as Downgrade to Neutral - The analysts have downgraded their recommendation on the stock to Neutral as they are worried about the increase in the cost base and in capital expenditure. 
They expect the stock to remain volatile as many cost factors are out of its control and due to the fact that sales are concentrated in the month of June. 


Julia


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## savtin (19 June 2006)

Gees I am glad I got out of this at $3.80 - $3.83 on Friday...with a nice profit.

I still believe in the longterm picture and will be back when senitiment turns. To many uncertainties in the SHORT term....very pleased with their sales results. I knew when they were considering capping the timber sales the market might respond negatively....pain now for longer term gain.

Will definatley be back when tide turns..........and it will i am certain.
Great stock fundamentally.  Technically it looks worrying...........I hope $3.20 holds I truly do.

Regards
Savtin

I


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## michael_selway (19 June 2006)

savtin said:
			
		

> Gees I am glad I got out of this at $3.80 - $3.83 on Friday...with a nice profit.
> 
> I still believe in the longterm picture and will be back when senitiment turns. To many uncertainties in the SHORT term....very pleased with their sales results. I knew when they were considering capping the timber sales the market might respond negatively....pain now for longer term gain.
> 
> ...




Hi yeah i was out too at 3.80 a while ago, its 3.11 atm as we speak

if it goes down to 2.5 might be a good ST buy

Btw satvin what do u think of TIM? it seems to be doign well

thx

MS


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## TheAnalyst (19 June 2006)

Julia said:
			
		

> The following is from FNArena today:
> 
> GTP - GREAT SOUTHERN PLANTATIONS LIMITED
> Macquarie rates the stock as Downgrade to Neutral - The analysts have downgraded their recommendation on the stock to Neutral as they are worried about the increase in the cost base and in capital expenditure.
> ...




Macquarie did the down grade last year and got it wrong...they downgraded it to a sell....so now they are downgrading it from a sell to a neutral...isnt that an upgrade????????.....macquarie seems to have schitzophrenia and can never seem to make up its mind or is it they dont have control or are so big they dont know what each other department is doing??


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## michael_selway (19 June 2006)

TheAnalyst said:
			
		

> Macquarie did the down grade last year and got it wrong...they downgraded it to a sell....so now they are downgrading it from a sell to a neutral...isnt that an upgrade????????.....macquarie seems to have schitzophrenia and can never seem to make up its mind or is it they dont have control or are so big they dont know what each other department is doing??




The thing i dont like about Maquarie sometimes is the bias towards stocks they have underwritten or lent money to etc etc

eg HSP and GTP comes to mind

thx

MS


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## TheAnalyst (19 June 2006)

Have they downgraded gns and fea and a list of others as well??? lolol


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## TheAnalyst (19 June 2006)

Well i will be.....lolol.....guess which installment warrant and all 20 million expire on the 30 June 2006...GTPIMR and guess who was the issuer???non other than our friends MACQUARIE who downgraded gtp to a sell last year then came back and downgraded it to a neutral from a sell(upgrade)...still never published that they all of a sudden had upgraded it from a sell to a buy at any stage inbetween....leave it up to u's to decide.....


GTPIMR
Description: MACQUARIE 275 GTP INSTALMENT WARRANT 29-JUN-06
Type: Call warrant
Issuer: MACQUARIE BANK LTD.
Commenced Trading: 25 Oct 2005
Expiry: 29 Jun 2006
Exercise level: 2.750 (expressed in $ or index points)
Warrants per underlying instrument: 1.0000
Exercise style: American
Warrants issued: 20,000,000

Download the Product Disclosure Statement 539KB*

*PDF documents require Adobe Acrobat Reader.
Supplementary disclosure documents will appear at the front of the main document.


Ex Price amended from $2.50 to $2.75 on 8/12/05.


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## abucs (19 June 2006)

Hi Analyst.

yes i have been thinking about this also.
If you look at my post #135 on 6 Jan, nothing seems to have changed - 

"TheAnalyst, how do your hot warrants work ? Is there any incentive for the institution to keep the price down as they expire, or would they prefer a higher price ? I noticed that the share price dipped a couple of weeks ago when the warrants expired just before the latest rise."

I wish i had the power to control stock prices and get all the sheep to put money in my pocket.  Look at the buying being done now after the bell.  A few extremely large buy orders and lots of smaller sell orders.

As for whether Macquarie is right or wrong with its analysis i refer you back to my posting #223 on 6th March.


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## abucs (19 June 2006)

http://www.abc.net.au/news/newsitems/200606/s1665934.htm


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## TheAnalyst (19 June 2006)

*Re: Great Southern Plantations*



			
				abucs said:
			
		

> The Macquarie Bank analysis on GTP's website explains much of the nature of the business and especially cashflows.  It is dated 8th December but the only thing that has changed since that date is another 50% plus increase in revenue. It's good to read independent analysis of the company but everyone should have their own idea on what a company is worth.
> For example, Macquarie previously said GTP was worth high $3 mark and then $2.80 and then $3.80 and now somewhere between $4.10 and $4.34 or so.  The market reacts each time while the underlying business stays much the same. I remember when GTP went down to 35c and there wasn't one broker who recommended it, but quite a few that put out the big STAY AWAY and AVOID signs.  Then when it went on the big meteoric rise they were all telling us to get on it and how a stock like this "comes along only once in a generation".  I think the latest weakness is to do with the cashflows and the impact of this on paying dividends.  GTP in its latest presentation has capital management and cashflows as their main theme which is a comfort to me.  I am happy to hold on the underlying strength of the business and have bought more in periods of weakness.





Spot o abucs.....no profit downgrade.....company managed well and on track to grow......warrants at expiry like last time....buying was as strong as the selling at the end of the day.....fundamentals have not changed......same time same bat channel.....


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## TheAnalyst (19 June 2006)

I was thinking that we as shareholders can take a class action against the directors of GTP if they continually donot pay a reasonable dividend especially when the directors are able to do so as it is continually profitable...we can use the Sanford v Sanford courier Service Pty Ltd common law case where the company has consistently been profitable but has not paid an appropriate dividend and the court ruled that this was oppressive to the members.

We can first get 5% of current shareholders who want an increased dividend and let the directors know and the directors will have to call a meeting of shareholders to put forth this special resolution and if the directors refuse then they will finally have to put forth the reasons why the dividend payment is always maintained so low when it does not have to be and from their we can take the class action.


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## Julia (19 June 2006)

TheAnalyst said:
			
		

> Macquarie did the down grade last year and got it wrong...they downgraded it to a sell....so now they are downgrading it from a sell to a neutral...isnt that an upgrade????????.....macquarie seems to have schitzophrenia and can never seem to make up its mind or is it they dont have control or are so big they dont know what each other department is doing??




Analyst:

I didn't say it was Macquarie who issued that forecast.  I can't remember who it was now.  All I said was that it was part of today's FN Arena's Broker Call.  I may have been Citigroup, not sure, but I am sure it wasn't Macquarie.

I sold my remaining shares today.  Traditionally this has been the best time of the year for MIS stocks.

Savtin

 Congratulations:  you seem to have broken off your devoted relationship with GTP!  (I mean that genuinely, not sarcastically as it may sound).

Cheers
Julia


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## Jackob (21 June 2006)

Julia, Analyst,

Both of you should be congratuated!  GTP is going lower and lower and lower ...


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## Julia (21 June 2006)

Jackob said:
			
		

> Julia, Analyst,
> 
> Both of you should be congratuated!  GTP is going lower and lower and lower ...





Thanks for that Jackob.  Once I've sold something, I never look at the price again so as to avoid the syndrome of "oh, if only I'd waited.......", so it's good to have the decision reinforced.

Julia


----------



## Jackob (21 June 2006)

GTP ... rising sales and revenue ...  rising profit and eps ...  target price $5+...  

not too many people seem to believe these any more.


----------



## savtin (21 June 2006)

Hi Analyst and other GTP Holders,

I am currently out of this stock until it settles and we get a better picture of where this is going. From people i have spoken to i have the following things to add:-

1. Some people are stating that their was no official "profit downgrade" made from the company, but from what i have been able to gather is that the comments from J.Young regarding "increases in costs" and lower profit margins and the impact from the revised accounting standards means that some have taken it as an unofficial profit downgrade from what some anaylsts had allowed for..........i mean the more than 180 % sales increases in income products will help.......

2. It is interesting because Macquaries equities had a Sales figure of $400 million and GTP will end up with about $450 million this should i believe nuetralise any downside from cost blowouts. Therefore the profit figure should still be a RECORD $150 plus so i don't know what the fuss is about.....

3. From what i understand,( now this is speculation and i will try to find out more) the.......real impact from  changes to the land valuations to AIFS may affect the EPS badly.............some are predicting a downward revision to EPS which may mean that EPS becomes much less than the 45 cents per share flagged by analysts.............now afcourse last years results will have to be changed to but if for eg the EPS changes to say 30 cents or 25 cents per share then this may affect the SP outlook........... i am not sure but will definatley look into it.........

4. Until i can resolve some of the above issues i will stay on the fence....but i am getting withdrawal symptoms and want to get back in......but i need to get some answers first...

below is the report by Macquaries after the sales figures were released........ 


From Macquarie:
_
"Great Southern has announced non-timber managed investment scheme sales of $143m for 2006. This is up 180% on last year's $51m. 

The company also stated that earnings per share growth will be "modest" due to a "substantial" increase in the cost base. 

In other news, Australian Agricultural Co. (ASX: AAC) announced Great Southern has purchased Wrotham Park cattle station for $53.5m. 

Impact 

Sales strong. This sales result is strong. If timber sales remain flat on the same period in the previous year (current Great Southern expectations), total managed investment scheme sales will be $450m. We have upgraded our managed investment scheme sales numbers from $402m to $420m. 

Earnings per share forecasts reduced. The earnings per share guidance makes earnings per share growth of approximately 5% likely. We had previously forecast 9.7% earnings per share growth. The continuing growth in the headcount and cost base of the business is concerning. 

Cattle station acquisition increases capital expenditure. The acquisition of Wrotham Park now means Great Southern has purchased three cattle stations for $112m over the past two months. We had previously assumed limited capital expenditure for the cattle product, as most land was to be leased under original plans when the Environvest project was purchased last year. This change in strategy has affected cashflow. 

In addition, we have increased our land price assumption from $6,000/ha to $7,000/ha, which adds $20.25m to the annual capital expenditure bill. This is mixed news for Great Southern, as the cashflow impacts are offset by the increased value of the landbank. 

Second Government inquiry is a concern. This inquiry was announced at a doorstop interview by the Federal Agriculture Minister on Wednesday, and is focused on the potential distortionary effect the managed investment scheme industry has on traditional agriculture. The inquiry is concerning, as it is the second Government-sponsored inquiry into managed investment scheme this year. 

Earnings revision 

Earnings per share: 2006 -4.7%; 2007 -6.2% on increased overhead assumptions. 

Price catalyst 

12-month price target: $3.55 

Catalyst: Improvement in free cash flow generation driven by land recycling, product restructuring and increased securitisation. Any tangible evidence that 2006 sales volumes are likely to be maintained at or above 2005 levels will be a major catalyst. 

Action and recommendation 

Reduced to neutral. Great Southern is likely to remain a volatile stock, given the concentration of sales in the month of June each year and the impact of factors outside the company's control. The rise in the cost base and capital expenditure is our major near term concern. "

These conclusions might be reasonable with a P/E of 15 or 20 but not with a P/E under 8. Too early to see how the cattle businesses are going to go_


----------



## michael_selway (21 June 2006)

Jackob said:
			
		

> GTP ... rising sales and revenue ...  rising profit and eps ...  target price $5+...
> 
> not too many people seem to believe these any more.




Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 45.9 54.0 58.7 
DPS 14.0 14.0 19.0 18.0 

was before

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.4 58.1 63.8 
DPS 14.0 14.0 19.0 18.0



> Downgrade to Neutral - target $3.55
> 
> The analysts have downgraded their recommendation on the stock to Neutral as they are worried about the increase in the cost base and in capital expenditure.
> 
> They expect the stock to remain volatile as many cost factors are out of its control and due to the fact that sales are concentrated in the month of June.




thx

MS


----------



## savtin (21 June 2006)

By the way ANALYST,
macquaries had downgraded the stock from an outperform(buy)  to neutral.....just recently......


----------



## TheAnalyst (21 June 2006)

Below is part of an assignment i did this semester in Corp accounting that new IFRS challenges bring...


Volatility & Account Users
Lack of skills and knowledge on interpretation of new IFRS’s has created concern on whether for example an investment is a good or a bad thing with reliance on further explanations to complex reports and there interpretation.

With the adoption of the AASB’s now fairly mainstreamed  in the use of retained earnings, it will not automatically cause the fundamental models that company shares are priced on to change without causing any real visible change in company share prices. Users of statements would voice their concern if volatility affected the values of their investments negatively.




Discussion of New Standards
Impairment

AASB 136 Impairment of Assets replaces AASB 10 Recoverable amount of Non-Current Assets. Entities are now required to test for impairment of assets held at either “cost” or” fair value”. An entity determines either external or internal applicable impairment indicators to measure an asset for impairment and if its existence is indicated the entity will measure the recoverable amount of the asset then recognise and measure the impairment loss and also reverse an impairment loss if relevant, as well as disclosing impairment information.

AASB 136 defines recoverable amount as the higher of ‘fair value (less cost of sale)’
and its ‘value in use’  AAS 10 defines recoverable amount as the net amount that is expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal. The new AASB 136 definition differs from the existing definition as it includes the fair value measurement in the calculation of recoverable amount. Also under AASB 136, ‘value in use’ must be calculated using discounting where as discounting does not have to be performed under the AAS 10 definition of recoverable amount. As ‘value in use’ will have to be discounted, this will result in a lower recoverable amount meaning that for-profit agencies will realise more impairment loss write downs.

An impairment loss on an asset valued at cost is recognised in profit and loss and is also an alteration to the deprecation account and in relation to an asset that has been re-valued is a decrement and can be offset against its particular asset revaluation reserve to the degree that the reserve is larger than the loss.

A reversal of an impairment loss in relation to an individual asset or cash-generating unit with impairment losses previously recognised need to be reversed where the recoverable amount has increased and is recognised in the profit and loss in the year  the loss is reversed and cannot surpass the amount that asset would have been carried at had the asset not been initially impaired and written down as well as being treated as a revaluation increment However, an impairment reversal from the unwinding of the cash flow discounting due to the course of time is prohibited. In regards to a cash-generating unit loss reversal it is allocated on a pro rata basis to each individual asset, based on the assets carrying amounts and the lowest level of aggregation that generate largely independent cash flows.

AASB 136 states that a cash-generating unit is a group of assets that together produces output for which an active market exists. The former AAS 10 requires that the lowest level of aggregation for impairment testing be a class of assets. AASB 136 introduces the new concept of ‘corporate assets’. Corporate assets do not generate a separate cash inflow but are needed for the effective running of an entity. AASB 136 is more extensive than AAS 10 in determining when an asset should be included in a group of assets for impairment testing. Paragraph 2 of AASB 136 also sets out assets that are exempt from application of the standard such as inventories, biological assets, deferred tax assets etc however standards covering these do contain some impairment requirements


----------



## TheAnalyst (21 June 2006)

Reduced to neutral. Great Southern is likely to remain a volatile stock, given the concentration of sales in the month of June each year and the impact of factors outside the company's control. The rise in the cost base and capital expenditure is our major near term concern. "

These conclusions might be reasonable with a P/E of 15 or 20 but not with a P/E under 8. Too early to see how the cattle businesses are going to go quited from Satvin Macquarie downgrade to nuetral

Its not concerning seeing mac had a sell on it a year ago...then a buy and now a neutral all because they cant get it right......lucky it aint SEN or else it would be really gone hehe....u may find that macquarie's controlled subsidiaries and associated entities have been accumulating....


----------



## Jackob (22 June 2006)

TheAnalyst said:
			
		

> Below is part of an assignment i did this semester in Corp accounting that new IFRS challenges bring...
> 
> ... Users of statements would voice their concern if volatility affected the values of their investments negatively.  ...




Analyst,

How could we shareholders voice our concern if volatility had already affected the values of GTP shares by AIFRS?

The GTP headquarter told me over the phone that under AIFRS the total value of the land for new projects will be written down by 60-90% and that this loss will goes into the 2005-2006 FY Profit and Loss Account. 

So IMHO how much profit would be left in the account is only a matter of everyone's imagination.

How can we complain?  And why doesn't GTP complain?!


----------



## TheAnalyst (23 June 2006)

Jackob said:
			
		

> Analyst,
> 
> How could we shareholders voice our concern if volatility had already affected the values of GTP shares by AIFRS?
> 
> ...





Hi Jacob

That does not make sense that the land will go down by 60-90%....if they just bought the land how does it go down immediately???  Could you please explain a little more....as what I am saying is that once investors realise that these book entries are just that book entries, then users of reports will realise that this type of entry is not the type of entry that should be regarded in the  valuation and measuring of profit......it has now become quite complicated and shows how dreadful the Australian Accounting Standards Board behaviour is...meaning that company financial reports should be able to be read at least by a user with some knowledge but now they have implemented a procedure that users without degrees and relevant qualifications will have to rely more heavily on those who have the qualifications unless of course like yourself you have the experience to interpret what has happenned.

I am starting to be inclined that GTP took a drop because of the shift to september to be the end of its finacial period or year.


----------



## markrmau (23 June 2006)

Hey gtp holders. Take your tax losses (or gains if you bought at right time) and jump into FEA.

Results are going to be an absolute cracker


----------



## watsonc (23 June 2006)

Why will results for FEA be a cracker??? There was a substantial buy in on the 6th of june!


----------



## Jackob (23 June 2006)

Hi Analyst,

The value of all lands newly leased to investors will be written down by 60-90% under IAFRS due to their status of *encumbrance*, or say because the lands will be occupied by the investor for 10-20 years and will not be available to the owner for any other uses or for sale.  

Say a block of land worth $1000, and it has been leased out for ten years, so this $1000 amount of money will only be available to the owner in 10 years.  Thus the *present value* of the land according to IAFRS should be calculated by the method commonly known as "discounted cash flow".  Assuming the discounted rate is 9% p.a., the present value of the land would be $1000*(1-9%)^10=$389, or say totally discounted by 61.1%.

On the other hand, during the whole lease period, the "present value" of this piece of land will grow by 9% pa, and at the end of the 10-year pereod, the full value will recover.

*Disclaimer:  I am no accountant and the above understanding/calculations may be totally wrong.  I disclaim any responsibility to them.
*


----------



## pch (24 June 2006)

Thats exactly right Jackob and painful though it is, it is probably a fairer reflection of the true state of the asset anyhow.

But what cannot be ignored is this land that GTP own will be a major strategic asset in the future. Its not something that a competitor can simply jump in on, as it is a finite resource. (So, making a dodgy comparison to Engin for a second, anyone can produce a VOIP box - but you can't just produce thousands of acres of prime agricultural/plantation land). 

As a long term play (and i don't sell anymore cos my market timing isn't that great), I think those assets, and the ability to extract revenue and profits from those assets should not be underestimated. 

In the short term, who the hell knows how low it will go  In some ways, I think of GTP as an investment in land, not a stock.

By the way, where did you pull the discount rate from? Is that based on the expected appreciation of the land value during this time period?


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## Jackob (24 June 2006)

Hi pch,

The 9% p.a. discount rate was just pulled out of from the top of my head!   :   But it matches the 60-90% total discount range given by GTP (if the project life period is 23 years then the total discount would be close to 90%).  

A bit more seriously, this discount rate should be about the same used in the *"Discounted Cash Flow" (DCF)* method to calculate share prices.  It should be a bit higher than the interest rate of the company loans.  Last year GTP's TRESS-3 bears a 7.75% p.a. interest, so a 9% discount rate sounds OK.

Just as you said this discounting calculation is probably a fairer reflection of the true state of the assets.  People certainly agree - so why we are now having it.  In an extremely long-term (10 years at least I reckon after GTP stops growth) the written-downs and written-ups of the land value can be cancelling each other, but in the short term, the effect would be horrendous.

*Disclaimer: I am no accountant and the above understanding/calculations may be totally wrong. I disclaim any responsibility to them.*


----------



## pch (24 June 2006)

I use 11% as my default for stocks to be on the conversative side and go as high as 15% for the higher risk stuff on the advice of a learned friend 

But what the formula doesn't outline is that the original $1000 asset has appreciated in value and in 10 years may be worth $1800 and not the original $1000. 

I would think that this would improve the NPV but since you can't predict future land values with any certainty, I assume they would revalue the land each year, and therefore although the first year sucks, it may well improve quicker than your example? 

Makes the formula a little more complex doesn't it.. But at least we as investors can make assumptions on future land value and assume the increased sell price when doing the NPV calculations.

Damn its times like this I wish I had an accountant in the family..


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## Jackob (25 June 2006)

Hi, pch,

I am a bit surprised to know that the rural land value could increase by 80% in 10 years, or 6% p.a.!  If as you said the DCF discount rate should normally be 11-15% p.a., then I think it is possible that the 9% p.a. discount rate for the new land has take the land revaluation into account already.  For the old land, the revaluation under IAFRS then should be (9% + the land price increase rate) * its “present value”.

I am also not too certain how to view the role of the land value increase played in GTP’s value.  I understand that all property prices are ultimately determined by the profits they can make each year.  Say a house price is largely determined by the rent it collects.  If the rent increases then the house price follows.  In the case for GTP, the total revenue is the sale of the MIS schemes, of which the price never changes (E.g., for a woodlot of pulp-trees the price is always $9000 in the past maybe 10 years).  At the same time, the costs increase.  Thus the net effect is a profit reduction.  So although the market value of a piece of land is increasing, the operational value to GTP is decreasing.  Unless GTP goes bust, it can never sell the land, and hence the increased market value is nothing to GTP.


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## pch (25 June 2006)

Hi again

I pulled the value appreciation figure out of you know where  But I was more trying to determine how one takes into account price increases of the land. Your reasoning is sound and a good conservative view on the net decrease in profit but I guess we also need to take into account that such land we are talking about is becoming more and more difficult to source, and this is one of the problems that GTP and the whole agribusiness industry faces. So like any finite resource, over time this would have upward pressure on its intrinsic value..

You never know - in the future GTP might be whacking on biodeisel crops if its more profitable than pulp for paper 

This may be over simplistic, but hey, my uncle owns a couple hundred acres around Dunsborough/Bussleton in WA. 30 years ago when he aquired it, people thought he was mad, now he is a very rich hillbilly having carved it off and sold it bit by bit since 

One thing is for certain though that the sort of asset we are talking about is a lot more unlikely to reduce in value the same way that plant or excess inventory depreciates over time. 

I guess my point was that since you can't predict the rate of increase, then the next best thing is to re-value the land each year and then adjust your discount rate by a certain margin?


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## Jackob (26 June 2006)

Hi pch,

IMHO, the long-term house price growth in big cities is largely determined by the growth of rents, which is in turn determined by the growth of average income of the tenants.  The real average income growth (inflation excluded) in Australia is about 2% p.a. and the inflation is under 3% at present.  So a 6% p.a. growth in value would be very good even in city area in a long term.  And I doubt the rural land price would have the same growth rate.  (I reckon the rural land price growth is determined by its productivity growth.)

On the other hand GTP now bought all the new properties on bank loans.  For example, J Young said in his recent open briefing that GTP would have $200m bank loans to buy land for this year's pulpwood projects of $~300m, and have $250m loans for the income projects (grapes, olive and cattle) of $~145m.  The interest on all these bank loans should be at least 7% p.a. (last year's TREES-3 bears an interest of 7.75%).

So even if the land value increases by 6% p.a., it would still be a net loss after servicing the loans.


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## TheAnalyst (26 June 2006)

Hi Jacob

I will appreciate your attention to detail and your application of fundamentals and the new IFRS,s in regards to the the profit and loss statement of GTP......you must also note that gtp is in receipt of lease revenue as the opportunity cost for giving up their right to use their own land.....also under IFRS,s impairment is looked at each year....so the each year of devaluation should be reversed each year and come back thru as profit. Could you please tell me what new AASB under the new IFRS,s that you are quoting in regards to the write down of land???

thx as i would like to have a look at that myself.


----------



## Jackob (27 June 2006)

Hi Analyst,

I am not an accountant at all and my knowledge in accounting is limited.

The main concern of mine at present is all about the impact of AIFRS (Australian equivalents to International Financial Reporting Standards) on the GTP profit and loss account, which has been hinted in the GTP announcements a few times since its 2005 Annual report (if my memory is not wrong).

I quote what JY said in his recent open briefing as follows.

“*corporatefile.com.au*
You flagged last year that one of the biggest impacts to the company of AIFRS is
the carrying value of plantation land. How will these changes affect your FY06
results?

“*MD John Young*
We own the majority of the land used in our plantations project which we regard
as an investment that will increase in value over time. Under the new international
accounting standards our investment property land is required to be recorded at
fair value, and this value needs to reflect the encumbrance of the lease given to
growers and the deferral of rental streams.

“This AIFRS accounting treatment will add a degree of volatility to future earnings
as an accounting loss is expected to be booked when the land is first leased to
growers. This loss, however, is expected to reverse progressively over the
following years as the lease term reduces to expiry and the land becomes
unencumbered again.

“In any financial year, assuming no major changes to the assumptions underlying
land values, the net impact on earnings will reflect the expected initial fair value
accounting loss from land leased that year to growers and the expected accounting
gain in fair value of the opening land bank at the end of the year, as the leases to
investors will be one year closer to expiry by the year’s end.
For FY06 we expect the net impact to earnings from plantation land accounting to
be a loss as during the year we acquired a large amount of land and leased it to
investors. This expected net loss impact on earnings is accounting in nature and is
not a cash outflow.

“In the future, given that we expect to hold new plantation sales at around current
levels, we expect the net impact to earnings from AIFRS accounting for our land
to become earnings positive. The size and value of our land bank is expected to
increase to a level at which the accounting gain arising from the leases that are
closer to expiry at the end of the year should more than offset the accounting loss
arising from land which has been leased to new growers.” (END OF QUOTE)

As I mentioned before that the GTP headquarters said the value of land used for the new projects would be written down by 60-90%, from which I worked out the annual discount rate of about 9%.

Using this rate, if we know the acreages of the new and old lands, then we can have a rough estimate of the AIFRS impact on GTP’s earnings.  I would like to give a *fictitious* example for this calculation on pulpwood projects as follows.

If say this year GTP has spent $20 million to buy lands for the 10-year pulpwood project, then this $20m of land value would be written down by (1-9%)^10 = 61.1%, that is $12.2m.  On the other hand, GTP has old lands for the pulpwood projects of previous years, which might be worth say $60m.  Because most of the old lands were acquired in recent years, so their "present value" might be around $30m.  Assuming the land market value of land increased by 10% in the year, the total appreciation will be (9+10)% of the $30m, which is about $5.7m.  Combining the loss and gain together makes a total loss of 12.2-5.7=$6.5m.

Analyst, hope the above would help.

Cheers.

*Disclaimer:  I am no accountant and the above understanding/calculations may be totally wrong.  I disclaim any responsibility to them.
*


----------



## TheAnalyst (27 June 2006)

Hi Jacob

If you look at Austral they had a huge increase in their profit due to the land revaluation increases going through profit and loss because of IFRS,s but that in no way increases their share price as the market was aware that this was just a book entry......the same will be for the increases in gtp  land....the revaluation increments and decrements will be just that book enteries.....i have come to the opinion that the share price has been re-adjusted now for the effects of the new reporting date for gtp a slight step back in time.


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## Jackob (27 June 2006)

Analyst,

Sorry, but which company do you mean by "*Austral*"?  I couldn't work out myself.

Thanks


----------



## Jackob (30 June 2006)

The GTP final sales figure came out yesterday.  Nothing changed since JY's open briefing 2 weeks ago, except the pulpwood project sales that increased by 5% from an estimated $300m to an actual $315m.

But don't forget that the bank loan (debt) JY said to be used to buy the lands for the new pulpwood project would also increase by the same percentage from $200m to $210m, and the written down value of the lands for the new pulpwood projects would also increase by the same percentage.


----------



## abucs (3 July 2006)

MIR Investment Management have just announced they have bought $60 million of GTP shares over last 6 months (icluding July 2006) for average price of around $3.90.

http://moneymanager.smh.com.au/articles/2005/03/30/1111862430601.html

http://www.moneymanagement.com.au/articles/87/0c041387.asp

http://www.advance.com.au/about/media_centre/news/archive.asp?id=145

Looks like they have a good record and act on behalf of the biggest institutional names in Australian investments.


----------



## hypnotic (3 July 2006)

Jackob said:
			
		

> Analyst,
> 
> Sorry, but which company do you mean by "*Austral*"?  I couldn't work out myself.
> 
> Thanks




I think Analyst was talking about Brickworks, who own Austral Bricks + other tile and paver and timber companies...

Hypnotic


----------



## michael_selway (3 July 2006)

savtin said:
			
		

> Hi all GTP holders,
> 
> speaking to a friend of mine, he has heard throught the big grapevine that  the cattle projects have sold out at capacity (don't know exactly what that is but it was about 11000 droves i think), olives did well and wine did it tough, but i think met the minimum of 300 Ha (= 6000 lots).  if he is right then we could at least get the following:-
> 
> ...




Hi Satvin

how does the below compare to your estimates above?

thx

MS



> COMPANY ANNOUNCEMENT / MEDIA RELEASE
> Thursday, 29 June 2006
> 2006 Sales increases 30% to $458 million
> Great Southern Plantations Limited is pleased to announce that total sales of its agricultural investment products
> ...


----------



## Jackob (3 July 2006)

hypnotic said:
			
		

> I think Analyst was talking about Brickworks, who own Austral Bricks + other tile and paver and timber companies...




* Analyst advised me via a private message that the "Austral" he was talk about was "Australald" (ALZ).  ALZ had *restated* their 2004 profit under AIFRS by writing down about 15% of it and only a big profit jump in 2005 saved it from a price drop.

** MIR bought GTP shares between Jan-Jul this year at an average price of $3.879 per share - a *loss *of *12.1%* at today's price of $3.41.  I can't say I am not surprised at it.

*** GTP last year's sale jumped *50%*, whereas e/s increased, as a matter of fact, a mere *4%*.


----------



## Julia (4 July 2006)

Jackob said:
			
		

> * Analyst advised me via a private message that the "Austral" he was talk about was "Australald" (ALZ).  ALZ had *restated* their 2004 profit under AIFRS by writing down about 15% of it and only a big profit jump in 2005 saved it from a price drop.
> 
> ** MIR bought GTP shares between Jan-Jul this year at an average price of $3.879 per share - a *loss *of *12.1%* at today's price of $3.41.  I can't say I am not surprised at it.
> 
> *** GTP last year's sale jumped *50%*, whereas e/s increased, as a matter of fact, a mere *4%*.




Just for the record, ALZ is Australand - property developer.

Julia


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## Jackob (4 July 2006)

At present GTP price of *$3.35*, MIR's 15m shares has lost about *$8m*  in value.

Would any one give me a clue of the MIR fund size?  If the fund size is too small, MIR could sink just because this trade.


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## abucs (4 July 2006)

Look it up yourself, it's not hard. 

People are getting shaken out of their positions atm, while the funds increase their holdings.

These fund managers like Macquarie are competitors, not independant watchdogs.

Do not Macquarie underwrite the GTP dividend re-investment program ?

A stock that will be unsinkable and extremely profitable in 4-5 years can be played with by Macquarie in the short term to make money on the dips that they create.

It's not rocket science.


----------



## Jackob (4 July 2006)

abucs said:
			
		

> Look it up yourself, it's not hard.
> 
> People are getting shaken out of their positions atm, while the funds increase their holdings.
> 
> ...





Hi Abucs,

I rang MIR office this afternoon and was told that the 15m GTP shares were bought by "MIR Australian Emerging Opportunities Fund", which manages $68m fund in the mid of last month.  Not something they were very happy to talk about more ...       ($8m gone, ouch!)

"Do not Macquarie underwrite the GTP dividend re-investment program ?"

Do you mean that Macquarie does underwrite the GTP dividend re-investment program at present (in 2006 or 2005)?


----------



## abucs (4 July 2006)

$8m is not gone. 

I haven't read anything to say Macquarie won't continue to underwrite dividends in 2006.


----------



## TheAnalyst (4 July 2006)

Hi everyone

Sorry about the slow response.....read ALZ interim financial report...Jan 2006 roughly thats where the new IFRS's were first used for reporting entities and thats where it is explained about the revaluations and the distortion effects it has in profit and loss.

As for the market dont expect any great jumps for a few months or maybe even to the end of the year...likely a sideways market especially with the conclusions in regards to the economic indicators overseas and here in Australia.....and the RBA ready to put its foot on the economic break..."interest rate increases"....


----------



## Nicks (11 July 2006)

The stock has (unfairly imo) copped a fair bit of bad press lately. Is this some of the reason for the share prce fall lately. Tall Poppy syndrome if you ask me. Stock is a good return at these prices. Around last year at this time the stock was travelling around the same, then as started to take off toward $4.


----------



## Out Too Soon (11 July 2006)

I like Great Southern. There was a time when I hated it because I was looking at a large loss, I held on until it was a nice profit tho', got "out too soon" as always, now I'm watching ready to get on again. The question is how low can the knockers drive it. Must be patient with this stock, it rewards.


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## Jackob (11 July 2006)

Not quite.  Around this time last year GTP was actually on a steep down slope, price dropping from a high of $4.49 on 20/6/2005 to a double low of ~$2.66 on 1/9/05 and 7/10/05.  If the same scenario repeated this year, GTP would reach a low of ~$2.20 in the next a few months.


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## Jackob (17 July 2006)

The following is an abstract of an article in the AFR (Coppied from ComSec).  

*Reform loggerheads * 
Date: 14/7/2006 
Author: Fiona Buffini; Narelle Hooper 
Source: The Australian Financial Review --- Page: 30 

 Government proposals to curb tax deductions for forestry investment schemes have drawn criticism from a number of sources. While some critics of the plans claim that they do not go far enough, forestry groups including Gunns, Great Southern Plantations and Timbercorp claim that the plans will drive investment out of Australia's rural areas. Under the proposals, forestry deductions would be capped at $A6,500 a hectare per year, deductibility will be conditional on best-practice land use and investors will be prevented from claiming goods and services tax credits  

Any comments?


----------



## TheAnalyst (17 July 2006)

I have come to realise that the goverment will surely curb tax cuts as the large purchase of rural land for these investment purposes continuing at this present rate is having a negative affect as the next step will be to buy even small farms and will lead to a demise and diminishment of country and rural towns.


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## abucs (17 July 2006)

Won't this just mean agribusiness companies will now charge $6,500 a hectare and plant less trees on each hectare ?

Great Southern are approaching 300,000 hectares of timber land that they own/control themselves anyway.  In capping the sales at 31,000 - 35,000 hectares p.a. they won't be looking to buy too much more timber land.

Although putting the cashflow off into the future, Great Southerns past plan of owning their land puts them in a much stronger position against competitors who have to continually make lease arrangements with farmers.

TheAnalyst, i think you make a fair point about the survival of small farms.  It would be good to protect this way of life.  It seems globalisation and the need to become bigger and more efficient is continually putting increasing amounts of pressure on that way of life all over the world.


----------



## TheAnalyst (17 July 2006)

I think it is a little more than just that abucs. I think it has a lot to do with rural towns and cities of any size remaining economically viable as in the best interest  for Australia and this means also financially as this is the most important issue to the government otherwise the government would not have the slightest interest in minimising the amount of tax deductability.


----------



## abucs (18 July 2006)

TheAnalyst, i think this is a problem facing much of the world.  Certainly in the developed world but increasingly in the developing world.

Small rural areas are underpinned by small economics.  I think it works well in isolation but globalisation means that the cheapest, most efficient produce floods the markets and the smaller operators have trouble competing and are eventually bought out or go under.

I'm not saying i agree with it.  I don't want to see small-time businesss go under.  As you say, this then threatens the viability of small communities themselves.

When i travel in Asia i see small scale (and medium scale) rural enterprises under pressure, usually because they have little scale or capital to stay ahead of technological advances - machinery, maintenance, pesticides, market power, genetics etc.

South America is showing signs of this as well.

Interesting that the government  would be wanting to limit deductability specifically for the timber industry as at the moment they are all playing under the same deductibility rules (bar the 12 month rule).  A torrent of city money is currently making its way to the bush and outbidding smaller rural buyers and making current holders 'offers they can't refuse'.

If the government really wants to do something it can use some of the billions of surplus tax money to implement irrigation projects and open up more potential farmland in my opinion.  The amount of water wasted in the northern section of Australia is breathtaking.


----------



## Jackob (18 July 2006)

abucs said:
			
		

> Great Southern are approaching 300,000 hectares of timber land that they own/control themselves anyway.  In capping the sales at 31,000 - 35,000 hectares p.a. they won't be looking to buy too much more timber land.




GTP looks getting more and more thirsty for money to buy timberland.  This year alone, GTP needs $200m bank loans to buy ~33,000 ha of timberland for the pulpwood project.  Don't know where on earth the money will possibly be from to service the loans, let alone to return the principle.


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## abucs (18 July 2006)

Jackob,

From memory GTP needs 31,500 hectares of land for this year.
They have also started the rotation and draw down of Tiwi land.
This year that rotation / draw down will be a fairly modest 7,000 hectares.
So that is 31,500 - 7,000 = 24,500 hectares of land they will need (or have already bought).

Say average $6,000 per hectare = $147 million.
Great Southerns profit, with flagged increase costs will be at the very least $130 million.

So that's 147 - 130 = $17 million they will need for timber land (at most).  

Great Southern have flagged that the loan arrangements are until the rotation/drawdown of land kick in. 

In 2010-11 GTP is likely to rotate an ongoing 20,000 hectares x $6,000 = $120 million saving or 33c a share fully diluted.  This will gradually rise to 35,000 hectares or close to 60c a share. Of course in addition, they will also have the income products sales and revolving revenue streams.

Rather than struggling to pay back loans for timber land, GTP are actually expanding and using the loan facility to break into the beef export business as everybody knows.


----------



## abucs (18 July 2006)

The truth is, if the price of land goes much higher, it won't be profitable to be in the agribusiness timber industry as the margins will be squeezed.  Unless of course, you own the land yourself like GTP and do not need to buy or lease it in the first place.   This is the comparative advantage GTP has been aquiring.  In order to buy this comparative advantage, GTP has had to forego current cahflows.  This has always been the case.  Hence the limiting of the plantation sales and the emphasis on the income products to make up for the current cashflow deficit.

The great majority of that comparative advantage is close to having been already paid for.  

Rival companies that don't own their land will be caught in landprice increase problems or new government restrictions and will be vunerable to having their margins squeezed.  GTP will have more leverage here and be able to offer the customer a better deal.


----------



## Jackob (19 July 2006)

abucs said:
			
		

> From memory GTP needs 31,500 hectares of land for this year.
> They have also started the rotation and draw down of Tiwi land.
> This year that rotation / draw down will be a fairly modest 7,000 hectares.
> So that is 31,500 - 7,000 = 24,500 hectares of land they will need (or have already bought).
> ...




Hi Abucs,

Thanks for your information and reply.  I would like to discuss the following questions.

If only $17m were enough for buying the timberland needed, why would GTP have to arrange a $200m loan, which was 10+ times bigger than what it needed?  

Given they have already got a $250m loan from ANZ this year, why wouldn’t they just squeeze the $17m into that existing loan to make it $267m, and save the time and money to negotiate with the same bank for another $200m loan which they don’t really need?  

If the $130m said profit would be able to reduce any amount of loans, then why not use it to reduce the existing $250m loans to $120m in the first place to save $$$millions$$$ of interest?

Please read the following words of J Young in his 16/6/2006 open briefing carefully.

"*Initially*, we’ve put a new $250 million facility in place with ANZ Bank to fund the acquisition of cattle and vineyard properties, *and we expect to increase our use of debt in future*."

The phrase "*Initially... and we expect to increase our use of debt in future*" implied GTP had most likely used up all that $250m loan already.  Well done, JY!

This $250m new debt plus $200m TREES-2/3 plus $200m coming debt makes a total debt of $650m, equivalent to $2.10 per share.  This $650m total debts will cost GTP interest at least $52m a year, or say $17c per share per year.  No wonder GTP said it would have a "burst of cost"! 

This $650m or $2.10 per share debt burst, I guess, among many other things, is a prime reason for the current GTP share price plunge.  This plunge started on 16/6/2006, just on the same day JY revealed the $250m + $200m new debt in the open briefing.  No surprise at all!

By the way, the pulpwood land GTP needs for new project this year should be 35,000 ha, because the sales of the project was $315m (announced 29/6) and the application fee for the project is $9000/ha ($315m/$9,000=35,000).  If  7000 ha will be from rotated land, then GTP still need 28,000 ha, which would cost $6000+/ha * 28,000ha = $168+m.  The remaining $32-m from the $200m loan would conveniently be GTP's "working capital" as usual.  (Forget GTP used part of its proceeds from the institutional share placement as its "working capital" last year?  If anyone interested, please just ask GTP where has that money gone?  Or why don't they use it to reduce GTP's current debt?)


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## michael_selway (19 July 2006)

TheAnalyst said:
			
		

> I think it is a little more than just that abucs. I think it has a lot to do with rural towns and cities of any size remaining economically viable as in the best interest  for Australia and this means also financially as this is the most important issue to the government otherwise the government would not have the slightest interest in minimising the amount of tax deductability.




TIM is a better business than GTP do u think?

thx

MS


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## abucs (19 July 2006)

Jackob, I take your point regarding the 35,000 hectares.  I was including the GST, but perhaps this isn't included in the announced revenue figures. In which case it will be 35,000 hectares.

Reading the announcement, it says they hope the $200 million facility will be in place by the end of calendar year 2007. So it is not to buy land for this year as all of that land will have already been bought and planted and be well into its first year of growing.

Further the structure of the $200 million is not so much a loan but a non equity 'raising' in the form of a land/property trust against the existing land bank that GTP has acquired. This is further to the announced plans to focus on capital management.  Here they are using the value of their land bank instead of another HYBRID.

It boils down to this - everytime Great Southern has wanted to expand they have diluted the share base.  Now instead, they are using debt against their company assests. A lot of people don't like that.  Fair enough.  

Every time they are raising money it's to benefit them in the future.  For timber the benefit is 10 years down the track, for the income products it's when the cumulative revenue of ongoing yearly income pays the money back for the land bought. People don't like that.  They want the good times to be sooner, not pushed further into the future even if they will be even better times.  People want dividends.  Institutional investors want dividends.  Fair enough.

Great Southern flagged the capping of the increasingly expensive timber purchases as they were reaching a desired level of a large sustainable land bank.  They also flagged that the number one priority would be now focusing on the capital structure.  People read dividends. GTP are restructuring their capital and expanding again.   

GTP continues to buy land.  Now it is mainly cattle land.  But also vineyards, olive groves and for the short term more timber land until they reach 350,000 hectares.

This is costly but it gives them the strength to borrow against their accumulated assets such as the $200 million facility we are talking about. 

Other competitors can't do that.  GTP are in a strong position. But they are deferring the good times (cashflow = dividends) well into the future on the plan of even better times.  Shareholders not in for the long term don't like that. Fair enough.  

GTP's shareprice swings will continue with short term players getting in and out and either making lots of money or being burnt, depending on if they get an upswing or downswing.

John Young and the top 3 institutions now hold 45% of the stock.  It will be interesting to see if this holding is reduced or expanded.  If it is expanded then I expect the volatility in the shareprice will be reduced and the wait for the good times would be nearing an end.   If not, then the wait for the long term players will continue with the opportunity for extra investments to make money from the short term swings as they wait.


----------



## TheAnalyst (19 July 2006)

GTP currently has a PER of 6 with no profit downgrade or any earnings warnings.....I am back in!!!!!


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## Nicks (20 July 2006)

I hear you. This is an awesome price to get into this stock with just on the returns alone, and when it catches on the capital return on the stock should be nice too. 
Im back in.


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## CanOz (20 July 2006)

You don't think it might continue to slide a bit more? 

Too many long red candles for me.


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## TheAnalyst (20 July 2006)

It really is taking a slide but for no real apparent reason. What next a per of 1? I dont think so!


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## CanOz (20 July 2006)

I see your point. I think if it is going to reverse, you'll see a Doji first. A combination of F/A and T/A for entry could give you a bit better entry price.

Good luck with it.


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## TheAnalyst (20 July 2006)

Chart does not look good at all! But we need reasons and yes there are some but they should not be cutting so deep. The event I would be looking at here is a hard and fast surge in price.


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## The Once-ler (20 July 2006)

TheAnalyst said:
			
		

> I have come to realise that the goverment will surely curb tax cuts as the large purchase of rural land for these investment purposes continuing at this present rate is having a negative affect as the next step will be to buy even small farms and will lead to a demise and diminishment of country and rural towns.





You summed it up fairly well here. This greed that is happening wont be able to continue. This is a highly risky investment, the PE ratio is irrelevant. Once the government fixes up the crazy tax laws that allow these greedy companies to rape and pillage the rural community so that they can make a loss for their even greedier MIS investors, the profits will disappear. Why else are GTP able to pay so much for land? Think about it?

What is wrong with paying a fair amount of tax?

Lets plant some more grapes ehh!!!

The smart money got out ages ago. 

Good luck.


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## michael_selway (21 July 2006)

TheAnalyst said:
			
		

> GTP currently has a PER of 6 with no profit downgrade or any earnings warnings.....I am back in!!!!!




Hm it keeps falling, what do u think technically is teh bottom?







thx

MS


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## Jackob (21 July 2006)

Another busy day, another deep plunge!

The big drop, the huge turnover, the shrinking buyers’ market depth vs. swelling sellers’ depth...  can't make one imagine this steep slide will stop anywhere soon.  More on the way.

This market is of no reason?  Too naive to think in this way.  The reasons have been there.  Just check the previous posts in this thread.

I owe Abucs a reply, but too tired to do it.

Good luck!


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## TheAnalyst (21 July 2006)

What a plunge indeed! but it must stop soon. Support should be at a per of 7-8 at least but as we have seen it has refused to stop there so technically and fundamentally it is in the over sold area at present and unless there is a valid reason; say a profit downgrade then it will have a reasonable bounce, so currently I am now looking at time duration and comparative per's.


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## TheAnalyst (21 July 2006)

What a blood a bath


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## GreatPig (21 July 2006)

If it closes around this level today (in the $2.50s), it will have broken below the low of October last year and be looking back to 2004 for support levels.

Maybe Split Enz were wrong, and the history of 2000-2001 will repeat - 50 cents here we come! 

GP


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## TheAnalyst (21 July 2006)

I am glad that all I am is a short term trader or else it would have been a waste of time on this one this year. I would still like to know the real inside reasons by the big players for the huge sell down of GTP.


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## Jackob (21 July 2006)

GreatPig said:
			
		

> If it closes around this level today (in the $2.50s), it will have broken below the low of October last year and be looking back to 2004 for support levels.
> 
> Maybe Split Enz were wrong, and the history of 2000-2001 will repeat - 50 cents here we come!
> 
> GP




GreatPig,

We are in the mid of an avalanche, aren’t we?  

Huge volumes today – 5 million shares changed hands so far.

The crucial $2.66 support was broken trough without a hiccup!

If GTP were heading to, as you suggested, $0.50 for support (well, I hope not, but I can't exclude this probability), then this would certainly imply GTP would *go under*.  Last time when GTP was $0.50/s a few years ago, it bore no debt at all, but this time around it has TREES $200m, bank loans $250m plus another $200m bank loan under negotiation – a total of *$650m debt*, or say *$2.10 per share*!


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## Julia (21 July 2006)

I haven't visited this thread for some time, having sold out a couple of months ago.

Just wondering if all of you guys who are exchanging views about GTP at present are actually holding the stock, and if so, are you not even considering baling out?

Julia


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## TheAnalyst (21 July 2006)

Hi Julia

I bought $3000 worth of warrants Tuesday and sold them today.


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## Jackob (21 July 2006)

Julia,

I hope none of the forum is still holding GTP...   too risky...

... Another 12c plunge today…   Huge volume of 6.5m shares…  A real avalanche!

The next stop looks like at $2.10-$2.20.  If it wouldn’t hold… then goes to under $2…

Good luck to everyone!


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## Duckman#72 (21 July 2006)

Julia said:
			
		

> I haven't visited this thread for some time, having sold out a couple of months ago.
> 
> Just wondering if all of you guys who are exchanging views about GTP at present are actually holding the stock, and if so, are you not even considering baling out?
> 
> Julia




Hi Julia

Bought some more in my super fund at $2.55 today. Looking forward I think it will be a steal. No profit downgrades. Good management. Sure tax breaks are a grey cloud at the moment but I cannot see why Great Southern is in a worse position (long term) than Gunns or Timbercorp.

I might look a goose in the short term but long term gains will come. And great P/E ratio.

Duckman


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## bunyip (22 July 2006)

I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
Bloody hell......no wonder so many people get hammered in the stockmarket!

I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much. 
Some of them stop going down only when the company goes broke. Meanwhile, you're tying up your money in a deadbeat stock, money that could be invested in a good performer. The lost opportunity cost is killing you more than most of you ever realise.
Right now there are stocks that are going up solidly. Anyone who can't see the benefit of investing in these stocks, rather than in those that are sinking like the Titanic, must have an aversion to making money.

If you think GTP or any other stock has good prospects in the longer term, then it's prudent to hold off investing in it until it shows signs of confirming your view. There's only one way it can do this.....it must start uptrending.

Buying plunging stocks is not investment, it's GAMBLING.

Bunyip


----------



## TheAnalyst (22 July 2006)

Exactly, you are definitely right on this point Bunyip.....and obviously there is something more dramatic happening here than the whole market is aware of.


----------



## michael_selway (22 July 2006)

bunyip said:
			
		

> I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
> Bloody hell......no wonder so many people get hammered in the stockmarket!
> 
> I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much.
> ...





hehe what "good" stocks do u knwo of atm?

GTP may start uptrending if the full year results are better than expected and the future earnings guidance shows signs of sustained growth and reduced risk, if any

thx

MS


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## bunyip (22 July 2006)

michael_selway said:
			
		

> hehe what "good" stocks do u knwo of atm?
> 
> GTP may start uptrending if the full year results are better than expected and the future earnings guidance shows signs of sustained growth and reduced risk, if any
> 
> ...




Michael, 

My scan has come up with more than 30 stocks in the ASX 300 that are in decent uptrends. If I was to look outside the ASX 300 there would obviously be a lot more.
But rather than hand them to you on a plate, I'll let you find them for yourself. 
I presume you do know how to recognise uptrending stocks? If not, I'll be happy to recommend some good reading material that will teach you this invaluable skill....I believe you'd find it a worthwhile compliment to your fundamental analysis.

Bunyip


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## Jackob (22 July 2006)

bunyip said:
			
		

> I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
> Bloody hell......no wonder so many people get hammered in the stockmarket!
> 
> I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much.
> ...






> Michael,
> 
> My scan has come up with more than 30 stocks in the ASX 300 that are in decent uptrends. If I was to look outside the ASX 300 there would obviously be a lot more.
> But rather than hand them to you on a plate, I'll let you find them for yourself.
> ...





Well said, Bunyip.  I highly appreciate your comments.  

I also would like to know what good reading materials you would recommend for learning how to recognise uptrending stocks.  

Many thanks.


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## TheAnalyst (22 July 2006)

Me to brother Bunyip.....Allouakbour


----------



## abucs (22 July 2006)

*Great Southern Plantations*

Look guys, anybody can say a stock is no good when it's heading south.

Most of you guys are short term orientated and I don't really see the point in continuuing posting if there is no intelligent comments on the stock.

In five years I've gone from zero to a dividend stream of $150,000 to $200,000 a year with a house thrown in so I am not taking lessons from people like you Bunyip.

I wish you all well but I'm off to live in Asia in a couple of months to live off my investments so will not be posting here anymore.

I'm sticking with my philosophy coz it works.  Good luck with all your short term buys. 

Lets see if you guys can retire at 35 with your philosophy.


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## Duckman#72 (22 July 2006)

bunyip said:
			
		

> I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
> Bloody hell......no wonder so many people get hammered in the stockmarket!
> 
> I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much.
> ...




Can we stick to GTP Bunyip. 

I think most people agree with your view of falling stocks however this isn't the thread for generalised investment strategies. 

We are talking about one stock. How low do you feel that GTP will fall?


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## michael_selway (22 July 2006)

bunyip said:
			
		

> Michael,
> 
> My scan has come up with more than 30 stocks in the ASX 300 that are in decent uptrends. If I was to look outside the ASX 300 there would obviously be a lot more.
> But rather than hand them to you on a plate, I'll let you find them for yourself.
> ...




Hi Bunyip

I know how to pick "uptrending", but can you please name the best ones currently in your opinion, doesnt have to be ASX 300

thx again

MS


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## bunyip (22 July 2006)

michael_selway said:
			
		

> Hi Bunyip
> 
> I know how to pick "uptrending", but can you please name the best ones currently in your opinion, doesnt have to be ASX 300
> 
> ...




No Michael - you put in the work and pick them yourself. If you do indeed have the ability to pick uptrending stocks, and you have software that can scan for them, and you know what criteria to tell your software to look for, then it'll take you no more than a few minutes to find those 30 odd uptrenders that I mentioned.
If you don't have software that can perform scans, then I suggest you buy some. 
PM me if you like and I'll tell you three or four software packages that fit the bill. Also I'll tell you exactly what scan criteria I use to pick the uptrenders.
It really is quite simple if you know what to do. 

Bunyip


----------



## bunyip (22 July 2006)

Duckman#72 said:
			
		

> Can we stick to GTP Bunyip.
> 
> I think most people agree with your view of falling stocks however this isn't the thread for generalised investment strategies.
> 
> We are talking about one stock. How low do you feel that GTP will fall?




Duckman

Do you have a crystal ball? I don't....neither you nor I have any idea how far GTP will fall.
It could begin a new uptrend on Monday, in which case you'll be smiling all the way to the bank. 
But the other possibility is that it could fall a lot further. And therein lies the risk of buying a downtrending stock....it could be many years before you see any return on your money, or in the worst case scenario you could lose your entire investment. 
That's why I maintain that no matter how positive you feel about GTP's long term prospects, it would have been more prudent if you'd delayed your buying until the stock confirms your opinion by beginning a new uptrend.

I'm not trying to be critical of you or your investment strategy. Its just that I've 'been there done that'....I've bought downtrending stocks just like you did, then sat around for donkeys years waiting for them to climb back above my purchase price. 
There are more efficient ways to invest your hard earned money.

Bunyip


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## michael_selway (22 July 2006)

bunyip said:
			
		

> No Michael - you put in the work and pick them yourself. If you do indeed have the ability to pick uptrending stocks, and you have software that can scan for them, and you know what criteria to tell your software to look for, then it'll take you no more than a few minutes to find those 30 odd uptrenders that I mentioned.
> If you don't have software that can perform scans, then I suggest you buy some.
> PM me if you like and I'll tell you three or four software packages that fit the bill. Also I'll tell you exactly what scan criteria I use to pick the uptrenders.
> It really is quite simple if you know what to do.
> ...




Bunyip

Picking "Uptrending Stocks" is the easy part (everyone can look at a chart). 

But can you pick uptrending stocks that is going to turn the other way? Thats where the trick is 

Or a downtrending stock that will become bullish big time?

If you look at the RIN thread, RIN was one of those "uptrending stocks" that went bad. I thought it was going to because the forecasts were slowing big time compared with last few yrs % wise

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 2009 
EPS 62.8 106.7 123.0 136.6 149.5 
DPS 21.0 78.0 45.2 47.7 51.9 

EPS(c) PE Growth 
Year Ending 30-03-07 123.0 10.9 15.3% 
Year Ending 30-03-08 136.6 9.8 11.1% 

But would you have bought it at $19-20 before the downward trend started? Many did unfortunately.







thx

MS


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## GreatPig (23 July 2006)

michael_selway said:
			
		

> But can you pick uptrending stocks that is going to turn the other way?



No one can reliably pick stocks that are "going to" do anything - they'd be multi-billionaires by now if they could.

The best anyone can do is guess based on whatever variables they study.

Cheers,
GP


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## Jackob (23 July 2006)

abucs said:
			
		

> Jackob, I take your point regarding the 35,000 hectares.  I was including the GST, but perhaps this isn't included in the announced revenue figures. In which case it will be 35,000 hectares.
> 
> Reading the announcement, it says they hope the $200 million facility will be in place by the end of calendar year 2007. So it is not to buy land for this year as all of that land will have already been bought and planted and be well into its first year of growing.
> 
> ... ...




Abucs,

Your recent post reminds me that I owe you a reply to your above post...

I take your point that the GTP $200m loan facility for the pulpwood projects will only be in place by the end of calendar year '07 according to their announcement.  (Sorry I neglected the digits "'07" in their announcement).

However, the problem of money for the 2006 pulpwood is still there…   The 2006 pulpwood project need 35,000 ha land, of which only 7,000 ha has been bought before, and the rest 28,000 ha must be bought imperatively by the end of March 2007.  These 28,000 ha land needs $6000/ha * 28000ha=$168 m to buy.  Where can be the money from?  

In the past 3 years as I observed, not a single $1 from the GTP “profit” was used to buy land.  The money buying land was all from issuing new shares and hybrids.  

Last year around this time, GTP said “no more TREES!” “No TREES-3!”…  But just in a few weeks after announcing a $124m annual profit in August, it raised $125m TREES-3 to buy pulpwood land…  (and the sp plunged to $2.66 as we all know… )

Thus I suspect that, if GTP can’t get that $200m from bank soon, then ~$200m of TREES-4 has to be on the way!  (The other alternative of issuing more shares is less likely)

So, why do we have to have this damn big share price tumble (with 6m+ shares turnover last Friday)?   If TREES-4 is not THE answer, I reckon it is likely part of the answer.  Just as TheAnalyst said, there must be “something more dramatic happening here than the whole market is aware of”.    

Cheers

Jackob

PS: BTW, what’s your investment philosophy to make you so successful?


----------



## bunyip (23 July 2006)

michael_selway said:
			
		

> Bunyip
> 
> Picking "Uptrending Stocks" is the easy part (everyone can look at a chart).
> 
> ...




Can I pick uptrending stocks that are going to turn the other way? 
Can I pick a downtrending stock that will become bullish big time? 

Probably not. I've never really tried....I don't need to. 
I don't agree with you when you say "That's where the trick is". 
For me the trick is not trying to work out in advance when a stock is going to turn the other way. 
A far more useful 'trick' in my view is to be able to recognise a new trend shortly after it begins, then be able to identify one or two simple setups that signal an entry into the trend.
And to keep your loss small if the trade doesn't go as planned. 

Would I have bought RIN at $19-20 before the downward trend started?

No I wouldn't....I would have bought it months earlier on the first buy signal after it began uptrending.
Even if I did buy in close to the top, my stop loss would have extracted me from the trade with only a small loss if the trade turned against me.

Bunyip


----------



## bunyip (23 July 2006)

*Re: Great Southern Plantations*



			
				abucs said:
			
		

> Look guys, anybody can say a stock is no good when it's heading south.
> 
> Most of you guys are short term orientated and I don't really see the point in continuuing posting if there is no intelligent comments on the stock.
> 
> ...




Who said anything about being short term orientated? Some stocks trend upward for years on end and I'm happy to stick with them as long as they continue doing so, if I'm fortunate enough to be aboard them.

I'm not trying to give lessons any more than you are. Like you, I'm simply expressing my views, which are that buying downtrending stocks is a recipe for disaster for many investors.
If you've managed to defy the odds by making this strategy work for you, then good on you. But that doesn't alter the fact that uptrending stocks are a better choice than downtrending stocks for most investors.
For every person I've spoken to who claims to have done well by buying downtrending stocks, I've spoken to probably five or six others who readily admit they came unstuck by using this strategy.

You don't see any point in continuing to post here? Good, because I don't see any point in you continuing to post either if the best you can do is get on your high horse and start big noting yourself just because you happen to disagree with someones opinions. 
If that's what you offer this forum then we're probably better off without you.

Bunyip


----------



## bunyip (23 July 2006)

Jackob said:
			
		

> Well said, Bunyip.  I highly appreciate your comments.
> 
> I also would like to know what good reading materials you would recommend for learning how to recognise uptrending stocks.
> 
> Many thanks.




Jackob

Most of the reading material I'd recommend has already been mentioned  on this forum at one time or another.
Rather than repeat it here, I'll PM you.

Bunyip


----------



## Jackob (23 July 2006)

Bunyip,

Thank you for the book list for reading.

The present GTP situation looks really bad.  Breaking through the $2.66 support does imply a continuation of the downward trends in the medium term.  The huge turnover of 6.5 million shares last Friday indicates possible involvement by institutions...  Let's wait and see what would happen tomorrow and next week.

Look luck to every one!

Jackob


----------



## Jackob (26 July 2006)

GTP is still tumbling and no sign says it will stop soon.

For those still holding GTP shares, I would like to recommend the following post by bunyip 4 days ago. 

Cheers.  Good luck!



			
				bunyip said:
			
		

> I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
> Bloody hell......no wonder so many people get hammered in the stockmarket!
> 
> I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much.
> ...


----------



## bunyip (26 July 2006)

Those GTP shorts of yours must be showing some fairly decent gains by now eh Jackob?
Lucky you. Well no...not lucky - shorting a downtrending stock like GTP  is good management, not good luck.

Bunyip


----------



## Jackob (27 July 2006)

Hi Bunyip,

I sensed the GTP's MIS business was unsustainable 2 years ago.  Regrettably no one believed me.  I shorted GTP twice before, one won and the other lost.  This time is a third time lucky.

I still regard the whole MIS business is very fragile and GTP is the most vulnerable due to its business model.  The unsustainable nature is slowly unfolding. 

Happy trading!


----------



## 3 veiws of a secret (28 July 2006)

GTPGB also under the hammer, boy am I glad I sold out!!!


----------



## bunyip (28 July 2006)

3 veiws of a secret said:
			
		

> GTPGB also under the hammer, boy am I glad I sold out!!!




GTPGB?

GTP has put in a bit of a rally in the last two days. But in a downtrending stock, rallies tend to be short lived because they're met with increased selling pressure from holders of the stock who are hurting and wishing they bailed out some time ago. They see the rally as an opportunity to sell out for a better price, and it's this selling pressure that causes the rally to end and the downtrend to resume.
I suspect that this is what's about to happen with GTP....further downside to come. No guarantees of course, but that's the most likely probability.
Todays Doji adds some weight to this probablility.

Bunyip.


----------



## eddievanhalen (28 July 2006)

bunyip said:
			
		

> GTPGB?
> 
> Bunyip.




does exist as a convertible note.  Generally a "G" after the share code indicates  a convertible note.

Cheers,

Ed


----------



## bunyip (28 July 2006)

eddievanhalen said:
			
		

> does exist as a convertible note.  Generally a "G" after the share code indicates  a convertible note.
> 
> Cheers,
> 
> Ed




Righto, thanks Ed.....I've learnt something new.

Bunyip


----------



## 3 veiws of a secret (28 July 2006)

Sorry If I sound smart ,but I'm still glad I'm OUT!,its a case of take your money and run!,my profit somebodies gain? :remybussi

GREAT SOUTHERN PLANTATIONS LIMITED  7.75% PERP.SUB.CONVERTIBLE NTE RESET OCT2010TREES3


----------



## michael_selway (30 July 2006)

3 veiws of a secret said:
			
		

> Sorry If I sound smart ,but I'm still glad I'm OUT!,its a case of take your money and run!,my profit somebodies gain? :remybussi
> 
> GREAT SOUTHERN PLANTATIONS LIMITED  7.75% PERP.SUB.CONVERTIBLE NTE RESET OCT2010TREES3






> Date: 26/7/2006
> Author: Philip Hopkins
> Source: The Age --- Page: B4
> 
> The Australian Government has been investigating managed investment schemes (MIS) in 2006. Although the arrangements for forestry MIS have been extended to 2008, the concerns of Australian Agricultural Minister, Peter McGauran, that horticultural MIS are "market distorting", are being reflected in poor sharemarket performance. Against the mid-2006 performance of the S&P/ASX 200 index, Great Southern Plantations (GSP) and Timbercorp have been especially lacklustre. Between 23 June and 25 July 2006, GSP and Timbercorp have slumped 27 and 23 per cent apiece. On 25 July GSP fell $A0.09 to $A2.41 and Timbercorp dropped $A0.05 to $A3.02




***********************************************************



> we are concerned for the MIS industry as a whole as a consequence of the following:
> 
> 1. The disparity between the returns investors achieve (3-4% post tax return for current forest
> projects) against the 8-15% commission rates paid to financial planners who recommend the
> ...




thx

MS


----------



## michael_selway (7 August 2006)

http://www.abc.net.au/landline/content/2006/s1706489.htm



> Be cautious of schemes: NFF
> Reporter: Sally Sara
> 
> First Published: 06/08/2006
> ...




http://www.abc.net.au/reslib/200608/r98330_299094.asx


----------



## Portfolio (11 August 2006)

The MIS industry is fragile but GTP's valuation is moving now very close to NTA which therefore assumes no value in the MIS business going forward.  

Timbercorp has a better management than GTP but GTP's strong point is its sales force and its ability to sell product.


----------



## CanOz (11 August 2006)

An opporuntity exists with GTP as it produced a GAP down. Gaps always get filled so you could expect it to hit 3.05 in the near future. It will be interesting to see.


----------



## alankew (11 August 2006)

Do you have a chart that illustrates this.Thanks


----------



## CanOz (11 August 2006)

Sorry I can't cut and paste my charts as i use Power Etrade. The two gaps i speak of occured on the 19/06 (only a small gap), and then again on the 17/07. Any OHLC or candle chart will show you this.

Can anyone else show this chart?


----------



## Jackob (11 August 2006)

CanOz said:
			
		

> ... Gaps always get filled  ...




How true is this rule?  Anyone has any statistics?


----------



## CanOz (11 August 2006)

Check out my new Thread on Gaps. Got an reply and good link, it explains it very well. Still wondering if anybody trades this way though. Seems you have to be careful in identifying the type of GAP before entering a position which makes good sense.


----------



## Porper (11 August 2006)

CanOz said:
			
		

> An opporuntity exists with GTP as it produced a GAP down. Gaps always get filled so you could expect it to hit 3.05 in the near future. It will be interesting to see.




Ok, here is a chart for anybody interested.

Firstly gaps do not always get filled, and there are various types of gaps, I have just started trying to trade these after my daily scan brings up an opportunity.

I would be looking for a selling opportunity after this rally ends


----------



## CanOz (11 August 2006)

Great, thanks Porper. The link i just read from Carmo has some good info on Gaps. Identifying the type of gap is as it seems, the most important step before initiating a position. I would be very interested in any other advice you have related to gap trading.

Thank you.


----------



## Porper (11 August 2006)

CanOz said:
			
		

> Great, thanks Porper. The link i just read from Carmo has some good info on Gaps. Identifying the type of gap is as it seems, the most important step before initiating a position. I would be very interested in any other advice you have related to gap trading.
> 
> Thank you.





Canaussieuck, this link is a good starting point.I am certainly no expert but it is one of the simpler ways to trade (In my opinion).Very rigid rule based system that works well for me up to now.Look for low risk entries and stick to a rigid stop loss.

http://www.incrediblecharts.com/technical/gaps.htm


----------



## CanOz (11 August 2006)

So Porper, looking at MRE today, would you say its an exhaustion gap? Very high volume.


----------



## Jackob (12 August 2006)

The following article is copied from 
http://www.news.com.au/heraldsun/story/0,21985,20086916-664,00.html#



> AAco plans for a beefy result
> 
> Geoff Easdown
> 
> ...




*1. GTP saved AAC.*

AAC recorded a 27% increase of HY pre-tax profit to $12.2m, which included a $4.9m profit in $53.5m sale of Wrotham Park Station to GTP.

*2. How much investors of GTP cattle schemes will get after paying $5,000 for leasing 4 heads of cattle for 7 years? * 

AAC's 528,578 heads of cattle made $12.2 million earnings in total, so each head made ~$23 in HY (including the profit from Wrotham Park Station!).  

So the investors will get ~$23*2*4*7=~$1288 at best for 4 cattle in 7 years.  According to the contract, half of the above profit should go to GTP (don't forget GTP bought those cattle farms on bank loans bearing 8% pa interest), so the other half to investors will be only $644, or say 12.88% on their $5000 investment in 7 years.   Thus I have no slightest doubt that the GTP cattle scheme investors will lose nearly all of their money in such an investment scam.


----------



## bunyip (13 August 2006)

I know virtually nothing of the fundamentals of GTP, except for what I've read on this thread, and what I heard on Landline last weekend.
The share scheme outlined by Jackob whereby GTP investors invest in 4 cattle, appears to have certain parallels with other agricultural share schemes. 
Some that come to mind are Olives, Aloe Vera and Ostriches.
Aloe Vera and Ostriches were disastrous investments that in many cases caused 100% of investors' funds to evaporate into thin air.
Olives.....the jury is still out. As a relatively new industry, the outcome of the olive investment schemes is as yet unknown. Various companies have been offering a certain number of olive trees for purchase or lease on a profit sharing arrangement. The investor of course never owns the land on which the trees grow, he/she makes (or loses) money solely on the ability of the trees to (hopefully) generate a net profit after the considerable production costs are paid.
Needless to say, the people managing the scheme set their management fees at a level that guarantees a healthy profit to themselves, regardless of whether or not the scheme makes money for investors.
These agricultural share schemes have a high failure rate, and I suspect that the olive share schemes will be another casuality. Nor would the GTP cattle scheme inspire my confidence.
After years of getting fleeced by bogus schemes that failed to live up to their promises, perhaps investors are finally starting to wake up to the considerable risks of sinking their capital into shared agricultural ventures. Maybe this gives us some insight into why GTP's share price has almost halved in the last two months.
Whatever the reasons, and irrespective of the fundamentals, GTP's stock price is heading in the wrong direction to make money from it, unless you're trading it short.
If GTP's fundamentals ever change to a degree that once again inspires investor confidence, this will be reflected in the chart changing from downtrend to uptrend.

Bunyip


----------



## Portfolio (13 August 2006)

Your first comment was the only one that made sense: you understand nothing about the fundamentals of great southern.

This is great stock to own and trade (on a fundamental basis) because next to no one understands the business and as such the stock moves around due to technical analysis.

This stock is so cheap at the moment it is trading at a massive discount to its cash and land NTA.  MIS can finish tomorrow and there is still limited downside.


----------



## Portfolio (13 August 2006)

To help you guys out:

1.	The financial model for the cattle project means investors will get back more than double their money over the next 7 years (the research estimates the after tax IRR of "up to 24.8%).  Cattle businesses are complex so your “profitability per head” ratio using AAG is useless.  GTP will not manage their cattle in the same way as AAG (for one thing AAG are expanding their heard which decreases profitability but adds to future growth).  Have a look at the independent research on all of their projects if you actually want to know how they work.  Try the PDS as well.
2.	Bunyip your comment that “After years of getting fleeced by bogus schemes that failed to live up to their promises, perhaps investors are finally starting to wake up to the considerable risks of sinking their capital into shared agricultural ventures. Maybe this gives us some insight into why GTP's share price has almost halved in the last two months” is totally wrong.  Did you see their sales figures this year.  Massive increases in FUM.  The shares have decreased because of speculation about the outcome of the enquiry and then after initial selling the technical analysts have sold it further.
3.	The schemes are very profitable for Great Southern (hence it is a good company to own) but the schemes are still very worthwhile if you are paying high amounts of tax and can actually do something with the tax saved.


----------



## bunyip (13 August 2006)

Portfolio said:
			
		

> To help you guys out:
> 
> 
> 2.	Bunyip your comment that “After years of getting fleeced by bogus schemes that failed to live up to their promises, perhaps investors are finally starting to wake up to the considerable risks of sinking their capital into shared agricultural ventures. Maybe this gives us some insight into why GTP's share price has almost halved in the last two months” is totally wrong.  Did you see their sales figures this year.  Massive increases in FUM.  The shares have decreased because of speculation about the outcome of the enquiry and then after initial selling the technical analysts have sold it further.
> 3.	The schemes are very profitable for Great Southern (hence it is a good company to own) but the schemes are still very worthwhile if you are paying high amounts of tax and can actually do something with the tax saved.




I couldn't care less about their sales figures. If the stock is heading south at a rate of knots, as GTP most certainly is, then all the good sales figures in the world are not going to enable you to make money from it, except for dividends.
If the long term outlook for the stock is as favourable as your comments suggest, then one day the market will recognise this fact by buying up the stock with sufficient enthusiasm to cause a new uptrend.
If or when that happens, I might consider buying it.
But in the meantime I'd sooner make the plunging stock price work to my advantage by shorting GTP, rather than hold a long position and see the value of my investment evaporating week by week while I hold on and hope that one day it'll come good.
Alternatively, I can invest in other stocks that are currently uptrending, or short other stocks that are currently downtrending, rather than invest in something like GTP that might (or might not) start uptrending at some time in the future.

Irrespective of whether GTP's cattle scheme is bogus or legitimate, the bogus agricultural schemes of the past have left something of a sour taste in the mouth of investors. Accordingly, some investors are wary of GTP's cattle scheme.
In the case of GTP, their wariness may be founded or unfounded - I neither know nor care. But such wariness definitely does exist towards agricultural schemes in general, including GTP's scheme, and is not conductive to a buoyant stock price.
Hence we see GTP caught in a savage downtrend, and until the markets perception of GTP changes, the downtrend will continue. 

Bunyip


----------



## Jackob (14 August 2006)

Portfolio said:
			
		

> ...The financial model for the cattle project means investors will get back more than double their money over the next 7 years (the research estimates the after tax IRR of "up to 24.8%).  ... Have a look at the independent research on all of their projects if you actually want to know how they work.  ...




Those "research" reports may not be really "independent" at all.  What we don't know was how much GTP have paid for "independent reports".    Westpoint also had good "independent" reports and pay a hefty 10% commission to "planners", but nevertheless collapsed.

If cattle could earn 24.8% pa for the investors, then since shearing 50-50 with GTP, the total profit should be 49.6% pa, or say p/e=2. AAC, being a company of p/e=20+, would be a biggest fool in the market to sell that property 10+ time cheaper to GTP.  A p/e=2 price is just not possible anywhere in Australia.

Just wait for at most one year and see how much (24.8% pa as you said or a meagre 1-2% pa as I said) the cattle investors would get from GTP.


----------



## bunyip (15 August 2006)

Jackob said:
			
		

> Those "research" reports may not be really "independent" at all.  What we don't know was how much GTP have paid for "independent reports".    Westpoint also had good "independent" reports and pay a hefty 10% commission to "planners", but nevertheless collapsed.
> 
> If cattle could earn 24.8% pa for the investors, then since shearing 50-50 with GTP, the total profit should be 49.6% pa, or say p/e=2. AAC, being a company of p/e=20+, would be a biggest fool in the market to sell that property 10+ time cheaper to GTP.  A p/e=2 price is just not possible anywhere in Australia.
> 
> Just wait for at most one year and see how much (24.8% pa as you said or a meagre 1-2% pa as I said) the cattle investors would get from GTP.




In other words, Jackob is telling us that when a company puts out a favourable report about any aspect of its business, prudence should tell us to take the information 'with a grain of salt'. 
I certainly agree with him. In my early days of involvement in the stockmarket I was an avid reader of company reports, the Financial Review, the business pages of The Australian, brokers reports, and a bit further down the track, Shares magazine.
Over time I became increasingly dubious about the usefulness of the information presented. In many cases the unfavourable events that unfolded a bit further down the track in relation to a company, were in sharp contrast to the earlier positive reports about that same company.
Companies naturally paint as rosy a picture as possible about their business, even if it means stretching the truth.
Brokers and financial journalists are equally adept at spinning yarns and misrepresenting the facts.
Have the facts been mispreresented with regard to GTP? Time will tell...the chart will tell the story. 

Bunyip


----------



## 3 veiws of a secret (15 August 2006)

Question ! Does GTP trade carbon credits for its plantations?


----------



## Jackob (16 August 2006)

Not yet.  Australia hasn't signed the Kyoto agreement.  Hopefully if the Labor wins the next election.


----------



## CanOz (16 August 2006)

yeah and thats always good for business!


----------



## Sainter (17 August 2006)

ITC does not offer carbon credits as the wood is eventually used for a disposable purpose, eg making paper, hence any carbon credit gained during growth than has to be paid for in its subsequent use. GTP is no different. It would onnly be a credit if it got locked up and never touched again.


----------



## namkey (25 August 2006)

Up 4.1% so far today. Anyone have any news as to why or is this just the buyers coming back after it was over-sold?


----------



## michael_selway (25 August 2006)

namkey said:
			
		

> Up 4.1% so far today. Anyone have any news as to why or is this just the buyers coming back after it was over-sold?




Will it surprise with its final result?

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 44.8 54.0 58.7 
DPS 14.0 15.0 17.0 18.0 


thx

MS


----------



## Porper (25 August 2006)

namkey said:
			
		

> Up 4.1% so far today. Anyone have any news as to why or is this just the buyers coming back after it was over-sold?




Why do you say it was over sold ?


Is this from a technical point of view or fundamental ?


----------



## namkey (25 August 2006)

I was actually just suggesting that buyers were coming back after it was over-sold. No fundamental or technical backing behind that guess of what was happening


----------



## Duckman#72 (31 August 2006)

namkey said:
			
		

> I was actually just suggesting that buyers were coming back after it was over-sold. No fundamental or technical backing behind that guess of what was happening




Coming back up pretty well the last week or so. Gives namkey's comment some credence.

Duckman


----------



## michael_selway (31 August 2006)

Duckman#72 said:
			
		

> Coming back up pretty well the last week or so. Gives namkey's comment some credence.
> 
> Duckman




was teh annual result above ro belwo expectatiosn u think?

thx

MS

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 48.6 58.1 63.8 
DPS 14.0 19.0 24.0 29.0


----------



## Duckman#72 (1 September 2006)

michael_selway said:
			
		

> was teh annual result above ro belwo expectatiosn u think?
> 
> thx
> 
> ...




Pretty close to what was expected in my view. Still handy EPS.

Regards

Duckman


----------



## Jackob (1 September 2006)

michael_selway said:
			
		

> was teh annual result above ro belwo expectatiosn u think?
> 
> thx
> 
> ...




Revenue           63%    up
Finance costs   380%   up 
Profit                 5%    up
Basic e/s            5%    down

Can't handle why these numbers would swing from one extreme to the other.

More insto down gradings will follow.


----------



## michael_selway (1 September 2006)

Jackob said:
			
		

> Revenue           63%    up
> Finance costs   380%   up
> Profit                 5%    up
> Basic e/s            5%    down
> ...




*Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 41.7 46.7 54.7 58.1 
DPS 14.0 16.5 19.0 22.0 * 

Basically i think its goign up atm, beacuse it went down too much when i was $4 to $2.2, but it was only 10% below expectaions in EPS it turned out

"The profit result translates into basic earnings per share for the year of 43.78 cents"

thx

MS


----------



## Jackob (3 September 2006)

michael_selway said:
			
		

> *Earnings and Dividends Forecast (cents per share)
> 2005 2006 2007 2008
> EPS 41.7 46.7 54.7 58.1
> DPS 14.0 16.5 19.0 22.0 *
> ...




Hi Michael,

The e/s forecast figures you quoted above from CommSec are not the "basic e/s", but are all *"diluted e/s"* calculated with a method which is more strict than that used by GTP itself.  For example, the GTP 2005 e/s Comsec used above is 41.7c, 0.55c lower than GTP's own diluted 2005 e/s of 42.25c.

If we apply the same 0.55c deduction to GTP’s own diluted 2006 e/s of 41.56c, this year's diluted e/s result should be 41.01c in ComSec's view.   The brokers consensus prediction 46.7c is ~14% higher.

Behind the disappointing e/s figure, more seriously is the increase of bank debt of $465m, or say $1.50/s, in the past 6 months.  The new bank debt will pull down GTP's e/s by ~$0.12 per share per year.  This will in turn reduce the value of GTP by $1.50/s based on a discounted-cash-flow calcution.  This is why we may say more downgradings for this stock are on the way.


----------



## Portfolio (4 September 2006)

Taking on $1.50/share of bank debt will only reduce the company valuation by $1.50/share if they blow the lot at the track.

I think it is a good move taking on debt as it will stop the equity raisings. Look at TIM's bank debt and PE. The market has been rewarding them and discounting GTP for their capital structure.


----------



## Jackob (4 September 2006)

Agree, GTP and TIM are a bit different.

This year GTP's bank debt exploded from nil to $465M ($1.50/s), which is even bigger than its whole sales revenue, while TIM only issued $90M unsecured notes equivalent to 33c/s.  No wonder the market would react accordingly.


----------



## Portfolio (5 September 2006)

Good to see Colonial First State is buying the stock.  After yesterdays briefing i didnt think they would be a buyer of the stock but the price and earnings must have been too tempting.

This stock can be hard to exit as well so they must have faith in the longer term prospects.


----------



## michael_selway (5 September 2006)

Jackob said:
			
		

> Agree, GTP and TIM are a bit different.
> 
> This year GTP's bank debt exploded from nil to $465M ($1.50/s), which is even bigger than its whole sales revenue, while TIM only issued $90M unsecured notes equivalent to 33c/s.  No wonder the market would react accordingly.




Yeah thats true, that Debt is a worry

Would you favor GTP or TIM now at current prices?

thx

MS


----------



## Jackob (5 September 2006)

Hi Michael,

In a long-term, both are bad, but GTP is worse.

In a short-term, I've no idea.


----------



## Out Too Soon (8 September 2006)

*Re: Great Southern Plantations*



			
				abucs said:
			
		

> Look guys, anybody can say a stock is no good when it's heading south.
> 
> Most of you guys are short term orientated and I don't really see the point in continuuing posting if there is no intelligent comments on the stock.
> 
> ...




Onya Abucs where ever you may be I'm green with envy.(no green w envy smileys avail at present)
As I noted in July I'm waiting for the doomsayers (Good work Bunyip! & co), to do their bit and I'll be back in. GTP is a stock for patient investors.  GTP is borrowing for further expansion, meaning eventually higher sp again, I wonder if the knockers will still be making comments on this thread in 8 mths time or feeding me humble pie.


----------



## bunyip (8 September 2006)

*Re: Great Southern Plantations*



			
				Out Too Soon said:
			
		

> Onya Abucs where ever you may be I'm green with envy.(no green w envy smileys avail at present)
> As I noted in July I'm waiting for the doomsayers (Good work Bunyip! & co), to do their bit and I'll be back in. GTP is a stock for patient investors.  GTP is borrowing for further expansion, meaning eventually higher sp again, I wonder if the knockers will still be making comments on this thread in 8 mths time or feeding me humble pie.




Doomsayer my foot! Get your facts straight mate, I made no forecasts about the future of GTP, I simply said that the stock was in a downtrend, and if it ever started uptrending, that was the time to buy it.

Bunyip


----------



## pacer (8 September 2006)

Watching with interest.....hehe always a bit of conjecture here .....buy low sell high...waiting for a bottom then buy long, short term till a down, if there is one then buy again at the bottom............could do a rinker though.......beware!!!!!!!!


----------



## pch (12 September 2006)

While I have absolutely no doubt that GTP share price is the reason that they are changing to debt rather than dilution, I had a look at some recent announcements to understand this loan more.

So first up it is structured that in 2012, GTP repays $258odd million from a borrowed amount of $215mil. Of this, $140 million is actually used to fund the business.

There is no impact on cashflow until 2012 because some $70mil is used to purchase an annuity based debt instrument to deal with interest. Then in 2012 they can refinance this debt or pay it out..

Seems they have picked 2012 because if you believe them, this will be the biggest year for land rotation, which supposedly saves them $350mil in capex for that year. So if you believe that, then it seems on the surface they have plenty of room to pay out the debt in 2012.

But those figures assume a "second Tiwi rotation", which I haven't looked into. If their figures are believable, then if they could pay this loan out without a major cashflow impact, then the years thereafter would benefit greatly. 

Anyway, I'm certainly not a GTP bull, but I'm not as bearish as Jackob. Unlike many industries, these assets are finite in the sense that a competitor cannot just come in create a faster, new model and will not lose value (like building a car factory of buying new planes). 

I haven't yet gone back and reexamined the level of dilution that has happened over the last 5 years, but one would need to do this, to see how outlandish this debt instrument is in relation and how likely it will be that they need to do this all over again in a couple of years..

regards

P


----------



## Portfolio (14 September 2006)

Buy this stock before the MIS announcement. It will rocket up and then the traders will wade in and push it higher.  Look for a $3.50 exit.


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## michael_selway (14 September 2006)

Portfolio said:
			
		

> Buy this stock before the MIS announcement. It will rocket up and then the traders will wade in and push it higher.  Look for a $3.50 exit.




when is the MIS annoucment? what isit about?

thx

MS


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## Portfolio (14 September 2006)

The reason this stock has been hammered or rather that it consistently trades on such low multiples is its earnings arent seen as sustainable.  There is a belief that govt will change the laws that govern their investments which might reduce their tax effectiveness or popularity.

There is no date for a final announcement but the govt is debating the issue at the moment. 

The point is the stock will rally no matter what the announcement.  If it upholds the laws the stock rallies as its earnings are "sustainable".

If the govt makes a small change to appease the farmers but wont really change the earnings the stock should also rally.

If the govt axes the laws analysts will focus on the NTA of this company and value it as an asset play and the stock should rally.


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## Duckman#72 (14 September 2006)

Portfolio said:
			
		

> There is a belief that govt will change the laws that govern their investments which might reduce their tax effectiveness or popularity.
> 
> There is no date for a final announcement but the govt is debating the issue at the moment.




I agree Portfolio. The interesting point has been the level of support that the MIS's have had through some of the MP's. There seems to be some strong opponents but some equally strong supporters.

Great Southern seem to be one of the leading players lobbying the MP's. If they can just tweak some of the rules relating to the cream that financial planners get maybe thew Govt will walk away with only some minor industry rule changes.

Duckman


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## Julia (14 September 2006)

Portfolio said:
			
		

> The reason this stock has been hammered or rather that it consistently trades on such low multiples is its earnings arent seen as sustainable.  There is a belief that govt will change the laws that govern their investments which might reduce their tax effectiveness or popularity.
> 
> There is no date for a final announcement but the govt is debating the issue at the moment.
> 
> ...



I'm happily out of GTP these days but my interest rallied when I heard Bill Heffernan talking about the basic unfairness of MIS businesses on the ABC's "PM" programme this evening.  Heffernan is a farmer and I think we shouldn't underestimate his influence within the government.  He is one of John Howard's closest friends and advisers.  

If the tax ruling was changed, rendering GTP less attractive to high earners, I can't believe the outlook for the SP would be anything but negative.

Julia


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## Sultan of Swing (14 September 2006)

Hi Portfolio

You seem to have a bit of insight into GTP and this type of company. I also couldn't help but notice that out of the 10 posts you've made on this forum, 8 have been in this GTP thread.

Do you mind if I ask you if you have any closer or larger interest than perhaps being just a share holder?

Cheers
SOS

NOTE: I'm a small time investor and have held a few GTP for about 12 months which are currently worth less than the price I paid for them. I'm debating whether to hold or take a loss and get on with it.


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## Portfolio (15 September 2006)

I do have some added insight in that I use their products for my clients.  Therefore I get to see mgt when they come to town and get to do site inspections annually with large clients.

Part of the research process for their products is understanding the company as this is the biggest risk factor with MIS fund managers.


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## Duckman#72 (15 September 2006)

Duckman#72 said:
			
		

> .... can just tweak some of the rules relating to the cream that financial planners get......




No offence Portfolio.


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## Sultan of Swing (15 September 2006)

Portfolio said:
			
		

> I do have some added insight in that I use their products for my clients.  Therefore I get to see mgt when they come to town and get to do site inspections annually with large clients.
> 
> Part of the research process for their products is understanding the company as this is the biggest risk factor with MIS fund managers.




Thanks for that Portfolio.

Knowing from which angle you're coming from is useful. I'll take it on board and hold for now in the hope that what you say about it rallying will come to pass.

As you can see, me taking advice from a stock forum shows I still have a lot to learn. 

I've more than likely bought them for all the wrong reasons in the first place. Eg; low PE; they were down off a high, etc etc. For a while there I was nicely in profit but still have to figure out when to take a profit and when to hold. (Paid 3.07, watched them climb to 4.20, and at ~2.50ish am still holding.   )

Cheers


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## Nicks (6 October 2006)

Now is the time to buy GTP. This is a good price, excellent PE and unlikely to get any lower.

The reasons:
- The net profit dropped this last year due not to revenues dropping but to cost increasing. These costs are due to setting up investment projects, which are what will return in 2007 2008.
- wait till 2007 2008 and the share price will reflect the value by then
- The PE is fantastic, ridiculously cheap
- The dividends are great, so imagine what they will be when the projects they are investing in now start returning.
- Its blue chipped and gearable at 60% I think (because the lenders see this as low risk)

Buy more if you have the capacity!


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## Julia (6 October 2006)

Nicks said:
			
		

> Now is the time to buy GTP. This is a good price, excellent PE and unlikely to get any lower.
> 
> The reasons:
> - The net profit dropped this last year due not to revenues dropping but to cost increasing. These costs are due to setting up investment projects, which are what will return in 2007 2008.
> ...




Nicks,

This level of ramping is a bit over the top, isn't it?

Julia


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## Vainglorious (6 October 2006)

Nicks said:
			
		

> Now is the time to buy GTP. This is a good price, excellent PE and unlikely to get any lower.
> 
> The reasons:
> 
> - The dividends are great, so imagine what they will be when the projects they are investing in now start returning.




The goal of a MIS company is the management fees and let the suckers ("growers") who invest in agricultural products for tax reasons take all the risks.  There is unlikely to be much profit change from maturing projects (I could be wrong about the specifics of GTP)  Don't get me wrong, I made a tidy profit holding TIM over the past few years but not once did I give much thought to how much money any of the actual commodities would make.


Disclaimer: I hold no interests in any MIS company


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## 2020hindsight (6 October 2006)

Nicks said:
			
		

> Now is the time to buy GTP. This is a good price, excellent PE and unlikely to get any lower.



Didnt I hear that they were recommending planting grapes recently - and then a few months later, grapes were being ploughed into the ground?
Sounds like smooth salesmanship to my untrained ear.


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## GreatPig (7 October 2006)

My technical interpretation:

GTP is currently trading in a band between the $2.40 ish level that was support back in early 2004 and the $2.70 ish level that was support in late 2005 and briefly earlier in late 2004, and is now acting as resistance.

I think it's currently forming a bearish triangle, with similar bottoms but lower highs, in an overall downtrend.

Personally I'd want to see movement up towards $3, perhaps with a retest of the $2.70 ish support level, before I'd consider it an investment buy. A drop below about $2.20 would indicate a continuation of the overall downtrend.

Trading within that $2.40 to $2.70 band would be wait-and-see for me.

All just my personal interpretation and opinion of course. Not intended as advice.

Cheers,
GP


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## Sean K (7 October 2006)

I agree GP.

I think there's every chance this could see $1.50 if it doesn't hold at $2.50. Upward resistance at $3.00, then $3.25, a break above this would see it perhaps move out of the sideways and downward pattern it's been in since Feb 05. Needs to clear $4.00 really to be confirmed upward move, which is a long way off.


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## Out Too Soon (13 October 2006)

GTP is currently forming a round bottom with a head & sholders a round square pattern to a pointy iscosce---
woops sorry! : 

GTP is heading up with the rest of the ASX as it has done previously, hopefully it will again push towards $4 then I will take tidy profits & laugh at the posts months later when the dreaded tax rumours have knocked the sp down again.


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## Nicks (17 October 2006)

GP its broken 2.70.

I was looking through the Annual Report a couple of weeks ago, and thought, hmmm well they have accumulated more expenses/debt over the previous financial year and my first reaction was crap. But then I thought, well this is due to the investments they have been preparing, which are due to start returns next year. This is textbook good business strategy, they are investing (which has associated costs) funds for future return.

I think with its PE, divs and the projects that are about to start bringing good returns has caused investors to sit up and start taking notice of GTP, and the buying now reflects thos who are prepared to wait for 4-6 months or so for excellent returns at low risk, for if we wait till 2007 the sp will not have waited. 

$4 again by Feb / Mar, and it has done it before in the same pattern, and it will be worth it more than it was last time it hit $4 early this year. Nice opportunity now for a stable 30%+ return, but at an opportunity cost of 4-6 months.


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## Nicks (17 October 2006)

and as expected up a steady 1.5% today, as it reliably has been for the last couple of weeks now.


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## Out Too Soon (17 October 2006)

Hi Nicks! where on a winner here, I'll be getting edgy around January/february tho when hopefully we could see highs well above $4 (maybe $5?)  This stock is great to hold medium term i.e 3-4 months, it will fall by some amount leading up to tax time next year again tho.


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## grumpee boi (17 October 2006)

Just an interesting anecdote about GTP.  A colleague of mine told me of one of his good mates and his bonus scheme at GTP.  He was a business development manager and had a base of 130k.  The worst bonus he ever earned at GTP was 300k in one year.  Had he been there the previous year it would have been 750k.  BDM's develop business with advisers.  Huge commissions in agribusiness - advisers can get up to 10%.  Speaks volumes about the profit margins.


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## Out Too Soon (30 October 2006)

Looks like GTP's one of those contrary stocks that like to confound everyone. While everyone was taking profits elsewhere on friday GTP continued slowly upwards. I do believe the trend will continue into early next year but I am surprised there wasn't a slight correction on friday along with the rest of the market.


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## savtin (30 October 2006)

That is because GTP is so undervalued its not funny......treasury is soon to release their resolutions on the tax treatment of forestry MIS and i think it will be favorable for GTP....and once that uncertainty is out of the way until 2013 at least..............you will see a large re-rating of the stock....IMHO.

I got out of this stock when it was $3.80 (before the huge tumble) and got back in recently below $2.40 as it was starting to move up.......things looking good.


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## Out Too Soon (30 October 2006)

I got out at $4.01 in April  Bought back in in Sept @ 2.58, lokking forward to the ride even if it's not as exciting as a Zinc stock.


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## 123enen (30 October 2006)

Don't be felled by the timber glut 
The Intelligent Investor, 21/08/2006

The offer of a tax break has led to a huge rise in timber production, and it could spell trouble for investors. 

Leaving aside English referees and Italian left wingers, there are few things that'll put an Australian's back up more than a tax bill. As a nation we'll seemingly do anything to avoid paying the taxman a share of our hard-earned cash, but to let tax matters dictate investment decision-making is to let the tail wag the dog. 

Most investment propositions sound wonderful on the day they're presented to you, but rarely work out as well as the initial forecasts suggest. But when the primary purpose of an investment is to bypass the taxman, promoters seem to get away with even more outlandish forecasts than usual. 

Agricultural products appear to sell best. The tax laws allow a 100% deduction for the upfront investment, after which the revenue is 100% assessable (as opposed to spreading the cost of the investment over its earning life as with most other businesses). The key to making a stack of money as a promoter is to put a lot of time between the punters making their investment and realising they haven't made a return. 

Tidal wave of supply 

In the late 1990s, vineyards were the tax deduction of choice. The number of hectares planted each year jumped from 7,825 hectares in the 1996-97 year to 16,048 hectares in 1998-99, a 205% increase over two years. Vineyards take a number of years to start producing and then a number more before they reach maturity, so the promoters were able to keep on selling while a tidal wave of supply was already on the way. 

The full effects are only now being felt, with prices for wine grapes down 14% in 2005 to chalk up their fourth annual fall in the past seven years. We don't know of any specific project details but, given the highly publicised troubles of McGuigan Simeon and Evans & Tate, it's unlikely investors have too much assessable revenue to worry about. 

These disastrous returns have put vineyards on the nose, so the tax 'savvy' are looking elsewhere. We think they'll lose money there too. 

Timber plantations have been around since the mid-1990s. Great Southern Plantations, the country's largest promoter and manager of timber plantations, sold its first woodlots in 1994. Investors put their money in a managed investment scheme (MIS)-typically a one-third hectare timber plantation-and receive the proceeds of the timber harvest after a number of years. The vast majority of plantations in Australia are hardwood chip plantations with a standard life of 10 years. 

Demand for deductions 

Ten years gives the promoters a huge head start, significantly more than the vineyards, before the economic realities of their actions hit home. And they've certainly taken advantage of it. The number of hectares planted to hardwood timber plantations grew astronomically in the late 1990s, reaching 126,211 hectares in 2000. Investors' demand for deductions waned a little following the stock market slump of 2002-03 but it has returned in force over the past couple of years. 

As with the vineyards, the effect of increased supply isn't known until the projects are harvested-but you don't need to be an economics professor to work out it won't be pretty. 

Dr Judy Clark from The Australian National University's Centre for Resources and Environmental Studies presented some numbers in a recent submission to Treasury. According to Clark, Australia already accounts for a third of the global hardwood chip trade (at the moment mostly from native forests). Hardwood plantation chip exports, though, are expected to grow from 2.2 million cubic metres a year in 2004-05 to an average of 10.8 million cubic metres a year from 2010 to 2014. Including native forests, that will more than double the amount of hardwood chip available for export. It's an enormous increase in supply, and the Japanese, our main export market, must be rubbing their hands with glee. For investors, though, the results could be disastrous. 

Great Southern and similar companies, including, to lesser degrees, Timbercorp and Willmott Forests, have made extraordinary profits over the past decade on the back of a tax-driven boom. Investors are about to start realising their returns, though, and our expectation is that they won't be coming back for more. 

Act of generosity 

Note 33 to Great Southern's 2005 annual accounts contains the following statement: 'On 29 July 2005 … a wholly owned subsidiary of [Great Southern] purchased all of the timber from the 1994 project for $6.4m.' That amount was a 'significant premium to the investors over and above the return they would otherwise have achieved'. 

The after-tax expense of this act of generosity was $3m, so we estimate that Great Southern sold the wood it had just bought for about $2.1m-less than a third of what it had paid for it. That doesn't sound too smart, but in the context of Great Southern's overall business it makes a lot of sense. That's because, in 2005, the company sold $304m worth of woodlots and generated a profit of $124m. If the 1994 investors had announced to the world that their returns were a mere third of the forecast returns, we doubt sales would have been anywhere near as high. 

This solution won't work, though, when the bigger projects start to be harvested. The company is predicting the timber yields on later projects will be much higher but, if our predictions about future prices are right, investors are still going to be very disappointed. 

We're not financial advisers, but we suggest you think long and hard about these agricultural products. Approach the forecasts with a healthy dose of scepticism because no tax deduction will compensate you for a serious loss of capital. 

Great Southern is already moving into different areas such as almonds and beef cattle. No matter what happens to the plantation industry, there will still be plenty of people willing to lose enough money to avoid the taxman. 


DISCLOSURE Staff members own shares in Great Southern Plantations but they don't include the author, Steve Johnson. 



http://www.moneybags.com.au/article.asp?id=368


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## Out Too Soon (30 October 2006)

So don't buy GTP's products, buy GTP   
I started off believing The Intelligent Investors line on the stockmarket.
Flight Centre   Croesus Gold    
Their info can be useful but I certainly wouldn't pay for it.  
GTP the co. is a great investment, but you have to know when to get in & out of it. Also even if the timber doesn't turn out to give a great return, which I don't understand, (have you bought some timber at the local hardware store lately?) the land that the timber is grown on is owned by GTP & must be worth a mint.


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## Nicks (30 October 2006)

Nicks said:
			
		

> and as expected up a steady 1.5% today, as it reliably has been for the last couple of weeks now.




Still more of the same.

AND as for the Intelligent Investor - they have performed so poorly with their info and recommendations. I think they are the worst performers of the 'report' / 'newsletter' crowd. Im with Out Too Soon on this one. I certainly dont pay for their advice, if they want to send me free newsletters no probs, but fortunately I didnt think their info was very valuable, or I would have lost alot of opportunities.

GTP is set for a nice year next year with good returns on the products they have spent the last 12 months or so setting up for. Check out their news and Annual Report and web site and see for yourself. Plus an awesome PE ratio and dividends. Add this to a $4 stock value early next year and youve got great CG as well.


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## Ken (30 October 2006)

this is a stock i am looking at getting also within the next few days.

how many units are you guys holding..


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## Nicks (31 October 2006)

Ken said:
			
		

> this is a stock i am looking at getting also within the next few days.
> 
> how many units are you guys holding..




Ken I hold quite a few, its good imo.... .and again up over 1% already today. I think this gradual trend increase will continue now until early next year based on past history trend and the returns on their investments next year. Im happy with that, 1-1.5% a day is great - remember the race between the turtle and the hare.

I think this is undervalued and will perform so its a good buy (although I cant recommend you buy it Ken, if I could I would).


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## billhill (31 October 2006)

Here's a bit more food for thought guys.
With pressure seeming to mount daily on the government over its incompetence on the global warming issue this stock would seem to be in a prime position to take advantage of a carbon trading sceme.
I don't know when such a sceme will be implemented but i can asure you its a matter of when not if (The next election if labour win).

It is purely for this reason why i like this stock. Definitely will be keeping a close eye on future developments.


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## Sainter (1 November 2006)

Sorry, but it cannot as carbon sequestered during tree growth is considered to be reversed when the tree is chopped down, i.e. CO2 neutral and therefore no benefit.
Cheers!


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## Nicks (1 November 2006)

Nicks said:
			
		

> Ken I hold quite a few, its good imo.... .and again up over 1% already today. I think this gradual trend increase will continue now until early next year based on past history trend and the returns on their investments next year. Im happy with that, 1-1.5% a day is great - remember the race between the turtle and the hare.
> 
> I think this is undervalued and will perform so its a good buy (although I cant recommend you buy it Ken, if I could I would).




I am now convinced this is on a steady uptrend, as again it is up over 1%. Can any one check out some technical analysis on this?


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## billhill (1 November 2006)

Sainter said:
			
		

> Sorry, but it cannot as carbon sequestered during tree growth is considered to be reversed when the tree is chopped down, i.e. CO2 neutral and therefore no benefit.
> Cheers!




Not if it goes into buildings or funiture. The carbon will still remain locked up in the wood.


----------



## CanOz (1 November 2006)

Nicks said:
			
		

> I am now convinced this is on a steady uptrend, as again it is up over 1%. Can any one check out some technical analysis on this?




It my be in an uptrend in the short term, but on the monthy chart it needs to break through the channel that its starting to decline in. Also, i would want to see it trade through the 200 ma before being optomistic on a further push upward. Only my opinion, and i would love to hear some others.....BARNEY!?


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## Nicks (3 November 2006)

Its pushing higher again, every day.

Has anyone got any ideas why this share is making 1%+ gains per day? is it just cyclic like this every year, ie it will go up to $4 and then retreat?

Its got a great pe and dividend. Im really happy with this stock.


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## Nicks (3 November 2006)

A lot of the big players are getting back on board with GTP, incl CBA two days ago. This is a good sign, and confirms the inferred value, obviously they feel there is inherent value in GTP and good prognosis for growth potential.


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## Out Too Soon (3 November 2006)

I've said previously that I believe GTP will again reach $4 then drop but the drop was expected due to tax treatment uncertainties about thier products. If the govt/ATO finally make a concrete decision on this then maybe there is no reason for the tax time downturn, the low PE ratio/good value of GTP will then make GTP a target of the big investors on a more permanent basis. Is $8 - $12 a possibility?


----------



## Sainter (4 November 2006)

billhill said:
			
		

> Not if it goes into buildings or funiture. The carbon will still remain locked up in the wood.



I agree it does remain locked up in the wood, but only for a finite time (even if that is 200+ years). Legislatively you cannot put a time on how long it will exist as furniture (notwithstanding less than 40% of a hardwood tree goes as sawlogs and furthermore that GTP trees are earmarked for chips/pulp), so the easiest thing to do is to consider it as being reversed at the time it is chopped down. I know this as I asked ITC why they didn't enter into the CO2 game with their trees (inc. hardwoods), and that's the reason I got. And to me it makes sense, as a chopped tree is a dead tree, so inevitably will decompose with time. 
Cheers!


----------



## Bongo_Boy (6 November 2006)

Maybe you are right Sainter, although there are a few views being expressed.   


http://www.nafi.com.au/news/view.php3?id=1704

It's a little frustrating not knowing what the rules might be.     

Perhaps the timber companies can get paid to keep the trees in the ground like the EC farmers get paid not to farm ?


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## Sainter (6 November 2006)

Howdy Bongo,
Thanks for the link. NAFI clearly has a barrow to push, and has been written from that angle. Indeed, use of timber rather than concrete DOES give a net benefit due to the CO2 cost of producing concrete, steel etc. The plantations may currently be net removers of CO2, butI would argue that is only due to these plantations being in a 'growth phase', if you pardon the pun. Looking forward, once plantation equilibrium is reached (x Ha planted and x Ha cut down), the net CO2 benefit will be minimal, assuming the approach I mentioned above. 
As you say, the legislation is the key.
Cheers!


----------



## Sainter (6 November 2006)

and an extra bit to follow that above: 

 Keeping them in the ground is a once-only sale for GTP and the like, and the landowners may not be too happy!
As you say, the legislation is the key, and as I see it, they cannot avoid the inevitability of gradual CO2 liberation from harvested trees.
Cheers!


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## Bongo_Boy (7 November 2006)

I don't know about a one-off sale Sainter.  If the polluting companies would be charged a yearly tax, you'd think the 'cleaning up' companies would get paid a yearly offset ?    

And a crop just planted would be worth less than a full grown crop of ten years as there would be a difference in the amount of Carbon they would take out.

And you wouldn't think the carbon would be totally reversed as the whole idea of the industry is to produce a carbon product.  If you take that line (and you may be right in that the government might) then when all of the other agricultural crops are harvested, since they are mostly carbon, they'd have to pay a tax too  ?    

Don't know when they decompose how much goes back into the ground and how much escapes into the air.

If the company you spoke to takes a different line then i could well be wrong.  (Better not invest then   ).

Very confusing though.  No wonder the government doesn't want to go near it.


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## savtin (11 November 2006)

good move friday------appears to have broken short term downtrend with a move above $2.90...................go gtp   looks ready to run?


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## michael_selway (11 November 2006)

savtin said:
			
		

> good move friday------appears to have broken short term downtrend with a move above $2.90...................go gtp   looks ready to run?




hi you got back into GTP?

thx

MS


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## savtin (12 November 2006)

Yes Michael, got in below $2.40.........was a no brainer at that price.

I do believe it is worth more than the current market price so lts see where the market values it this time....hoping for a favourable tax review from government which should give it more certainty this time and hence a higher P/E ratio..............


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## Out Too Soon (16 November 2006)

michael_selway said:
			
		

> hi you got back into GTP?
> 
> thx
> 
> MS




ARe you holding now michael? I just bought some more.


----------



## PorscheACE (16 November 2006)

Nice move...Think theres some positives on the way


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## Nicks (17 November 2006)

Certainly helps the portfolio when a stock will reliably add 1-2% per day consistently. Should gradually do this all the way up to $4+. Im happy. 

Re the no brainer comment - im with you there. I think its still a no brainer though, at the returns it gives, p/e, dividends and projects coming online next year.


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## Out Too Soon (20 November 2006)

$3.07! This is just monday morning jitters isn't it? I've got a stop loss but it's way down & Pestpac Broken is broken again.


----------



## CanOz (20 November 2006)

Out Too Soon said:
			
		

> $3.07! This is just monday morning jitters isn't it? I've got a stop loss but it's way down & Pestpac Broken is broken again.




On my intraday chart it looks like its found some support at $3.07. Pretty light volume so i wouldn't panic, think of it as some excess supply being removed from the market!

Cheers,


----------



## CanOz (20 November 2006)

Spoke too soon, just hit 3.05. .03 spread now.


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## Jackob (28 November 2006)

2006 Sept Annual report is out today.

In the short 3 month period between July - September 2007, new debt increased by $412m, or 206%, from $200m TRESS1/2 to a total of $612m, or say $2.00/s.

Total equity reduced by $73m to $682.8m.

Debt/Equity ratio increased from 29% to 90% !!!   Much higher next year!

Well done, John Young!


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## michael_selway (28 November 2006)

Jackob said:
			
		

> 2006 Sept Annual report is out today.
> 
> In the short 3 month period between July - September 2007, new debt increased by $412m, or 206%, from $200m TRESS1/2 to a total of $612m, or say $2.00/s.
> 
> ...




omg 90% is that dangerous?

thx

MS


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## Duckman#72 (28 November 2006)

Jackob said:
			
		

> 2006 Sept Annual report is out today.
> 
> In the short 3 month period between July - September 2007, new debt increased by $412m, or 206%, from $200m TRESS1/2 to a total of $612m, or say $2.00/s.
> 
> ...




Aren't the results due in part to smoke and mirrors - in that because of the nature of the business this three month period will always look very ordinary when taken in isolation. It is only due to the change in reporting period (30 September 2007) that has put the spotlight on the figures. Am I correct in thinking that had a report been tabled between 1 July 2005 and 30 September 2005 it would have also been unflattering?

Duckman


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## savtin (28 November 2006)

I wouldn't worry about these figures...i have spoken to management and it is the next reporting period they are focused on....why do you think they didn't book in sales revenue yet..............because saving it for a big year 

she will be fine ..........you'll see.


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## Jackob (28 November 2006)

Duckman#72 said:
			
		

> Aren't the results due in part to smoke and mirrors - in that because of the nature of the business this three month period will always look very ordinary when taken in isolation. It is only due to the change in reporting period (30 September 2007) that has put the spotlight on the figures. Am I correct in thinking that had a report been tabled between 1 July 2005 and 30 September 2005 it would have also been unflattering?
> 
> Duckman





The large debt increasing in the recent 3 month period is at least unprecedented.  The following is the GTP’s debts history in the last 3 years.

  05/10/2004  TRESS-2  $80 M       

  22/09/2005  TREES-3  $120 M    Total $ 200 M

  7-9/2006    Bank debt  $412 M   Total  $ 612 M


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## Jackob (28 November 2006)

michael_selway said:
			
		

> omg 90% is that dangerous?
> 
> thx
> 
> MS




Debt/equit jumped from 29% to 90%, no danger yet? But what about next year? and the year after?


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## savtin (28 November 2006)

Jakob,
The money they borrowed from the bank is not for just one year investment but for 4 years....therefore the debt won't grow every years as you believe it to be.................


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## Jackob (28 November 2006)

savtin said:
			
		

> Jakob,
> The money they borrowed from the bank is not for just one year investment but for 4 years....therefore the debt won't grow every years as you believe it to be.................




Hi Savtin,

There is no way to stop GTP from borrowing more and more debts in escalating amount year by year for every year.

I new bank debts of $412 M borrowed in the last 3 months have been spent already according its report.

I reckon GTP needs at least $500M extra debts in this FY to keep itself surviving.


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## Jackob (11 December 2006)

The $412M new bank debts borrowed in the last 3 months and the 90% debt/equity ratio look like a heavy weight pulling on the price.

Judging by the market depth and chart formation, more downside risks yet coming.


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## pch (12 December 2006)

GTP can always do a TIM and lease land.. Buying it is their principle not for this harvest period, but in future land rotations.

The only reason they are using debt instead of capital is that their huge growth in earnings have been offset in huge dilution. So what would you prefer? erosion of per share earnings via continual dilution, or funding through a debt instrument where current shareholders are not short term penalised for the future return on equity that the company will enjoy? At least via debt the burden is spread over a longer time period.

As the land they purchase becomes unencumbered the asset value will be recognized and this will also mean the debt to equity ratio will reduce again. 

So I have no problem with them borrowing to invest in quality assets that will return value for the company for many years to come. 

I have also heard that the MIS review has been completed and not a lot is going to change. The commonwealth bank seems to think so anyway - they have piled into GTP recently..


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## Jackob (12 December 2006)

I feel no much difference between equity and debt raising, as long as they both reduce e/s and push down the share price.  

What is alarming is the financial viability of GTP.  If GTP keeps raising debt like mad, how long would it last?


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## Out Too Soon (14 December 2006)

Jackob said:
			
		

> I feel no much difference between equity and debt raising, as long as they both reduce e/s and push down the share price.
> 
> What is alarming is the financial viability of GTP.  If GTP keeps raising debt like mad, how long would it last?




It all depends on what they do the the cash doesn't it.  
Personally I'm out of GTP simply because the sp headed in the wrong direction but I'm ready to jump back on as I still beleive the sp will head towards $4 ish again. All a matter of wtching & waiting.


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## savtin (14 December 2006)

Out to soon,

I too believe in the long term value of GTP and stepped back out when the SP dipped back under $3.00 recently.

I too will jump back in when she is heading in the right direction...

i don't think we will need to wait long..


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## Jackob (15 December 2006)

Latest News: Crackdown on timber tax breaks

http://www.theaustralian.news.com.au/story/0,20867,20930223-2702,00.html

Crackdown on timber tax breaks
Steve Lewis, Chief political correspondent
December 15, 2006

THE Howard Government faces an election-year showdown with the powerful forestry sector - and Macquarie Bank - after deciding to crack down on tax breaks for mass-marketed timber plantations.

Cabinet's decision, taken this week, will also ignite another partyroom brawl, with regional MPs resisting the plan to wind back the tax breaks for the so-called "managed investment schemes". More than $2 billion has been ploughed into MIS plantations since 2000, with a small group of investment firms reaping millions of dollars in commissions and fees.

The Government has been forced to get tough amid concerns "Pitt Street farmers" were snaring lucrative tax breaks at the expense of legitimate agricultural operations.

Ministers fear rich investors are abusing the tax break, with too much money in some schemes spent on managers' salaries and commissions or inappropriate projects rather than legitimate forestry plantations.

MIS funds will now have to prove that at least 70 per cent of the investment is for actual tree plantations, or their investors lose the full tax deductibility.

Senior ministers believe the tax changes will weed out speculators, and cut down on the huge fees being paid to the small number of pooled fund managers.

"The reality is that a lot of it is city money. But this will flush them out," a senior government figure told The Australian. Another source said cabinet had agreed to the crackdown because of concerns it had been "open slather" for tax-minimisers.

"The clear view is that a lot of the money (going into MIS) is being pilfered out of it by investment bankers and advisers," the source said.

Senior ministers held a robust debate about the contentious tax plan in Sydney on Monday. It is understood Peter Costello has led the charge against the tax breaks.

Macquarie Bank, Timbercorp and Great Southern Plantations have been the main backers of MIS forestry since special tax rules were introduced in 2000.

The three have formed a peak lobby group - Agriculture Investment Managers Australia - to argue their case in Canberra.

AIMA claims that commissions paid by agri-MIS projects "are no higher than other financial products". They also point to the strong growth in plantations with more than 500,000ha of timber planted since 2000 - helping Australia meet its Kyoto target.

The National Association of Forestry Industries, which played a crucial role during the 2004 election by opposing Mark Latham's Tasmanian forestry plan, has warned that changing tax laws would "disadvantage" forestry growers and reduce much-needed regional investment.

Catherine Murphy, NAFI chief executive and a former adviser to John Howard, last night backed the MIS arrangements, which she said had worked well.

"We believe that the current MIS arrangements have delivered over $2 billion to rural and regional Australia, as well as contributing four percentage points or 20 million tonnes of CO2 annually towards offsetting our Kyoto targets," she said.

Wilson Tuckey, a former forestry minister, yesterday warned the Prime Minister he would face another partyroom revolt if he tried to tighten up tax laws.

But another Liberal backbencher, Geoff Prosser, said management fees charged by MIS firms were exorbitant and distorted regional economies.


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## Jackob (18 December 2006)

Latest News: *Tax breaks for city farmers under fire*

http://www.theage.com.au/news/natio...ers-under-fire/2006/12/16/1166162374066.html#

*Tax breaks for city farmers under fire*

Carmel Egan
December 17, 2006

Senior federal cabinet ministers worried about the future of farming families want to slash the tax breaks offered to speculative agriculture schemes.

"Collins Street farmers" pouring money into almond and olive orchards and other such ventures promoted as "managed investment schemes" have been accused of distorting traditional markets and gaining unfair advantages because of their enormous buying power.

Liberals expect a party room showdown in February, a senior Government source told The Sunday Age.

Several senior ministers and the Tax Office want to see the Managed Investment Schemes (MIS) stripped of their ability to promote horticulture products to city-based investors looking for tax breaks.

A seven-month brawl between cabinet ministers over the future of similar tax breaks for MIS plantations was finally settled last week.

It was agreed to allow 100 per cent tax deductibility for investments in blue gum and pine plantation enterprises that could prove 70 per cent of their management fees were actually spent on tree husbandry.

There had been concern about the size of managers' salaries and investment in projects rather than legitimate forestry enterprises.

Tax incentives were initially offered in 2000 to MIS promoters such as Macquarie Bank, Timbercorp, Gunns and Great Southern Plantations to encourage investment in the plantation timber industry and reduce dependence on logging in native forests.

Since the tax incentives were extended to horticulture in 2001, there has been rapid expansion into new markets such as nuts, citrus, tomatoes, avocados and even dairy.

But many regional MPs are under increasing pressure from traditional farmers, who believe the MIS managers are motivated by the windfall to be made offering tax breaks rather than long-term profits, growth of agricultural businesses or what is good for the rural community.

The cashed-up schemes have been accused of buying up the water rights of desperate farmers, inflating rural property values and distorting commodity prices.

It is believed regional MPs will press for a crackdown, and that the Government will be less sympathetic to lobbying for these ventures than it was to the politically sensitive forestry industry.


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## pch (18 December 2006)

I like the stuff you post - keep it up. Its good to challenge ones reasoning. 

FTR, I was flicking through the Australian Financial Review today and they had an article that was pretty much the opposite of what you have quoted above. I could not find the article online, but it was to the effect that little was going to change to MIS rules.. 

Anyway, I don't know if you have access to it, I can't find it online sorry. But if anyone has it handy it would be worthwhile posting the gist of it here..

regards


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## Jackob (19 December 2006)

pch,

I am glad that you like my posts.  

I read the AFR articles in a library, so don't have an electronic copy either.

I reckon the 2 sides of opinions in the press are about equal (if the negative views are not prevailing), but as the newspapers, similar to the brokers, usually only put good words to stocks, thus the negative views in press deserve our more attention.


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## pch (19 December 2006)

Jackob said:
			
		

> pch,
> I reckon the 2 sides of opinions in the press are about equal (if the negative views are not prevailing), but as the newspapers, similar to the brokers, usually only put good words to stocks, thus the negative views in press deserve our more attention.




Yes absolutely agreed.. even more so with forums where the ramping and adulation is beyond a joke..  So long as people give *facts* positive or negative I find both sides of the story useful. 

I never got back to answering you on the debt vs equity thing where you saw it the same. I consider this way. The WA govt is setting on a mammoth surplus a couple billion I think.. Yet major infrastructure funding like the new railway south is funded over some 30 year period. The argument is that its only fair that the burden of paying off this assett is not just paid by current taxpayers but those that will gain the benefit from this major spend in the years to come. 

I kind of look it the same way with debt vs equity (esp when the share price is trading at low PE). If its an equity raise, then current shareholders can get hammered via the dilution when new shares are issued. 

If the company takes on long term debt, then the 'shareholder penalty' is spread over the life of that debt. 

Its of course not that clear cut, but I think this is an issue for GTP. If GTP were on a PE of 16 then I wouldn't be too fussed about then issuing equity


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## Jackob (19 December 2006)

pch said:
			
		

> I kind of look it the same way with debt vs equity (esp when the share price is trading at low PE). If its an equity raise, then current shareholders can get hammered via the dilution when new shares are issued.
> 
> If the company takes on long term debt, then the 'shareholder penalty' is spread over the life of that debt.




Say a company raises 10% new equity, then the e/s will be reduced by about 10%.  This deduction will not only affect the current year's e/s, but also all e/s of future years.  So the future shareholders can't escape the bad effects of equity increasing.

By the way, for a good company, equity or debt raising won't much affect profit margin and often e/s positive.  This is because the extra money raised will make more and more money.  For example, after an equity/debt increase to acquire North Plantation in 2001, GNS (GUNNS) doubled its e/s in the following year.  The ongoing GTP's large scale equity/debt raising has dramatically reduced (diluted?) its profit margin and dramatically increased its debt/equity ratio to a critical level only indicate of its present very difficult financial situation.


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## pch (19 December 2006)

I think that the asset you are buying is what makes or breaks my argument. If you issue capital to take over an existing company that has existing revenues, compared to buying an asset that does not return cashflow immediately and the value of the asset cannot be realised immediately, I think the debt option is better..

GTP's issue is exacerbated by AFIRS trreatment of the assets they are buying where they have to discount it by encumbrance of existing leases and the like.. In the previous regime, I think the D/E ratio would be lower as a result..


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## Jackob (19 December 2006)

pch said:
			
		

> I think that the asset you are buying is what makes or breaks my argument. If you issue capital to take over an existing company that has existing revenues, compared to buying an asset that does not return cashflow immediately and the value of the asset cannot be realised immediately, I think the debt option is better..




Debts may not have an immediate impact on share price, only if people may not be fully aware of them immediately.  GTP raised $412M debt in the 3 months of JUL-SEP 2006 and the debt/equity ratio shot up from 20% to 90% but many shareholders may not be aware even now!  But the share price has to come down later or sooner.


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## Jackob (20 December 2006)

In an after-hour announcement today (6:45pm), GTP announced a new Management Performance Rights issue of 3,245,000 options, expiring on 20 December 2011, exercisable at $0.00.  

The announcement said this rights issue was "approved at General Meeting of Members on 29 September 2004."

At present GTP share price near $3, isn't it a real $10 million robbery from all the shareholders?


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## pch (21 December 2006)

Jackob said:
			
		

> At present GTP share price near $3, isn't it a real $10 million robbery from all the shareholders?




I would agree with you if its a crap performance hurdle.. I don't have time to dig today. Any idea what they have to do before they can cash it in?


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## Jackob (21 December 2006)

God knows what sort of thing has been written in the 1-page "Results of General Meeting" "approved at General Meeting of Members on 29 September 2004"!  God knows!

That document in the AXS website is strangely not available for reading at present!


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## pch (28 December 2006)

The govt press release..

http://assistant.treasurer.gov.au/pcd/content/pressreleases/2006/097.asp

one of the many media spins..

http://www.news.com.au/heraldsun/story/0,21985,20972707-664,00.html

_"The only change is that at least 70 per cent of invested funds must be used to generate new plantations.

In future they will not be able to claim a deduction on fees and commissions paid to the promoters of MIS schemes. "_

Jackob whats your take on the MIS scheme review. Seems to me that the outcome this time round is a big yawn but they will be scrutinizing the much more exotic things (ie non timber) early in 07.. 

_"While tax breaks for tree planting can be sold politically in this era of global warming, the same argument hardly applies to myriad other tax-saving agricultural investments.

Grapes, tomatoes, beef cattle, almonds, strawberries and -- would you believe -- pearling off the coast of far northern Australia have been variously sold to city folk as tax-effective investments. "_

I don't think that cattle would cause too much of a problem for GTP but grapes?  I also wonder how hard TIM will have to fight for the tax breaks it enjoys for mango, avocado and almonds?


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## Nicks (28 December 2006)

Jackob said:
			
		

> In an after-hour announcement today (6:45pm), GTP announced a new Management Performance Rights issue of 3,245,000 options, expiring on 20 December 2011, exercisable at $0.00.
> 
> The announcement said this rights issue was "approved at General Meeting of Members on 29 September 2004."
> 
> At present GTP share price near $3, isn't it a real $10 million robbery from all the shareholders?




Be nice to know on what grounds they are entitled to this for.


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## pch (30 December 2006)

Nicks said:
			
		

> Be nice to know on what grounds they are entitled to this for.




Yep, so I went and had a look.. Some detail on this and other stuff below. I delved into the Sep 30 report for a completely different reason, but some stuff I felt should be noted here for discussion.

My good friend Jackob quite rightly pointed to GTP's high debt to equity ratio so I had a look at this. He quotes 90% which looks to be the borrowings of $615 mil against equity of $682 mil. So I took a look at the overall position including long term debt, and a couple of things are noteworthy.

They always seem to have deferred revenue listed in liabilities. This year its $150 mil. This is revenue received that cannot be recognized until the project its related to is started next year. 

They have $45 mil in provisions, a lot of which is propping up crappy projects in 1996. here is the note on this.. judge for yourself will happen again?..   

_"The first three year’s projects, being the 1994, 1995 and 1996 Projects do share some common characteristics, in that they were the first of the Group’s plantations projects, management was outsourced and processing is to be completed through an independent contractor for a fixed fee based on relatively low throughput volumes and additional resource had been previously acquired for possible use in the projects.

*It is the board’s current view that no consideration will be given to incurring similar expenditure for the 1997 or subsequent projects.*"_

My original reason for taking a look at the balance sheet however was this new 70% rule. Where _"investors in forestry MIS will be entitled to immediate upfront deductibility for all expenditure provided that at least 70 per cent of the expenditure is expenditure directly related to developing forestry (‘direct forestry expenditure’).  Direct forestry expenditure comprises:

(a)        expenditures associated with planting, tending and harvesting of trees at any time over the life of the investment; and

(b)        annual costs of the land used to develop forestry, whether that be effective rental costs or lease payments for land.  "_

My concern was that my 2009 and onwards, GTP will require much less capital expenditure for land as they will start to rotate their existing assets. This would translate to a much improved profit margin by then. How would this impact the 70% rule though? 

I am still not sure of this, but I suspect that definition b above covers it. GTP will charge a rent at market rates and the growers will be able to still get their tax deduction. I assume provided that the rent charges are demonstrated to be at market rates they should be okay, but I will seek clarification on this. 

For what its worth, there was another quote from the report that I found interesting.. First up the justification blurb for their aggressive land aquisition program.. (I've cut out all but the important bits)

_"The strategy of purchasing rather than leasing the majority of the land required for the Group’s plantation projects has a number of benefits, including:
It provides Great Southern with long term asset stability,
Great Southern benefits from the capital appreciation of the land, which is generally prime agricultural land in higher rainfall areas near to ports,
The land will be available to continue to raise revenues after the conclusion of the projects. This will then significantly increase free cash flow as revenues will be generated with no capital expenditure required for land purchase, and
Ownership of land provides security of tenure to investors, as well as a level of assurance to purchasers of the end products (woodchip), who are looking for secure long-term resource supply."_
[snip]

then this..

[/I]"The land is expected to produce significant future cash flows to the Group in the form of lease rentals charged to growers, new arrangements entered into with investors and possibly its eventual sale."[/I]

Sale? I never considered that.. but hey if shareholders can get a better return from selling the land after a decade.. hmmm

And finally, Nicks, in relation to the performance bonuses, they remind me of an active managed fund (and thats not a good thing). Basically, if they do better than the average total shareholder return of the S&P/ASX 200 Industrials Accumulation Index, the directors get their bonuses. This is slightly simplified, but here's the deal.. 

Below 51st percentile            Nil
51st percentile                    52% of Rights exercisable
75th percentile                    100% of Rights exercisable

So even if the overall index goes negative, so long as GTP are slightly less negative, they get their bonuses   

I don't know the date ranges either (its probably buried in there somewhere) - I just hope that the timing of this new issue is based on an anniversary than an opportunistic issue based on a recent crappy share price performance making it the performance goal easier to achieve


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## Jackob (1 January 2007)

Pch,

Thanks for digging deep into the issues.

*1) Performance bonus rights.*

I still can’t read the GTP announcements properly in the ASX website.  I could only once read the GTP relevant announcements and see that a 2004 special general meeting approved issuing 12,500,000 options to Cameron Rhodes (Executive Director, General Manager) in the following 3 years under certain constraints you have quoted 

Below 51st percentile Nil
51st percentile 52% of Rights exercisable
75th percentile 100% of Rights exercisable

Not sure whether these conditions is applicable to share price performances 1 or 3 years prior or after the issuing.

Don’t know whether this years 3,245,000 options were all to C. Rhodes and why it was at such an amount.  Didn’t find similar options GTP issued in the past 2 years (or I missed them).   

*2) The new 70% requirement on “direct forestry expenditure”.*

To understand GTP’s income and expenditure in its annual report, we first have to understand that the whole GTP’s pulpwood project “income” is all the upfront lump-sum payments of the projects in the 11-year life-span, of which the growers have only paid 10% deposits by the end of the each FY (30 June).  So the 90% of the money are not real cash at all by that time.   However, all the commissions to financial advisors, all expenditures, profit, taxes, interest on debts, dividends, … in the very same financial year are all generated from this fictitious money.  And you guess where the money is from?

There is no doubt that GTP’s real “direct forestry expenditure” is well above 70% of the revenue.  Say last year GTP got ~$300M revenue from woodchip project and ~$150M from the non-woodchip ones – a total revenue of ~$450M in FY 2006.  At same time in order to establish these projects, GTP raised about $400M+ new bank debts in 2006.  At a moderate rate 10% p.a., the total interests of the debt in 11 years will be $440M, which will wipe out nearly 100% of the whole revenue, let alone the money needed to pay the commissions to financial advisors, all other expenditures, profit, taxes, interest on the old debts (TREES-2/3), dividends…  And would you guess again where the money could be from…

I have got the question for a long time: How could GTP raise $400M+ bank loans to generate $450M revenue, then spend them all, and still be able to claim a $170M+ “profit (be fore tax)” in FY2006?   

I reckon it is the high time now to let GTP tell us the TRUE cost and profit (if any) of the woodchip (and other) projects in their whole life cycles.  And I also reckon this is the ultimate purpose of the government new regulation.


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## reece55 (1 January 2007)

Jackob
Have another look at the financial's - the $400 Mil in extra borrowings was not all new - about 300K of this was used to refinance Current Payables and existing current financial facilities. So, realistically they actually just converted some debt that was due and refinanced and increased net debt to about $100 Mil. I note that they also have hedging in place for interest  now, so obviously their treasury dept. is in gear. The provisions question however is an interesting one - those projects from 94 -96 yielded such bad returns for the investors that GTP felt they had to subsidize them (well, thats my understanding anyway)...... I wouldn't be knocking the model however - most of the 90% portion of the investor loans are all off book - securitised by a bank (Adelaide Bank ). So there is actual cash flow from the bank, to GTP, to investors, etc.etc. The added benefit from the securitisation process is that they are non-recourse loans to investors - i.e. the only security is the plantations themselves, so GTP has no exposure. The best thing about the whole system is the NPV effect - if you can save 46.5 cents in the dollar now on tax for investment elsewhere, you don't need a large return 11 years down the track for it to have been beneficial to you. Certainly there are some questions on the sustainability of their model, but I would have to say that their current earnings are probably ok!

Cheers
Reece


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## Jackob (2 January 2007)

Hi Reece,

Thanks for the comments.  But I have to dig deeper into GTP’s accounts.

A short history of GTP’s debts in the last 3 years is as follows.

05/10/2004 - - TRESS-2  $80 M 
22/09/2005 - - TREES-3 $120 M - - - - Total $ 200 M
(by) 30/9/2006 Bank debt $412 M - - - Total $ 612 M

The newly obtained debt in the FY 2006 (1/7/2005 - 30/9/2006, extended by 3 months due to the change of FY period) is actually $120M (TREES-3)+$412M=$532M.  Before 30/6/2005 the only debt GTP got was just $80M TREES-2 with no bank loans at all.  The $245M refinance (on 15/9/2006, drawn to $200M at 30/9/2006) was for “existing cash advance and hire purchase facilities”, which all happened during the FY 2006.

By 30/June each year, what the growers have paid is only 10% deposits on the 11 year woodchip project.  It’s impossible that any securitisation can be done on the rest 90% of the unpaid money by the same date.  But GTP always take the full 100% amount as its “income” in its Income Account to pay off all its expenses, such as the commissions to financial advisors, office expenditures (including JY’s $1M+ income!), interest on debts, taxes, and generate a big “profit” and dividends, … in the same FY ending 30/6.

I have no doubt that such a GTP model will not be sustainable even if there weren’t any government regulatory changes, but the upcoming new 70% on tree husbandry requirement would certainly reveal more of the nature of  GTP’s account practice.

Cheers!


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## pch (2 January 2007)

Hi Jackob

Its obvious by now I'm no accountant and god my maths is crap so I asked a friend who holds a lot of GTP and this is the gist of his response..

Money from investors in allotments is not income. The investors are creditors and have effectively lent money to GTP to plant trees.  Here's a simple example based on $10k..

GTP gets paid $10K from investor. They've got $10K in the bank and a $10K creditor. They do something worth $1K (plant trees, soil treatments, management fee, whatever...). They've got $10K in the bank, $9K creditor, have earned $1K (income)
Over the next ten years they earn $1K a year, gradually diminishing the size of the creditor. until finally they aren't a creditor any more and the $10K now belongs wholly to GTP.

During this time, GTP declared $1K income each year for 10 years as opposed to $10K income in year 1 and $0 income in years 2 - 10.

CASHFLOW, was $10K in year one followed by 9 more years of negative cashflow as they spend the money but cashflow is not INCOME.

At the end, GTP sells the product for the investor (with a last management fee I assume)

I know that the example is way too simplistic and the timeframes and numbers are unrealistic, as well as not taking into consideration that GTP also lend money to the creditors, but it does demonstrate that present declared income is based around the previous years of projects and not all of the present FY..


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## Bongo_Boy (3 January 2007)

Hello PCH,

my level of maths is probably lower that yours.     

but wouldn't great southern's revenues (incomes) have been much less if they were only recognising 1/10 of the investors money for each year, especially when they first had their big jump in revenues  ?     

I know this company seems to defer about 40% - 50% of revenue to the next year but it seems to reflect the money they are taking over a 12 month year.

Also i think the 12 month rule only allowed deductions on the money invested if it was ALL used in the following 12 months.

Hopefully all of the timber companies will settle down now that the government has sort of made it's decision.  Now the wait is on the non timber agribusiness products.    

I think it was Jackobs newspaper post that said that some big agribusiness companies were using city dollars to buy up rural properties with the large water rights.  Which companies are doing that, does anyone know ?    

I agree with you on the director options.  If the directors like it so much then they should put their own money into their companies.


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## pch (3 January 2007)

Bongo_Boy said:
			
		

> my level of maths is probably lower that yours.




Impossible   

_but wouldn't great southern's revenues (incomes) have been much less if they were only recognising 1/10 of the investors money for each year, especially when they first had their big jump in revenues  ?     _ 

_Also i think the 12 month rule only allowed deductions on the money invested if it was ALL used in the following 12 months._

That was just an example, lucky for me my friend was on msn when I saw your post. The answer to your second question is that the *trees have to be planted * within 18 months. (its now an 18 month rule).  i.e. they can't take your money and sit on it for 5 years

I can't answer your first question at this stage, it needs much more detailed analysis and I don't beleive they GTP break down their income to that level in their reports..  suffice to say, I can guess that income is apportioned according to some formula of what work is done.  Presumably they "write off" a bigger chunk of the income in the planting and harvesting years than normal years, and maybe an above average chunk in year five when they prune the side branches so the logs will grow straight and tall.

regards


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## suhm (4 January 2007)

Didn't this have something to do with why they changed annual report dates as they collect in principle revenue before july 31st because ppl want their tax breaks but they don't recognise it as revenue until the next financial year as the services have yet to be provided so is classified as deferred revenue. I'm not an accountatnt so


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## Portfolio (6 January 2007)

Totally wrong guys. This is how it works:

1.GTP sells woodlot for $9,000 per hectare + $900 GST
2.$900 (10%) is paid to GTP upfront but this is forwarded to the ATO so no cashflow to GTP.
3.$9,000 is usually financed by the woodlot investor but securitized with Adelaide Bank in the following year therefore is cashflow to GTP.  This full $9,000 is declared as income by GTP (I don’t have the %’s with me but I think it is roughly 50% in the year it is raised and 40% the next year and 10% over the life of the project)
4.GTP spends roughly $1,500 per hectare to establish the plantations (cash flow out and expense in the year it is incurred)
5. GTP has minimal expenses over the life of the project after establishment (10% maybe)

Therefore from the sale of 1 hectare:

Profit and Loss:

1.	$9,000 income
2.	$1,500 establishment expenses
3.	$1,500 commissions / marketing etc
4.	$6,000 declared as profits.

Cashflow Statement:

1.	$9,000 received from securitized debt
2.	$1,500 paid to advisor and marketing
3.	$1,500 on establishing plantations
4.	$6,000 spent on buying the land.

This is back of the envelope type stuff but the actual figures are available in most of the broker reports.  As you can see GTP is effectively declaring a huge profit (which it is making) and using that profit to buy land.  The company is therefore not throwing off cash but is instead throwing off land so to speak.

PS: I agree the management options are robbery. Especially when they are not delivering results.


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## reece55 (6 January 2007)

Portfolio
Thanks for clarifying this for the guys - you have illustrated what I was trying to say a while back. I actually worked for Adelaide Bank in their structured finance department for a small stint and what they are securitising is the future cash flows from the woodlots. It's actually a fairly easy program to run. Like I say, dont' knock the model..... it is all about the immediate deduction for the initial payment by the investor - thats why the stock takes a tumble every time ppl start talking about changing the deduction rules for tax purposes. If teh legislation changes, this may cause headaches..... but I can't see that happening in the future because all of the pollies rely on this rule for their own big deductions!

Cheers
Reece


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## Bongo_Boy (7 January 2007)

Thanks Portfolio.

I agree the money is going into land, the cashflow seems to be the problem though.  When the price of the land got to $7,000 and the company wants to pay a 16c dividend as well, then before the 2nd use of the land the money starts to run out.   Hence the hybrid equity / debt.    

Clearly the move into cattle, olives and grapes was to help with that cash flow although initially a big expenditure is needed.  Hence the increase in the level of debt over the last two years.     

While punters wait to see if the buying of the land produces fruits,    the endless conjecture about the way the government legislation will change is a definite negative for such punters.


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## pch (8 January 2007)

Guys much appreciated for clarifying this.. next question that GTP themselves wouldn't answer..

They have published the amount of land available for rotation and in 2007 its 5000+ hectares. Below is the latest table I found..

2007    5708 ha
2008    9455 ha
2009    8519 ha
2010    12323 ha

Now the PDS and ATO rulings for 06 and earlier specify that 5000 hectares will be planted with a capacity for oversubscription. 

I have not been able to find figures on how much was actually planted year on year and thus how oversubscribed they were. 

I therefore have to assume a large amount of the old land will not be used again as the early projects were crap, but even if we halve the 5000 hectare figure for 2007, its still a big capex saving and would leave enough to pay for present dividends.. (And that crap land may be sold I assume)

thanks


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## Bongo_Boy (8 January 2007)

Wow PCH,  the company wouldn't answer     
That's not a good sign.  Did they give ANY indication.

The "crap land" idea you have with the early releases would explain that although as you say it could be sold.    

With the CAPEX savings, if you take the whole 5000 ha times the full max $7000 for land that still comes to $ 35 million.   

On 310 million shares that's only 11c per share for dividends etc

If the price of the land is $7000 then that just leaves $3000 for planting, sales, commissions, administration, tax and profit.    

If we take the price of the land as $ 5000 then that's better, but it means the capex savings is now only $ 25 million on rotated land or 8c share.

If we take half of the 5000 ha as rotated this year, that is a saving of 2500 ha times $ 5000 = $ 12.5 million or 4c a share.

I think there is still a problem with cashflow, at least in the short term, but hope i am wrong for the sake of all holding punters.


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## pch (8 January 2007)

Bongo_Boy said:
			
		

> Wow PCH,  the company wouldn't answer
> That's not a good sign.  Did they give ANY indication.




Actually I was unfair, I should have said "couldn't". I don't think it was an unwillingness issue I think it was more the info was not on hand from a phone call..

Anyway please peruse these figures below and see what you think..

I'm still trying to work out how many acres would have planted in 05 and 06. We know its $9000 per woodlot and a woodlot is .33 of an acre. If forestry sales for 06 was $314,000,000 then we divide that by 9000 and that says we planted almost 35000 woodlots. That would amount to some 11500 odd acres. I 05 works out to 11100 odd acres via the same logic.

I read, buried in I think the PDS for the 06 project, that 500 acres were rotated so they may have planted a little more than the 11500 figure.

If that is accurate (and please tell me if it is not), do you think that its reasonable to assume 11500-2000 acres for 2007, but with half the 07 5700 acres available for rotation?


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## Bongo_Boy (9 January 2007)

Hi PCH,

working in hectares, it looks like $3000 (excluding gst) per woodlot.  And one woodlot is 0.33 of a hectare.

So it would be approx 35000 hectares or 105000 woodlots for last year.

Just readng GTP's latest annual report (28 Sept) which says they aquired 35,000 hectares for the last year which seems to balance with the above.


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## pch (9 January 2007)

you just pipped me at the post.. got a call back.. my bad its $3000 per woodlot and $9000 per hectare. They plant around 35000 hectares per annum. If you do the math the $314,000,000 works out about right.

So if we stick to an assumption of half the 5500 odd ha being used for the next rotation, then 7% of the land will be rotation in 07. However I asked investor relations this and was told "Yes, if we describe it as available for rotation we would be using it in current projects". Thus it may be more like 10-15%.


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## Bongo_Boy (9 January 2007)

Hi PCH,

did they give any indication regarding your 'crap land' theory of earlier projects or the current price for the land that they are paying ?

thanks.


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## pch (9 January 2007)

Hiya

in the course of the correspondance I asked this and it wasn't answered the first time because I my fingers kept typing acres and my brain said hectares.. once we cleared that up I asked

"so in relation to the rotation of land for 07, is the amount of land disclosed as available for rotation suitable for use in current projects?"

and his answer was the quote from previous..

So later I'll try and make estimates for the non forestry stuff, where the expansion should be.. There is 9mil spent this FY that shouldn't be spent next FY (provisions for 1996 project they say is the last). If other costs haven't blown out too much, it should be an ok year. However, I haven't yet checked for/included equity dilutuion in this FY that may undo a potentially good result..


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## Jackob (12 January 2007)

Portfolio said:
			
		

> Therefore from the sale of 1 hectare:
> 
> Profit and Loss:
> 
> ...



Hi Portfolio,

Well done!    Glad to see your work after I am just back from holiday.  To make your tables more realistic, however, I would like to modify them by adding in a few more items as follows.

Profit and Loss:

1.	$9,000 income
2.	($1,500) commissions / marketing etc
3.	($1,500) establishment expenses
4.	($1,000) expenses on established trees
5.	($1,000) office expenses
6.	($  500 ) expenses on debt interest
7.	$3.500 declared as profits before tax
8.	($1,050) corporate profit tax (30%)
9.	$ 2,045 declared as profits after tax.

Cashflow Statement:

1.	$9,000 received from securitized debt
2.	($1,500) paid to advisor and marketing
3.	($1,500) on establishing new plantations
4.	($1,000) expenses on established trees
5.	($1,000) office expenses
6.	($  500)  expenses on debt interest
7.	$3,500 operating cash flow before tax
8.	($1,050) corporate profit tax (30%)
9.	$2,045 declared as operating cash flow after tax
10.	($1,000) expenses on dividends
11.	$1,045 left for buying land

Note: 
1.	GTP’s profit margin (before tax) was about 38% last year, so the $3500 profit (before tax) for each $9000 revenue is more realistic (Item 7).
2.	Items 4 and 5 are increasing year by year as the area of established trees is increasing.
3.	Debt interest (item 6) is also increasing dramatically.  Last year’s debt increased from $80M by $532M to $612M.  These debt will cost ~$65M p.a., more than 10% of the total revenue ($450M)
4.	Just 2 or 3 years ago, GTP’s pulpwood revenue doubled year by year, so the item 1 in the cash flow table should be halved for each hectare new land.

Now return to the above tables.  The $1045 cash left is not enough to buy a hectare of land, which is worth about $7000, so GTP has to borrow at least $5000, or ~56% of the $9000 revenue, from banks for it.  [As said in the Note 3, last years new debt ($532M) in fact was about 118% of the total revenue ($450M)].  Say each hectare of land still only needs $5000 debt, which cost about $500 p.a. in interest.  On the other hand, the valuation of the land is increased only 1% above inflation (say 3% pa) in long term.  So the total revaluation of the land is about $7000*4% = $280 pa, which is far less than the interest cost.  Thus the GTP pulpwood projects are actually in a chronic loss year by year, while in its accounts as shown in the above table, it still managed to have a huge profit margin (38%) and big profit and e/s so far.

So this is why people often say the GTP projects are unlikely sustainable in long-term, and why in recent years GTP’s debt is skyrocketing while its “profit” (and e/s) is flattish.  Obviously, in the coming years GTP’s profit and e/s will have to drop, and its debt will further skyrocket.


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## pch (12 January 2007)

I think your cost estimates look good.

I'm sure I read that GTP do not intend to plant much more than 35000ha per project and grow via their non forestry stuff. Thus should make it easy to test their land acquisition argument going forward.

We also have the land rotation figures, so we should be able to produce a cashflow/pl statement year on year and see how it looks incorporating reuse. 

The current land reserves should be there also, so we should be able to determine when they will need to borrow again..


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## pch (12 January 2007)

Here's a thought Jackob..

Land costs averaged in the 06 report was $4784 per ha.
Land costs in the sept 3 months is $7000, a difference of 30%.

Doesn't it then stand to reason that the value of the existing land of GTP will rise at a higher rate this FY than what they use in their DCF calculations for encumbrance? (2%)?

(broadly speaking only - not taking into account regional considerations)


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## Jackob (12 January 2007)

pch said:
			
		

> I think your cost estimates look good.
> 
> I'm sure I read that GTP do not intend to plant much more than 35000ha per project and grow via their non forestry stuff. Thus should make it easy to test their land acquisition argument going forward.
> 
> ...



No doubt GTP will never want to plant more than 35000ha new trees per year, if these projects are only making long-term losses as analysed in my previous post.  But GTP couldn’t reduce the acreage either, as any reduce will affect its “revenue”/“profit” and make its book look awful.

TIM has limited its woodchip project size for many years now. The woodchip project is only about 10% of TIM’s total business now and fast approaching self-sufficient with land rotation.  At the same time TIM developed various other projects, but found all of them didn’t make much money, except its almond project, which now makes up ~50% of TIM’s total business.

GTP is now clearly trying to copy TIM’s model, but unfortunately it might be too late.  Its woodchip projects is about 10 times as big as TIM’s, and its non-woodchip projects, such as cattle-farm, are also obviously loosing money (as analysed in my early posts month ago).  This is a sorry story for GTP, for both shareholders and MIS investors.


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## Jackob (12 January 2007)

pch said:
			
		

> ...
> 
> Land costs averaged in the 06 report was $4784 per ha.
> Land costs in the sept 3 months is $7000, a difference of 30%.
> ...



I don’t think GTP’s land value would ever jump 30% in 3 months – something wrong here.

The rural land value should not grow much faster than inflation in long term– it is determined by average land productivity.

The land price rise is a negative for GTP, as it will force up GTP’s capital cost while GTP’s total income ($9000/ha) remains constant.


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## pch (12 January 2007)

Yeah I had drawn a similar conclusion re TIM, and I hold a lot more of them (they are the first stock i ever bought actually). I liked GTP's aquisition strategy, but not at 30% on what it cost in 06..

There comes a point when they would realise more shareholder value from selling off the land. If the big increase this year is broadly reflected across all their holdings..

But there is no sign of that presently, if they are still paying $7k per ha on $9K per ha project. 

BTW I think this has little all to do with the current share price woes as TIM has had a similar capitulation.. But this is all great info..


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## pch (12 January 2007)

Jackob said:
			
		

> I don’t think GTP’s land value would ever jump 30% in 3 months – something wrong here.




I never said 30%, but what I am I'm implying though, that if they are paying current market rates for land then surely their existing assets will in some way reflect that change as well.. (not 30% though)

I asked them about the difference in cost..

"Land costs really vary, depending on region etc.  During the 3 months to
30.9.06 the land we acquired averaged $7,000 per hectare as per the
report.   We find we are competing against a lot of other land users,
for good quality agricultural land and this makes for strong market prices"


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## Jackob (12 January 2007)

pch said:
			
		

> Yeah I had drawn a similar conclusion re TIM, and I hold a lot more of them (they are the first stock i ever bought actually). I liked GTP's aquisition strategy, but not at 30% on what it cost in 06..
> 
> There comes a point when they would realise more shareholder value from selling off the land. If the big increase this year is broadly reflected across all their holdings..
> 
> ...



I reckon GTP wouldn’t sell any lands before it had gone under.  

The first thing needed now is to stop buying the lands at $7k/ha.  But as I said earlier they wouldn’t – this gives you a glimpse to the depth of the problem.

Another thing about the land value – it’s said to be pushed up by large-scale acquisition of the MIS projects in recent years.  If they wanted to sell the lands one day, the price would be pushed down.

TIM is fundamentally in a much better shape than GTP.  So their price trends should be a bit different in coming months.


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## pch (12 January 2007)

Again another simplistic scenario.. As of 30/9/06

assume $7000 per ha

Cash: 246mil
Unencumbered Land: 58mil (i'm assuming that unencumbered is available for projects). I assume $6000 per ha here because some of this is last year.
= 9500 odd ha
rotation land = 500ha
Buy: 25000 ha at $7000

= 175mil

07/08 FY

cash remaining: 70odd mil

rotation land 5500 ha
buy: 29500ha = 206mil

= likely 07/08 borrowing of $136mil based on remaining cash (206-70) being available from 06/07 FY. (i told you it was simplistic ;-)

If the price was still 06 averages however it would be more like

06 buy 25000 ha = 112mil
07 buy 29500 ha = 132mil

which would have been paid out of the current cash/debt.. :-(


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## Bongo_Boy (12 January 2007)

Doesn't this company claim to have a spare 100,000 hectares of land on Tiwi islands for use in timber plantations ?  And about 150,000 hectares currently under plantation ready for use in the future ?

In theory, you would think they could use the Tiwi land for the next three years and not pay 1c extra for buying new land.  Then $132m profit would actually be $132 million profit.

I would presume that the land has to be ready for planting and that the company would not want all of one years product in the same geographic location, but it should be a pointer to their present state of affairs.

Because the companies plans only allow for modest use of 'free land' over the next few years you'd have to wonder if that is in fact the true present state of affairs or is there something that is not being disclosed ??


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## pch (12 January 2007)

Bongo, I thought exactly the same thing, but surely that is an unencumbered asset? Even if not, it has to be there somewhere in the financials?


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## Bongo_Boy (12 January 2007)

PCH, I'd like to have a sit down and a long coffee (or stronger) with one of the directors.


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## pch (12 January 2007)

.. or attend the Feb AGM and ask awkward questions


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## Jackob (12 January 2007)

pch said:
			
		

> Guys much appreciated for clarifying this.. next question that GTP themselves wouldn't answer..
> 
> They have published the amount of land available for rotation and in 2007 its 5000+ hectares. Below is the latest table I found..
> 
> ...




Hi Pch,

I believe your are right by saying that “a large amount of the old land will not be used again as the early projects were crap”, because the above GTP numbers your quoted for lands available for rotation are reduced from those GTP announced earlier in 2005.  (Please see page 11 of the file at http://gscentral.great-southern.com...=document&ID=28158&ObjectType=3&ObjectID=5169)

These numbers also includes lands in Tiwi islands already (also see p. 19-20 of the above file).  

Note the lands on Tiwi islands are sold for every 0.5 ha per woodlot (instead of 1/3 ha normally), so each ha is sold for $6000 instead of $9000 normally.  This is due to the low productivity of the lands (I guess).


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## Jackob (12 January 2007)

pch said:
			
		

> Again another simplistic scenario…
> …
> 06 buy 25000 ha = 112mil
> 07 buy 29500 ha = 132mil
> ...



Hi Pch,  

The models you and I used were both very simple and lenient to GTP.

The reality was that GTP in the FY2006 raised a total of $532M debt to generate only $450M revenue.  I estimate that at least $200M of the $532M debt was for the $300M woodchip project.

The simple facts were 
1) GTP increased its revenue by about 50% in each of the last 2 financial years (from FY04 to FY05 and from FY05 to FY06);
2) But its e/s was kept flattish around 40c/s for the last 3 FYs;
3) At the same time, its debt shot up from near zero to $612M, or $2/share.

I reckon in this FY07, GTP would intend to increase its revenue by at least 30% to $600M ($300M for woodchip and $300M for the rest) in order to maintain its e/s near 40c/s, at the same time it would need at least $600M new loan to fund the new projects.  The total debt would be $612M+$600M=$1200M+, or say $4/share.

The only problem now would be whether any bank on earth would lend GTP such a big amount of $600M while its debt/equity ratio approaching 200%…  The only alternative would be to issue $600M worth new shares, but the problem now would be if it would make the share price plunge to $1.50 …   I guess J Young is just worrying these problems now.


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## pch (13 January 2007)

Now I'm curious about the PDS for next FY.. I'd say its a certainty they will increase the management fees (10-11000?) and may even dabble with reducing commissions. They may also change the grower lease arrangements as well. (they generally don't recognize that until year 10). They also may elect to plant a lesser amount of forestry and significantly increase their alternatives. (Thankfully we have kept this discussion to just forestry thus far)

This next section will include some income including their alternatives but I think at this early stage in their development, it will be still mainly forestry.

Part of the latest debt involves no interest as they purchased an annuity thing to pay it. It can in effect be ignored till 2011. But thats not all their debt, and their interest expenses are already 80% of the 05/05 FY. 

They are also making some money from harvest sales and if the 3 months to Sep are anything to go by, it will a bit under double the 05/06 amount (26mil) to 48mil. (pity the interest expense above negates this     )

They also get a bit from rental fees but they state that they don't recognize this as income until the value of the harvest proceeds can be recognized properly. My guess is it will be a little over 05/06. (14mil) but this portion of income will obviously grow over the years in accordance with the size of the projects from 1996 and the quality of the product (which I do know that in recent years is much better).. 

Loan fees were 28mil and will not change much (the Sept quarterly implies this) I assume because the project sizes are not increasing.. 

So.. investor/growers may be pissed that their woodlot costs increase, but the deductions will still apply. I guess it depends on what their true motivation is for investing? (and how much they blindly listen to their commission gobbling financial planners 

The cynic in me says they could possibly whack 30% increases into the structure of the 07 project and provided the FP's get their commission they will still close oversubscribed


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## Bongo_Boy (14 January 2007)

PCH, i guess the fee increases are possible now that the company claims to have bolstered their distribution network and the forestry product is oversubscribed.

If they don't then inevitable inflation and real price increases in wood should make the underlying investment more attractive than past plantations.  

They'd want to establish some good year returns though, unlike at present i suspect.  

Have a feelng that the cattle could be the real revenue / profit driver over the next few years.  Of course that's if the government don't regulate the cattle MIS industry - which is always a possibility.


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## michael_selway (14 January 2007)

is GTP a good buy at current prices?

EPS(c) PE Growth 
Year Ending 30-09-07 38.4 7.3 -7.6% 
Year Ending 30-09-08 38.8 7.2 1.0% 

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 41.6 38.4 38.8 38.9 
DPS 15.0 15.0 15.0 15.0 

thx

MS


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## pch (14 January 2007)

tell me the rest of your DCF assumptions.. 

This whole thread for me has been about seeing if I agree with the analyst estimates and what the year or 3 after that may entail..


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## Jackob (15 January 2007)

pch said:
			
		

> Now I'm curious about the PDS for next FY.. I'd say its a certainty they will increase the management fees (10-11000?) and may even dabble with reducing commissions. They may also change the grower lease arrangements as well. (they generally don't recognize that until year 10). They also may elect to plant a lesser amount of forestry and significantly increase their alternatives. (Thankfully we have kept this discussion to just forestry thus far)
> ...



To stop GTP from falling I agree that GTP should

1)	Increase the woodchip project management fee from $9000/ha to $1100/ha - to save $2000/ha.    

This $9000/ha fee was OK when GTP started 10 + years ago, when lands was only $3,500/ha and labour was also much cheaper.  At that time GTP should have no problem at all to buy the land with the $9000/ha down payment.   But now land is $7000/ha and GTP has to buy it with bank loans bearing a 10% pa interest.   As the lands only appreciate about 4% p.a. in long-term, thus there will be a 6% p.a. long-term hidden loss.  (The loss will be 60% or $4200/ha in total in 10-year project life time).  So there is no way for GTP to survive without changes.

2) Cut its “commissions and marketing” expenses by ~1/3 from 16.5% of the revenue to 11% (from ~$1500/ha to $1000/ha - save $500/ha).    

The above 2 measures have to be implemented with full coordination of all other (woodchip) MIS companies, otherwise will fail.    

3) A 3rd possible measure is to defer more income to future years, thus to lower the profit margin (before tax) from 38.5% (of the $9000/ha) to around 15% (of the $1100/ha) and reduce the corporate tax by about half.  This would save ~$600/ha, but it would also mean to cut e/s by half to ~20c/s (unfortunately).     

I reckon the above 3 measures would be have a total improvement of $3000+/ha in cash flow and reduce the long-term hidden loss from $4200/ha to ~$1000/ha.  Well, maybe the loss can be totally stopped if we take the dividend payment out of the equation!  The risks are: revenue loss and share price fall (still better than being belly up).


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## pch (15 January 2007)

I'm hoping to get an answer on the issue of how much increased purchase costs impact on future asset values. They only value 1/3 of their property each FY, so it may take a while to asses, but 4% pa (on a 10 year timeframe) would be on the low side.

Where did you get the 10% pa from? I don't have their reports here but I'm sure I saw the figures at between 6.5 and 7% somewhere?


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## Jackob (15 January 2007)

Hi Pch,   

The standard interest rate of home mortgages at present is 8% p.a., so the commercial loans should be 2% above it, to be 10% p.a.

The long-term appreciation of the rural lands, as I estimated previously, should be 1% above inflation.  If the present inflation is 3% p.a., then the land value increases 4% p.a..


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## Portfolio (15 January 2007)

1. I like your analysis Jackob but it is unlikely they will increase the price of the woodlots or decrease comms as the project is already marginal for woodlot investors and there are a plethora of competitors in this space. Ie. The price is very elastic.  (I would estimate that if they increased the price to $11,000/H their sales would more than halve). Probably same for halving commissions but maybe less.

2. They can however still decrease their “sales and marketing %” as spending did get out of control in 2006. They can decrease but not to 11% (use 15% as a guide).

3. They could defer income I guess but this would just be a timing difference and would have a big effect on the share price so they wouldn’t do it.


----------



## pch (15 January 2007)

Jackob said:
			
		

> Hi Pch,
> 
> The standard interest rate of home mortgages at present is 8% p.a., so the commercial loans should be 2% above it, to be 10% p.a.




Hey Jackob..

Here's the sept 06 notes..

Two main debt sources. The ANZ facility was $211mil, of which 75mil was used to purchase an annuity that paid the interest. In 2012 they repay $257mil. This coincides with their biggest land rotation.. (33991 ha - now that *is* nice). If we assume $11000 per ha by then they would sell 374mil of project with little capital expenditure. 

The other debt is $245mil drawn to $200mil now and due in 2009, at an after tax cost of 5.8% pa they say here..

I wonder if they will do a similar thing in 07/08 as per this annuity setup for 2013? That year they estimate 27785ha.


----------



## pch (15 January 2007)

aha I forgot about your comment about the Tiwi islands selling for $6k per ha - that makes it the capital saving less than my previous post.. (i think would clear the debt ok but not leave much else)


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## Jackob (16 January 2007)

pch said:
			
		

> Hey Jackob..
> 
> Here's the sept 06 notes..
> 
> ...




1) “The ANZ facility was $211mil, of which 75mil was used to purchase an annuity that paid the interest. In 2012 they repay $257mil.”  

So what they really got last year was $211M-$75M=$136M and what they will repay in 6 year period will be $257M.  Thus the real effective interest rate is

 (257/136)^(1/6)-1 = 11.2% p.a. 

which is even greater than 10% I used.  In the original GTP announcement (17/8/2006), the final repayment for this loan was hinted to be only $215M on $140M principle, so many were mislead to believe the effective interest rate was only (215/140)^(1/6)-1 =7.4%, even better than home loan!

2) If the effective interest rate of other debt from CBA were truely 5.8% pa (after-tax), or say 5.8% /0.7 = 8.3% pa (before-tax), why wouldn’t GTP refinance its ANZ loan with CBA and save 3.9% pa?  And how would CBA be vible by charging GTP’s unsecured commercial loan with an interest only 0.3% higher than home mortgage (8% pa)?  

3) The number you quoted for the latest amount of land available for rotation published by GTP were

2007 5708 ha
2008 9455 ha
2009 8519 ha
2010 12323 ha

which were significantly low than those GTP announced 2 years ago (page 11 of the file at http://gscentral.great-southern.com...=document&ID=28158&ObjectType=3&ObjectID=5169).  Judging by both your numbers (which didn’t have the 2011 figure) and the GTP’s 2 years ago (which had the 2011 figure), the land available for rotation in 2011 would not more than 15,000 ha.  Don’t know where your number “33991 ha” was from.

4) Any way, like last year, GTP would have to get at least ~$300M cash within the next 3 month to buy properties and have “working capital” for preparing the non-pulpwood projects before the sale season ending June 2007.  (I reckon the size of these projects has to double from ~$150M to ~$300M to meet the increasing expenses and to keep "e/s" stable).   Where would the money be from?


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## pch (16 January 2007)

gday Jackob

The land rotation figures I am using was from the Sept roadshow

http://www.great-southern.com.au/default.aspx?MenuID=400

and you will see the 33000 figure there for 2012. What it says (and it has always bothered me) is 'assume Tiwi stage 2'.

re the effective real interest rate, your right it is very high, but its obviously geared to not penalise EPS over the next few years.. They are counting on the free capital from not having to borrow in that year paying this down.

But this year is the peak, with only 2013 coming close to it


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## Jackob (16 January 2007)

Hi Pch. 

I have got your GTP Sept road show file. Thanks.  Don’t know what “Tiwi stage 2” means. Also don’t know why the numbers are very different from in the other announcement 2 years ago when GTP just got the Tiwi lands. (http://gscentral.great-southern.com...=document&ID=28158&ObjectType=3&ObjectID=5169 )

Comparing the numbers in pages 26 and 27 of the Sept file, the CAPEX savings can be calculated as around $9000/ha. This is wrong, because what can be saved is only the expenses on land purchasing, which should be ~$7000/ha. For Tiwi lands, of which each ha has only 2 woodlots instead of 3 normally, the CAPEX saving is only about ~$4667/ha. Note that although the revenue from the Tiwi land is reduced by 1/3 per ha, the tree management and office expenditure overhead per ha is not likely reduced. Thus it wouldn’t generate much cash flow, if any.

Even if we assume that all 33991 ha land would be available for rotation in 2012 as GTP said, and each ha can save CAPEX $7000, then the total CAPEX saved would be $7000*33991=$238M, which would still not be enough to repay the ANZ debt of $257M.  At the same time, if GTP’s debt continues to explode at the current rate, GTP would not survive to 2012 any way.


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## pch (16 January 2007)

Jackob are you in Perth? I'll be at the AGM for sure..


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## Jackob (17 January 2007)

pch said:
			
		

> Jackob are you in Perth? I'll be at the AGM for sure..



Pch,
Sorry, I won't be in perth.


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## pch (17 January 2007)

I did a basic spreadheet last night on forward projections and basically agree with your 300mil required assessment (around 2008 fy). (the sheet is nowhere near accurate enough though and is therefore nice to GTP).

But if we excluded the 200mil due in 2009 and kept existing profit margins, it seemed that they wouldn't need much more than this though. The rotation does start to make an impact from 09 onwards

So one feels that this 300mil may end up being split into dilution (yet again) and another arrangement somewhat like the current annuity thing around 2014..

Now in 2009 200mil falls due, and if they can refinance that again till 2013 and onwards, then its a question of getting the 300mil cash required.

I think keeping their other products out of the picture is a good thing at this point, but we will need to look at them to see how much they will somewhat subsidise the trees..


----------



## Jackob (17 January 2007)

In the 9 months from Jan to Sept last year, GTP borrowed $412M from the banks to fund its $450M 2006 project preparations.  This year its project scale would have to increase to at least ~$600M ($300M for the woodchip, the other $300M for non-woodchip), and need desperately at least $550M for the preparations in the same period between Jan-Sept.  

Where could that money come from?


----------



## pch (18 January 2007)

They still have 245m odd cash available if I recall so the borrowed money is also for 07 too.. (and they are hitting it hard at $7000 per ha)


----------



## Jackob (19 January 2007)

If they were really having $245M cash in hand, why wouldn’t they use it to reduce the $612M debt to 356M to save interest of 10+% p.a.?


----------



## pch (21 January 2007)

Hi Jackob.. 

Years ago a Queensland company tried to con me into buying overpriced property. They showed me a valuation form that indicated prices were true market value. 

To that extent, the marketers buy up a large area and develop it, and the valuer looks at past sales evidence of the area and the similarity of the dwelling to those sold. After a while it kind of became self perpetuating, where the valuations were based on sales evidence of the previous suckers who actually did buy in. the true price a local would have paid would have been $30-40k less

So, as I cast my eye over the GTP financials (again   ) I note that in 05 they recognized 15mil of revenue from increase in value of their land assets. In 06, they say "the estimate of real price growth has increased from 1% at 30 June 05 to 2% at 30 Jun 06. 

In 06, before encumbrance, they recognized 25mil (30% more than 05). After encumbrance, the revenue turned into a 3 mil expense though, since they have to then discount the fair value because they don't get their lease fees till year 10. 

But, this self perpetuating thing starts to take hold. MIS schemes may well be the main competition that drives up the demand for this land. As a result, they get to recognize that value as income cos a valuer will go and look at previous sales evidence in that area and across the sector.

Now prior to the encumbrance rule, think of the EPS gain this would have, especially from now onwards.. Capital raising via equity would become more attractive again because its dilution is offset via the asset values. PE would look awesome.. (One can see how a bubble can quite easily form and maybe it has already?)

The encumbrance therefore is probably annoying the crap out of management since shareholders want to realise value now, rather than in a few years. 

So I speculate that they may look to change the deferral arrangement where the rental for the land is paid in year 10. This would result in an immediate EPS improvement. Timbercorp used to have you pay in installments over 4 years so its not unusual.

Even without this, I would expect to see a bigger recognition of revenue this FY from asset value increases, just based around the fact they are paying now paying more than they perhaps should..

If there is indeed a bubble in the valuation of the land, then it could be ugly in a few years, with income writeoffs as well as the huge debt to pay off.. 

this is going to be an interesting PDS..


----------



## Jackob (23 January 2007)

Hi Pch,

Yes, writing up the value of old lands may help increase profit, but they also have to write down the value of new lands (due to encumbrance) to reduce profit.  The reason of why TIM had more writing-ups than writing-downs was that TIM’s lands (mainly woodchip lands) are fast approach self-sufficient by rotation with newly planted lands not much more than 10% (GTP: ~30%).  

One thing always amazes me is that GTP always intends to make its profit larger than it should be, and thus pays more tax to the ATO.  TIM has a different approach by only getting 2/3 of the total fee from the woodchip growers in the 1st year and having the rest 1/3 in the second year or later.  Thus 1/3 of TIM’s revenue (woodchip) is automatically deferred without the fuss GTP is having.

If GTP would defer more revenue from growers’ $9000/ha management fee as land rental charge in the 10 years project life, then this would apparently reduce GTP’s “profit” and “e/s”, and make its share price plunge (but save tax).


----------



## pch (23 January 2007)

Since we know they are going to use their remaining cash to buy land then we conclude they will need another $300mil by 08 (give or take a bit depending on recognisiton of asset values and future fee rises..) 

I suppose its now time to analyse the cows and olives ;-)  I must confess I've not examined them in great detail (ie how many cows can you cram into their properties), but the growth rates going on last 2 years suggest they will comprise some 40%+ of their projects this year..


----------



## Jackob (23 January 2007)

Hi Pch,

The GTP 2006 September Annual Report said (issued 22/12/2006, note 25, page 57),

“On 15 September 2006 the Group (GTP) restructured its existing bank facilities into a three year unsecured facility repayable in 2009. The Group had unsecured corporate lending facilities with various banks of $245,000,000 drawn to $200,000,000 at 30 September 2006.”

My questions are:

1) If GTP really had that wonderful sum of cash of $250M in hand, why would it still have to have the above loan facility of $245m drawn to $200m at 30/9/2006 at all?

2) If GTP really had that wonderful sum of cash of $250M in hand, why not used it to repay that $200m bank loan, and save tens of millions of $$$ a year?


----------



## pch (23 January 2007)

..because they believe they will get better shareholder value buying land for $7k per ha with it..

I hope to find out how they arrive at this view at the AGM..


----------



## Jackob (23 January 2007)

If the $250M “cash” GTP said to be having couldn’t reduce GTP’s mountainous $600+M debt by $1, then how could it be used to buy one ha land on earth?  

If the $250M “cash” GTP said to be having couldn’t reduce GTP’s $600+M debt by $1, then most likely it’s not there at all, or only forged to fool the public?


----------



## Jackob (23 January 2007)

I just checked TIM's last annual report and found that TIM also had $100+M "cash and cash equivalent" sitting in its cash account.  Also don't know why these "cash" couldn't be used to repay its debt.  But obviously just as GTP's, they simply couldn't.

Anyway, if all these "cash" can't repay debt, then they can't buy land either.

Then in GTP's case, it has to raise more money (be it equity or debt) soon as usual.


----------



## pch (23 January 2007)

The cash is simply the undrawn debt. This is essentially why I think that GTP's next big capital/debt raising is in 2008 as they are using that cash to buy up land as we speak..

Check out TIM's operating cashflow.. it was negative for the year before investing and then financing costs. Then they received 386mil from borrowings leaving them with the $148mil you mention. 

They will use 85% of that in 07 if 06 is anything to go by (assuming operating cashflow breaks even) and then in 08 they will be rattling the tin also..


----------



## Jackob (24 January 2007)

Hi Pch,

If you look at the GTP 2006 (July-Sept) annual report, the $247m cash seemed to be real cash in the bank and they were even earning a ~5% pa interest (note 7 of the 2006 Sept Annual Report).

It is indeed mysterious why GTP didn’t use the cash to earn a 10+% pa interest by repaying the debt!

My view is still that if these $247m “cash on hand” couldn’t repay any GTP debt, then most likely they couldn’t buy any $7k/ha land for GTP either.  GTP definitely needs at least $150m to buy land before April for last year’s $300m woodchip project.

GTP also needs cash to cover its operating net cash outflow (like TIM?).  In the 3 months of July-Sept 2006, the GTP operating net cash flow was running at -$89m!  This negative operating cash flow must be a new phenomenon, as in the previous GTP half-year reports the operating cash flow was always positive during Jul-Dec each year.

So where can all the cash from?  I won’t believe GTP can maintain its cash flow until 2008.  Well, it needs the cash soon!


----------



## pch (24 January 2007)

*pch digs out reports again* (its looking worn 

05/06 started with 118mil "cash"
add 244mil on operating income for the year
subtract 361mil for buying lots of things (half of that land)
add to that Trees money 124mil
add to that 204mil from "receipts from borrowing" 

so after costs of issuing/obtaining that debt, net cashflow from financing is 284mil for 05/06.

Thus net increase in cash held of 168mil
add to the 118 at the start of the year and we have 286mil which is on the balance sheet.

then we have the Sept quarter. "given the nature of the groups seasonal operations, in which a majority of revenue is not recognized until the latter half of the financial year, but with a large amount of agricultural activity and expenditure incurred in the 3 months period to 30 September, the reported after tax loss 38mil is not reflective of the group results for the full financial year"

So..

05/06 started with 284mil "cash"
add 105mil from customer payments in that quarter
subtract 164mil for payments to suppliers and employees
subtract 32 mil income tax and some other finance/interest costs
means they chewed through 90mil in operations for that 3 months

subtract 82mil for buying lots of things (25% of that land)

add 215mil (this is that weird capitalized interest thing) "purchase of derivative financial instrument"
subtract 75mil for that annuity thing that pays the interest on one of the loans till 2012
add to that 200mil of additional borrowings
subtract from that 203 mil of repayment of last years borrowing

net result is 40mil of cash decreased from July 06, but still with $246mil cash on the balance sheet.

Now when you also check that balance sheet there is unencumbered land (note 16) representing land they have already paid for and land available via rotation. I expect this to be (at best) 10,000 ha. 

This leaves them having to buy another 25000ha. At $7000pa this is $175mil. If my reserve estimates are wrong, we can make this $200mil if you like..

So I expect to see in the next annual at least another 200mil payment for investment property by 08 under "investing activities" . They will spend heaps on biological assets and plant and equipment too, but remember that last year they had 300mil of operation revenue last year and thus far we have not seen much of that (compare operation revenue between 2005 and 2006. If their operating revenue is the same or similar to last as last year then they will have 200odd mil operational revenue. 

Net result is that at the end of this new FY their "cash" position will be a lot worse than the start of this year, but I feel they shouldn't need to borrow/raise equity until 2008, where we start all over again buying land and assets. I think they will need some $300mil here..


----------



## Jackob (24 January 2007)

Hi Pch,

So, if the $247m "cash" (at 30/9/2006 in GTP’s account) could only stay in the bank as "deposit" but can't repay any of GTP's mountainous debt, then how would these "cash" be possibly able to buy the $7k/ha land GTP needs desperately by the end of March?   Where would those $150m cash be from?


----------



## pch (25 January 2007)

I'll come back to the cash/debt thing later, but today was a big slide for both TIM and GTP - maybe TIM gets pained with the same brush?

http://www.abc.net.au/news/newsitems/200701/s1833117.htm


----------



## Portfolio (29 January 2007)

Hi Jackob,

Going back to the profit analysis (below) the question is raised: Does this company even make any money????? The profit and loss shows that it does (see below) but all the subsequent posts have been trying to decipher why there is no cash.  I believe the answer is that yes there is a book profit ($2045 as shown below).  But to earn this profit the company has to:

1. Buy land; and
2. Have it encumbered for 11 years by the grower.

Both of these have no effect on the profit and loss statement BUT THEY BOTH EFFECT CASHFLOW.  We know they buy the land for $7k.  But the big factor people forget is point 2.  If they immediately sold that same parcel of land (with the 11 year encumberance) it would be worth around $2k (being generous) therefore there is a REAL EXPENSE THAT IS NOT BOOKED TO THE PROFIT AND LOSS OF $5k per hectare. 

So the question again: Does this company actually make any money? 




			
				Jackob said:
			
		

> Hi Portfolio,
> 
> Well done!    Glad to see your work after I am just back from holiday.  To make your tables more realistic, however, I would like to modify them by adding in a few more items as follows.
> 
> ...


----------



## Jackob (31 January 2007)

Hi Portfolio,

My answer to your question is: No, this company isn’t making any money.  As shown in my calculations you have quoted, this company is actually losing money.

A loophole in GTP’s accounting book is that they don’t retain any provision from the $9000/ha management fee for maintaining the plantation in the next 10 years of the project lifetime.  

These maintenance expenditures should include (1) tree husbandry, (2) office expense overhead, (3) servicing the debt (or more accurately, servicing the deficit between the debt interest and land revaluation).

The total of these hidden expenditures in the future 10 years is much, much bigger than the “cash flow” of $1045/ha or “profit” of $2045/ha as shown in the table you quoted.


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## pch (7 February 2007)

Ouch that bites!

Australian stocks: 

"Agribusiness Stocks: Great Southern Plantations Ltd., which manages vineyards and forestry plantations, slumped 51 cents, or 20 percent, to A$2.02. Timbercorp Ltd., an agribusiness investment manager, plunged 84 cents, or 31 percent, to A$1.87. 

The Australian Taxation Office is preparing a ruling that investors in non-forestry agribusiness managed investment schemes will no longer be able to claim upfront taxation deductions for their contributions with effect from June 30, Timbercorp said in a statement, citing a government minister. "

"Great Southern said 70 percent of its sales last year came from forestry, and weren't affected by the ruling. "

yeah right, will be a great AGM today, imagine all their pretty powerpoint slides will be madly being edited as we speak..

Still, GTP are much less affected by this than TIM


----------



## TheAbyss (7 February 2007)

Does anyone think a bounce back is on the cards tomorrow or havent we seen the low yet? I understand the news was potentially bad however has there been the usual over reaction?


----------



## CanOz (7 February 2007)

TheAbyss said:
			
		

> Does anyone think a bounce back is on the cards tomorrow or havent we seen the low yet? I understand the news was potentially bad however has there been the usual over reaction?




Its capitulation like BEI. But someone sees value as they are all closing well off the lows. The large GAP is a bit intimidating though.

Cheers,


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## PorscheACE (7 February 2007)

Does anyone have access to Last 10 Trades data for GTP closing market on 7/2/06?

I have just looked at this and it seems someone has purchased a MASSIVE amount of shares at crazy prices...does this look ok or has someone just said "SHOOT ME" ???

07-02-2007 04:10 PM $21.900 200 $4,380.000   
07-02-2007 04:10 PM $21.900 15168 $332,179.200   
07-02-2007 04:10 PM $21.900 5666 $124,085.400   
07-02-2007 04:10 PM $21.900 4334 $94,914.600   
07-02-2007 04:10 PM $21.900 2864 $62,721.600   
07-02-2007 04:10 PM $21.900 5000 $109,500.000   
07-02-2007 04:10 PM $21.900 5000 $109,500.000   
07-02-2007 04:10 PM $21.900 7802 $170,863.800   
07-02-2007 04:10 PM $21.900 30000 $657,000.000   
07-02-2007 04:10 PM $21.900 655 $14,344.500 

Comments people?


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## CanOz (7 February 2007)

PorscheACE said:
			
		

> Does anyone have access to Last 10 Trades data for GTP closing market on 7/2/06?
> 
> I have just looked at this and it seems someone has purchased a MASSIVE amount of shares at crazy prices...does this look ok or has someone just said "SHOOT ME" ???
> 
> ...




This is what i got:

4:10:53 PM 2.190 200 
4:10:53 PM 2.190 15168 
4:10:53 PM 2.190 5666 
4:10:53 PM 2.190 4334 
4:10:53 PM 2.190 2864 
4:10:53 PM 2.190 5000 
4:10:53 PM 2.190 5000 
4:10:53 PM 2.190 7802 
4:10:53 PM 2.190 30000 
4:10:53 PM 2.190 655


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## Jackob (7 February 2007)

TheAbyss said:
			
		

> Does anyone think a bounce back is on the cards tomorrow or havent we seen the low yet? I understand the news was potentially bad however has there been the usual over reaction?




I reckon a resistance line is just waiting overhead at  around $2.24.

More downside risk.


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## pch (8 February 2007)

AT least now Jackob we can stick to analysing the forestry aspect of GTP


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## Jackob (8 February 2007)

At present, no one seems interested in any “analysis” any more.  

We must wait until it cools down to do any meaningful things.


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## Duckman#72 (8 February 2007)

pch said:
			
		

> Ouch that bites!
> 
> Australian stocks:
> 
> ...




It will be interesting to see where Great Southern goes from here. As per Great Southern announcement this morning - last year 70% of sales came from forestry related lines. In 2006 only 24% of Timbercorps new MIS sales were forestry related. (I'm not sure about GTP's new sale %).

I'm not sure that I would want to be in an avocado grove with Great Southern now that this announcement has come out. Are GTP going to keep their eye on the ball? I think non-forestry projects will just get the boot. The Gov's backpeddling on Carbon Credits is an interesting one.

I went to a FEA information session last week and they were very hopeful getting in on the action if either Labor was to win power or Coalition wants to be seen as "Climate Friendly". It could be something that is a win-win (tell resource sector to suck it in and transfer some cash across to Agribusiness). Resource sector continues along merrily and agribusiness gets some money in it's pocket after being hit on the head concerning non forestry products)


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## pch (8 February 2007)

"Managers wanting to issue non forestry investments post 1 July 2007 will
need to look for other structures such as unit trusts. "

Thats from the "Australian Agribusiness Group". 

I think the tone of GTP announcements will be how wonderful forestry was the whole time .. For what its worth I'm out of TIM now for the first time since 2001, as I really feel they are in a deep hole. I'm not convinced that a unit trust model is going to work for them.. 

GTP were already trading at a bigger discount and the fact they were still heavy forestry has influenced the relatively smaller drop than TIM had.. I look forward to re-examining them with people like Jackob in the coming weeks to see if they are worth sticking with..


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## Portfolio (9 February 2007)

I cant believe how little this stock has fallen on the news. Yes GTP is big in timber BUT its whole strategy was moving away from timber as it will be forced to publish returns in the next few years (without propping them up).

Target for this stock is $1.30......Thats the NTA.


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## michael_selway (11 February 2007)

Portfolio said:
			
		

> I cant believe how little this stock has fallen on the news. Yes GTP is big in timber BUT its whole strategy was moving away from timber as it will be forced to publish returns in the next few years (without propping them up).
> 
> Target for this stock is $1.30......Thats the NTA.




Hm could be

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 41.6 39.1 40.5 39.4 
DPS 15.0 15.0 15.5 15.5 * 

thx

MS


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## pch (11 February 2007)

I think the fall was on the premise of the % of their product range directly affected. Hence why a lot of investors dumped TIM more.. (Wilmott Forests went up on the bad day for TIM and GTP)

The 'propping' up test will be answered this year I think. Last year they made particular mention to this under provisions in the books and claimed that it will not happen again.

Boards have lied to me before though.. so I leave it to you to judge the validity of their assertions.



			
				Portfolio said:
			
		

> I cant believe how little this stock has fallen on the news. Yes GTP is big in timber BUT its whole strategy was moving away from timber as it will be forced to publish returns in the next few years (without propping them up).
> 
> Target for this stock is $1.30......Thats the NTA.


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## Jackob (12 February 2007)

pch said:
			
		

> ... The 'propping' up test will be answered this year I think. Last year they made particular mention to this under provisions in the books and claimed that it will not happen again.
> 
> Boards have lied to me before though.. so I leave it to you to judge the validity of their assertions.





			
				Portfolio said:
			
		

> I cant believe how little this stock has fallen on the news. Yes GTP is big in timber BUT its whole strategy was moving away from timber as it will be forced to publish returns in the next few years (without propping them up).  ...



Hi Portfolio and Pch,

Interesting to know that GTP “will be forced to publish returns in the next few years (without propping them up)” and  "The 'propping' up test will be answered this year...".

Would you please explain a bit more about the "propping" and "propping up test"?  Why and who will force GTP to do such test?  When did GTP know that it would have to do such test?  

Thank you.


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## TheRage (12 February 2007)

Portfolio said:
			
		

> I cant believe how little this stock has fallen on the news. Yes GTP is big in timber BUT its whole strategy was moving away from timber as it will be forced to publish returns in the next few years (without propping them up).
> 
> Target for this stock is $1.30......Thats the NTA.




Can you please explain how you arrived at this amount? NTA according to my data is 682 million on 310 million shares outstanding giving a NTA of $2.2 per share. Do you have more up to date information than me?


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## Jackob (12 February 2007)

TheRage said:
			
		

> Can you please explain how you arrived at this amount? NTA according to my data is 682 million on 310 million shares outstanding giving a NTA of $2.2 per share. Do you have more up to date information than me?




I reckon $2.20 per share is the "net asset", not NTA ("net tangible asset").


----------



## pch (12 February 2007)

Hi Jackob

I don't have the annual here, but buried in the July one (i think) under provisions was some millions of dollars that was used as a payout to 1996 investors as the returns were crap. 

There is a specific note about it. I posted on the presumtion that is what Portfolio was talking about. 

They say something to the effect that at that early time in their development they outsourced the actual forestry management to a 3rd party and the results were not satisfactory. They say in the note they do no expect this to be an issue from post 96 projects..

regards


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## TheRage (12 February 2007)

Jackob said:
			
		

> I reckon $2.20 per share is the "net asset", not NTA ("net tangible asset").




Balance Sheet as follows:
                                2006       2005      2004
Cash                          286.83   118.29   35.55   
Total Current Assets     609.96   394.70   198.06   
PP&E 147.30                388.75   279.53   
Intangibles Ex. Goodwill  13.33   2.11   -   
Goodwill                       60.85   36.89   -   
Non Current Investments 511.95   16.72   4.20   
Total Assets             1,607.87   1,180.78   646.56   
Short Term Debt         173.12   58.42   16.53   
Total Current Liabilities 582.30   334.16   194.70   
Long Term Debt      234.58   73.25   -   
Total Debt             407.69   131.68   16.53   
Total Liabilities        851.63   418.93   197.65   
Net Assets             756.24   761.84   448.92   
Net Tangible Assets 682.06   722.84   448.92 

Net Assets "756 million", 
Net tangible Assets "682 million" 

Net Tangible assets is calculated as Net Assets minus intangibles  which in the case above is 756.24 - 13.33 - 60.85 = 682.06

Net Tangible Assets per share = 682.06/310 million shares = $2.20

Current share price 2.38 is only trading slightly above NTA.


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## Jackob (12 February 2007)

Hi TheRage,

You might quote numbers from GTP Annual Report for the FY ending 31/6/2006.  

If we look at the latest GTP “Annual Report” (issued on 22/12/2006, for 3 months from 7/2006 – 9/2006), 

Net asset = $682.8M
Goodwill and other intangible assets = $73.5M
NTA = $682.8m - $73.5 = $609.3M

Thus, the NTA per share =  $609.3/315s = $1.93/s  
(Note the total number of issued shares is 315,192,398 at present)

It is remarkable that GTP’s NTA has reduced by $0.27 per share in the above 3 months.


----------



## Out Too Soon (12 February 2007)

Wish I'd been on the ball & bought some under $2 a few days ago.


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## Portfolio (12 February 2007)

Going off the latest Macquarie research (I dont have copy of the annual report in front of me):

1. Land $647.8 million ($1.56 per share)
2. Cash -$114.0 million (-0.27 per share)

Therefore the company is worth $1.27 per share.

Note: I have not attributed any value to the "distribution business" as Great Southern will not be selling anything in 2 years. This announcement has effectively killed off any non-forestry projects and forestry projects will be killed off by the "propping up" issue.


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## Duckman#72 (12 February 2007)

Portfolio said:
			
		

> Going off the latest Macquarie research (I dont have copy of the annual report in front of me):
> 
> 1. Land $647.8 million ($1.56 per share)
> 2. Cash -$114.0 million (-0.27 per share)
> ...




I agree with the other guys Portfolio. Westpac research (which uses Huntleys) has the same shares outstanding as Rage is using.

Duckman


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## Jackob (12 February 2007)

Duckman#72 said:
			
		

> I agree with the other guys Portfolio. Westpac research (which uses Huntleys) has the same shares outstanding as Rage is using.



The total number of shares outstanding was 310m before 12/12/2006.  On 12/12/2006 GTP issued 5m new shares due to DRP and the total number became 315m.

As I mentioned, during the 3 months of 7-9/2006 GTP lost $0.27/s in NTA.  If extrapolating that rate over another 6 month to 3/2007, then it would lose a further $0.54/s and its NTA would be $1.93/s - $0.54/s = $1.39/s, which is not far from Macquarie’s $1.27/s.   

I understand GTP’s “assets” will have a sudden increase just before 30/6 every year due to the flood of investors’ funds, but they are not really GTP’s assets, they are investors’.  GTP temporarily takes these investors funds as its own “assets”, but these “assets” will quickly disappear during the year.  So all depends on by which month you calculate GTP’s “assets”, which can vary from $1.20 to $2.20 or so.   To me, I believe Macquarie’s $1.20 can be closer to GTP’s true value.

Any way, the assets in GTP’s book are most likely overstated by valuing the lands at $7000/ha. Many would argue the land price have been pushed up by GTP’s own huge scale buying.  If GTP has to sell them one day, the price would certainly drop.


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## pch (13 February 2007)

Jackob said:
			
		

> Any way, the assets in GTP’s book are most likely overstated by valuing the lands at $7000/ha. Many would argue the land price have been pushed up by GTP’s own huge scale buying.  If GTP has to sell them one day, the price would certainly drop.




I think this is right (the price drop bit) but I did the math on this in previous discussions and right now they are valued less than $7k. It takes them 3 years to get their land bank revalued so there will always be a lag (but i wonder if they are tempted to fast track this in FY08/09 when the horticultural stuff theoretically becomes harder to sell..

Actually I dunno if I mentioned, but I remember reading TIM's annual and noting that their valuation methodology was more aggressive than GTP's..


----------



## Jackob (13 February 2007)

I just quote a few lines on land price from the article at the following website.

http://www.theage.com.au/news/business/howard-seeks-an-mis-compromise/2007/02/12/1171128899492.html



> … Liberal MP Wilson Tuckey warning that land prices will plummet if the schemes, supporting a range of agricultural investments including nuts, olives and wine, are scrapped. “I am deeply concerned that if this were to proceed, there would be a big reduction in land prices in rural areas," he said.
> 
> …
> 
> ...


----------



## mark_au (14 February 2007)

Hi People

I have some GTP and have been reading this thread with interest.
Without going into detailed financials which others have done (thanks for all the hard work). Im  basicially trying to determine if the business is fundamentially sound or not. 

My Reasoning for getting into GTP was that, as we all know, logging old growth forests is not sustainable or desireable. So eventually only plantation timber will be useable. Given that there is only so much viable land, isnt it basically a matter of supply and demand, ie those with the most land/forests with enough capacity to supply the market with timber on demand wins ????

If plantations become the only place where timber is obtainable from, then wont they basically "own" the timber market, and they can dictate what the market will have to pay ???

Regards

Mark


----------



## Jackob (14 February 2007)

mark_au said:
			
		

> I have some GTP and have been reading this thread with interest.
> Without going into detailed financials which others have done (thanks for all the hard work). Im  basicially trying to determine if the business is fundamentially sound or not.




Hi Mark,

I am a bit reluctant to tell you, a GTP shareholder, that according to the previous discussions between Portfolio and I on GTP’s accounts, GTP’s main business – pulpwood (not timber) MIS – is in a state of chronic hidden loss.  Please just check the thread for details.

Regards


----------



## mark_au (15 February 2007)

Jackob said:
			
		

> Hi Mark,
> 
> I am a bit reluctant to tell you, a GTP shareholder, that according to the previous discussions between Portfolio and I on GTP’s accounts, GTP’s main business – pulpwood (not timber) MIS – is in a state of chronic hidden loss.  Please just check the thread for details.
> 
> Regards




Yep i read a few pages of the whole thread. i'll try to read some more today

What im trying to figure out at a more macro level, now that the "taxation" advantages have been hosed down, are plantations a viable business, i mean where is the timber going to some from in the future, if a sustainable business model cannot be found. 

The way i see it is that 
1) GTP are aware of the shortcomings of their business and are actively
trying to mitigate the deficiencies to make a viable business for the long term

or 
2) they are aware of the shortcomings and are actively trying to cover it up and milk the shareholders for as long as they can untill the whistle is blown ;-)

Im hoping the answer is number 1 

thoughts ???

regards

Mark W


----------



## Portfolio (15 February 2007)

In terms of having a monopoly in woodchip and therefore being a price maker rather than a price taker....not likely. The amount of chip coming out of South America (Esp Chile) is enought to feed the Japanese mills without us.  

In addition there is less and less chip required each year due to recycling of paper which is growing at an exponential rate.  I dont think the world will ever get to the stage where no new chip is needed but i do believe that South America has the plantations to more than fill this gap for the whole world (American and Japanese paper mills).


----------



## pch (15 February 2007)

At a macro level, Portfolio makes a very important point regarding the demand for the product. Last year the company in effect subsidised the returns for the 1996 investors.

You then have to weigh up other factors and try to answer some questions..

Since GTP buy their land and that cost is much more that the returns they get from a single rotation of that land for a plantation. But a rotation is a long time, so they have to take on a lot of debt to do so in the meantime. A useful excercise would be to work out current lease rates and see if the numbers stack up in a leasing model. If they still have to borrow to fund operations then your completely reliant on the future returns.. added risk - we see now they are propping up older projects..

But offset from that, if GTP is *better* at land and tree management now. They selectively choose the best growing trees from year to year and are much better at picking the optimal land, etc.


----------



## Jackob (15 February 2007)

mark_au said:
			
		

> … now that the "taxation" advantages have been hosed down, are plantations a viable business, i mean where is the timber going to … in the future, if a sustainable business model cannot be found.



If there is no "taxation" advantages to the so-called “customers” (investors) of the MIS industry, then the MIS industry can’t sell their so-called “products” (prospectuses) any more and the whole industry will shut down.

GNS (Gunns) used to run a timber (mainly woodchiping) industry without MIS in TAS successfully.  But the land price there at that time was only a fraction of the present $7000/ha.  At $7000/ha, it's hard to run the business any more.



			
				mark_au said:
			
		

> The way i see it is that
> 1) GTP are aware of the shortcomings of their business and are actively
> trying to mitigate the deficiencies to make a viable business for the long term
> 
> ...



I think GTP is having a bit of both.

They capped the woodchip MIS revenue at ~$300m last year, the same as the year before.  At the same time they hastily developed “non-forestry” MIS revenue to ~$150m.  But all were IMO too late and too hasty to succeed.

Cheers.


----------



## pch (15 February 2007)

Jackob said:
			
		

> At the same time they hastily developed “non-forestry” MIS revenue to ~$150m.  But all were IMO too late and too hasty to succeed.




One may argue that the new tax regime means their ineptitude and subsequent 'hasty' entry into non forestry may work better for them in the long run than some of their peers


----------



## Fab (15 February 2007)

I understand there are tax benefits in buying GTP but can anyone explain me how it works? 

Cheers


----------



## Nicks (21 February 2007)

The stock is currently a ridiculous bargain.

It is way oversold, Huntleys also share this view.

GTP have 90% of their products in Forestry:

"the Government decided to give upfront deductibility provided at least 70% of expenditure is directly related to forestry"

The P/E on this stock is now getting ridiculous and by far to low vs risk.

Not too many times do you get an opportunity to buy a stock with such multiples and returns, the Dividends would be around 10% FF alone at this price.

I've grabbed a stack more.


----------



## Nicks (21 February 2007)

PE is 5.25. 
Stock is Leveraged through Margin Lending at 50% I think, as it is seen as quite secure.
Dividends last year totalled 0.15c fully franked and should be higher this year as some of their investments for 04/05 and 05/06 start paying off.

This is a good opporunity not only for an excellent Dividend stock but I think once things settle and people catch on to these stats and the fact it was oversold, at current prices it represents an excellent opporunity for some decent Capital Gains in a fairly short time period on a relatively good stock.


----------



## Jackob (21 February 2007)

Too dangerous to catch a falling knife in any case.

Today GTP had another 7c (3.3%) slump to $2.05 with 3,000,000+ shares changed hands.

Looks like the instos are determined to push it well under $2 within days.


----------



## Out Too Soon (21 February 2007)

Jackob said:
			
		

> Too dangerous to catch a falling knife in any case.
> 
> Today GTP had another 7c (3.3%) slump to $2.05 with 3,000,000+ shares changed hands.
> 
> Looks like the instos are determined to push it well under $2 within days.




It did temporarily dip below $2 already & I was kicking myself then. Nicks is as per usual correct on this stock, it is wayyy oversold with lots of negative sentiment. What the stock market investors are ignoring at present is GTP does not exist purely because of a favourable tax law, they have a solid business, also the investors in their schemes are locked in, they cannot suddenly take their money elsewhere, whats more since the govt made their decision they have been making noises about changing it or at least softening it.
 I wonder how many ppl close to the coalition parties are buying up big on GTP & co with a bit of insider knowledge   (shock horror!)   
   Presently I don't hold but my finger has been hovering over the buy button for ages.   I just dont want to buy a stock that may have a way to fall yet.


----------



## pch (21 February 2007)

This one requires careful analysis though.. Jackobs prior warnings on debt levels are bang on the money, and although we disagree on *when* they will need to raise more capital, they will have to.. (i am still gunning for next FY)

This will either dilute EPS going forward or gear them heavily..

But the market sentiment is definitely odd. TIM has held quite well the last few days, despite the impact on their business being greater. What am I missing there?


----------



## Jackob (22 February 2007)

Hi Pch,

Thanks for your view.  I now suspect for this 7-day long GTP price plunge there must be something happening behind scene, and my suspicion is that GTP might be arranging a capital raising of ~$200m+ right now.

The following is my reasoning.

In recent years GTP funded all its new MIS projects by raising capital/debts/hybrids.  At present GTP needs money for the following projects.

1) Last year GTP sold $400m+ woodchip projects, which need ~35,000 ha land to be ready by the end of March (next month).  GTP has got ~5,000 ha land from rotation; so it still needs ~$210m to buy ~30,000 ha new land by 31/3/2007.  

2) By 30/6/2007 I guess GTP is going to raise ~$300m or more revenue from new non-forestry MIS projects, which need ~$200m - $300m for preparation. 

At end of last Sept, GTP had about $250m cash (including redrawable bank debt).  So GTP still needs ~$200m+ new capital/debt for balance. 

I know the my above suspicion is very hypothetical.  So please don't take it too seriously.  But it seems OK to explain everything.  Assume GTP was really arranging raising capital now, then it had to go to brokers and the news might leak.  This would cause instos selling off GTP (but not TIM).  

Wait’n see.  If my suspicion was true, then the GTP price should continue to fall like hell … until a sudden announcement and another big fall …  

Again, folks, please don't take my guess too seriously.


----------



## Out Too Soon (22 February 2007)

Hi Jackob,
            That's probably true, although I still think GTP is an incredible bargain (pe of 5.25 wow!) it's all a matter of timing & market sentiment, my finger still hovers over the buy button but that probable needed 200mill will push the sp lower yet.
 I wouldn't be surprised though if early next year this stock is hitting record highs. Heres a story from the Australian that GTP followers should read http://www.theaustralian.news.com.au/story/0,20867,21238253-5001942,00.html


----------



## pch (22 February 2007)

I bought them at various times from 2001 to be a landowner.. but at the end of the day EPS has to grow.. non dilluted, its grown nicely. Add dilution and its very flat. 

(except this year will probably have a big jump as all the non forestry is oversubscribed)

The gains from the rotation start to flow from 09 and really make a huge difference to their capital requirements, but before they can even take advantage of that, they have to pay back the debt they incurred in those years. (so do we wait another ten years?  

Jackob I was told by inverstor relations that my estimate of the reserves, did not take into account Melville Island, so it may be their don't need to spend as much as the $175-200mil figure we were talking about..

I hold until I see the PDS for this year..


----------



## Bongo_Boy (22 February 2007)

Hi PCH,

so what are your new estimates for reserves and how much money will be needed ?


----------



## pch (22 February 2007)

I haven't made any yet.. and for continuous disclosure reasons they won't give me quantifiable numbers..

the gist of my question was that the latest balance sheet 09/06 lists 'unencumbered properties' at 58million. I divided that by 6000 and came out with around 9600 ha. So this would mean that GTP will be aquiring another 25000 odd ha this FY at some $7000 per ha based on the prices they disclosed in the latest report..

their answer was basically that the analysis I provided excluded the access to leasehold land on Melville Island... Nothing more (and I wasn't expecting any).

But when you try and do the math Jackob pointed out some time back that the woodlot to Ha is different for these areas.. Wheras before it was $9000 her ha based on 3 woodlots this area was 2 woodlots at $6000 per ha.. I've not factored this in..  So your guess is as good as mine..


----------



## Bongo_Boy (22 February 2007)

Thanks pch.

The figures you give are not too bad.  It suggests that the number of ha GTP will HAVE to buy this year are 25000 minus Melville usage.  Say 20000 ha all up.    

The thing though is on official correspondence the company have said that only 5000 ha will be able to be used from their current landbank in 08 for 07 prospectus.  This is not so good with 30000 ha HAVING to be bought.   

That is a big difference.  The company has also said that the forestry section of their business is cash flow positive but i can't see how looking at the figures.       

Perhaps $7000 per hectare is too high a price to use for the amount per hectare they will pay.  The $7000 per ha figure has only come from the last 3 month period between June and October (exclusive) and may not be representative of the true ongoing price.  But even so i can't see where they can claim it is cash flow positive.      

Reading the link above about the ATO just allowing a Pine and Mahogany plantation in Darwin i wonder if Great Southern has a similar plan.  Their Moola Bulla station is over 660,000 ha and their Queensland stations much the same.  Now if they could use some of that land for such a plantation, i could see where the cash flow would be very positive.  

But as usual it seems you are having the same success in talking with companies that i do, and thus in understanding where they are at - not much.  They must all take politician classes together on the weekends


----------



## pch (22 February 2007)

Bongo_Boy said:
			
		

> Perhaps $7000 per hectare is too high a price to use for the amount per hectare they will pay.  The $7000 per ha figure has only come from the last 3 month period between June and October (exclusive) and may not be representative of the true ongoing price.




No it is representative - I asked this as well in prior correspondance and they pointed out what while they are paying more, the value of their holdings has also gone up.. (but their policy is to value 1/3 of their holding per year and they will still have to stick to independant valuations).

So you will see in previous posts we talked about this, and whether a 30% increase in price paid equates to a similar increase in the value of the existing assets under management. If it did, they will certainly be keen to recognise this as income (notwithstanding encumbrance).

Hence why I think the PDS is so important.. I feel they need to restructure their forestry offerings to accomodate this price increase in land. Whether they have too much room to move is another question.. 

Looking at their balance sheet I believe that they have enough cash to cover buying some 25000 ha, but once they do that, they are pretty much drawn to their limit and will need to raise more funds next year as the rotations are still not significant then..


----------



## Bongo_Boy (23 February 2007)

Thanks pch.

In that case, it doesn't look good then.    :


----------



## Jackob (23 February 2007)

Looks like something happening …  GTP fell from $2.39 to $2.02 step by step in the past 10 days with huge turnovers.

Even if my suspicion of a new capital raising might not be correct, something big is happening behind scene ...


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## Jackob (27 February 2007)

From http://www.theage.com.au/news/busin...n-harder-ground/2007/02/26/1172338547593.html

Hardwood timber falls on harder ground
February 27, 2007

THE drought is making life tough in both town and country, but this week the big dry claimed a big scalp.

Queensland Paulownia Forests Ltd (QPFL) ”” a forestry company that trades on the Bendigo Stock Exchange, and planned a listing on London's Alternative Investment Market just two years ago ”” has gone to the wall owing close to $100 million. It has also taken 457 convertible noteholders down with it.

Paulownia is a hardwood from China that has been grown in Australia for 50 years. It grows an astonishing three metres a year ”” meaning it can be harvested after just six to seven years ”” but its use as timber has only been recent.

QPFL established the first of six plantations in southern Queensland a decade ago, after spruiking that the wood could be a replacement for western red cedar in the building industry, and even to make surfboards and coffins.

Severe drought has made the planting of the tree almost impossible. Paulownia needs to be planted at a depth of one metre, but the company has struggled to dig 50 centimetres into the parched earth of Forbes in NSW, where it has a 1600-hectare plantation. Drilling costs have more than doubled, there has been little rain to supply the 200-kilometre drip irrigation system, and cash flow has been hit by bad debts from drought-stricken creditors.

The company went into voluntary administration last week and its shareholders, who have ploughed almost $80 million into the company, will learn more about their fate at a meeting with Worrells Solvency and Forensic Accountants on the Gold Coast tomorrow.

The company's 9 million convertible notes last traded at $1 each.

Major shareholders include chairman David Gold, Stephen van der Mye, who once ran the Queensland Industry Development Corporation, and Queensland Liberal leader Bruce Flegg ”” the richest man in the state's Parliament.

Marshall Hall of Bare Publicity said the company needed a "white knight" to survive.


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## Out Too Soon (1 March 2007)

Jackob said:
			
		

> From http://www.theage.com.au/news/busin...n-harder-ground/2007/02/26/1172338547593.html
> 
> Hardwood timber falls on harder ground
> February 27, 2007
> ...




Some of my neighbours tried growing that timber on their 20 acres after advice from dept of primary industry up here, needless to say the trees all died.
Comparing a paulownia plantation to industry standard pine or whatever is like comparing Ostrich farming to the beef or lamb industry. : 
- a few ppl have tried ostrichs up here too,   You need real high strong fences, real high.


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## bunyip (1 March 2007)

The Paulownia tree, also known as the Chinese Empress tree, is considered to be the world's fastest growing tree. In China they say that if you plant a Chinese Empress tree when your daughter is born, she'll have enough wood to build a house when she's married.

Under ideal conditions a Paulownia is capable of growing half a metre in a week. Unbelievable but true......I have several Paulownia trees growing in my garden, and over a period of a couple of months of wet and humid weather during summer when the trees were young, they did indeed grow half a metre a week. However, once the rain ended and the cool weather arrived, the growth rate of the trees slowed down considerably. Also, as they got older their growth rate became less impressive. Over a period of years they've grown at a rate comparable to the fastest eucalypt trees in my garden.

I'm surprised to hear that Paulownia seeds need to be planted a metre deep in a plantation situation. Numerous seedlings come up under my trees each year - the seeds that produce them are hardly buried at all, but they do have considerable leaf mulch providing a natural coverage and a moist environment that's conductive to germination.

It never ceases to amaze me that people, including some who are high profile and financially successful (e.g. Bruce Flegg), invest in companies involved in high risk agricultural ventures.
Regardless of whether it's Paulownias, olives, ostriches, aloe-vera, whatever....investors invariably charge in and lay their money down whenever somebody cooks up a scheme to attract investment dollars for some u beaut farming venture.
I guess I'm a natural sceptic of agricultural ventures. Having spent many years in agriculture myself, I know only too well the adverse effect that drought and various other factors can have on these sorts of schemes. Not for love nor money would I be tempted to invest in them.

Bunyip


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## Jimminy (1 March 2007)

QPFL has been on the ropes for some time with most of their properties suffering poor soil structure, pest problems (wallabies) eating flicker tape irrigation lines, running out of water and general drought conditions.

The Forbes property is the newest as most are in Queensland and are still struggling and even at dieback. Enough said.

Forbes even has salinity issues itself in sections. This company is so crazy that they went ahead with a planting in Forbes last year at the end of December in 30+oC temperatures. Contractual arrangements I believe but a sign of the lack of proper management of this company.

Anyway when you have a company buying up properties, sawmills and handing their executives V8 Lexus landcruisers to drive in the worst "so-called" drought in 100 years whilst their offices are on the Gold Coast and no probable income from trees that aren't growing you can see why this co. is going under quicker than the titanic.

I feel sorry for the investors on this one.


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## Jimminy (1 March 2007)

David Gold doesn't LookSmart now does he?? Sorry just had to say that!


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## barnz2k (2 March 2007)

Been following the recent info in this thread - actualy found this forum because I wanted to know wtf was going on with GTP.
All very interesting. I just hope theres a light at the end of the tunnel.

The main think I didnt understand was how the shares were dropping when their latest report suggested big increase in profits. I think i get it now from the above..
That due to this new law, their recent project with questionable enviromental afffects, and possible big buyers doing some trickery - is all playing a part in this?

Is that a correct summary? 
Still thinking there will be a further drop?

tempted to buy more at the lower cost but not until i see more movement in it..


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## Out Too Soon (6 March 2007)

Looks like GTP had just about dropped enough. Question is When this correction is over will GTP shoot up with the rest? The latest beef project is over-subscribed, so much for the new tax rules having an effect. NOT!

Good as GTP is looking though I'm honestly thinking I should be putting my spare cash in ZFX, OXR, BSG or some other oversold co. when we finally hit bottom.
Your thoughts GTP followers?


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## Out Too Soon (8 March 2007)

Ahhh stop vacillating! GTP's going up while everything else is plunging- no brainer- I'm back in.


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## Porper (8 March 2007)

Out Too Soon said:
			
		

> Ahhh stop vacillating! GTP's going up while everything else is plunging- no brainer- I'm back in.




I think you have your chart upside down out too soon.

Turn it the other way up and you will see that in the last 3 weeks it has gone from $2.40 to $2.04.Just having a retracement from the current strong downtrend i.m.o.


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## Out Too Soon (8 March 2007)

Porper said:
			
		

> I think you have your chart upside down out too soon.
> 
> Turn it the other way up and you will see that in the last 3 weeks it has gone from $2.40 to $2.04.Just having a retracement from the current strong downtrend i.m.o.




If I hadn't been vacillating I'd have bought at 1.95 or so yesty. In my portfolio everything has a red arrow next to it except GTP (just bought) & DLS (hardly exciting .5c after falllllll).
  GTP is currently like a strong swimmer swimming against the current.


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## pch (8 March 2007)

I'm not a chartist, but I did observe many times last year GTP frequently did the opposite to the market.. 

thus I wish it was a bear market


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## pch (9 March 2007)

I have info on a new product from GTP. The high value timber project HVT is stuff like teak and african mahogany. 

$12500 per woodlot and a 17-20 year rotation! 

Project size is 2000 woodlots + oversubscription..  Some returns in years 8-14 due to thinning (up to 3 times estimated). 

GTP gets %15 of the harvest. 

I've been told its slower growth but much higher quality timber..


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## barnz2k (10 March 2007)

Seems to be clawing its way back up! 2.13
while half my others are still in the red.

so this new venture could be good, but we wont see the revenue for a long time?


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## Out Too Soon (12 March 2007)

pch said:
			
		

> I have info on a new product from GTP. The high value timber project HVT is stuff like teak and african mahogany.
> 
> $12500 per woodlot and a 17-20 year rotation!
> 
> ...




I have 3 African Mahoganys at home, lovely big tree, easy fast growing, I'm tempted to clear some of my block & put 100 in, just have to cut off the branches as they grow so you have one long smooth trunk apparently.


----------



## pch (12 March 2007)

I wonder if a harvest period this long presents opportunities for a future carbon credit system? It would be a great additional source of revenue..



			
				Out Too Soon said:
			
		

> I have 3 African Mahoganys at home, lovely big tree, easy fast growing, I'm tempted to clear some of my block & put 100 in, just have to cut off the branches as they grow so you have one long smooth trunk apparently.


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## Out Too Soon (26 March 2007)

The GTP knockers will snicker but what's happened to GTP's interim dividend???  I can't see any ann about it. Not a great way to keep your shareholders happy.


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## BuyandHold (26 March 2007)

Out Too Soon said:


> The GTP knockers will snicker but what's happened to GTP's interim dividend???  I can't see any ann about it. Not a great way to keep your shareholders happy.




GTP moved their reporting year back 3 months last year. Interim dividend likely to be paid in July instead of April.


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## Nicks (27 March 2007)

7.5% Dividend Yield.

No brainer.

Capital Gains will follow a high Dividend Yield.

Reasonably blue chip (and timber chip!) stock with modest leverage available from Margin Lenders in acknowledgement of this and their consistency to pay Good returns.

Also, I called the company and have confirmed, Dividend is due MAY or JUNE simply due to the 3 month shift in their financial year reporting to Sept. Simple as that, nothing else. 

Final Dividend wil be NOV - DEC.

Im looking forward to my nice Dividend Yield. Loving this share price as I accumulate more. 

Check out Huntley's recommendation.

Happy Investing.


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## Rob_ee (27 March 2007)

Nicks said:


> 7.5% Dividend Yield.
> 
> *No brainer.
> Capital Gains will follow a high Dividend Yield.*




Just trying to follow the logic here ... would you not have made a lot more money after bailing out at the first sign of a relentless sell of when the share price was $1 higher recently, rather than trying to top-em-up cause they're so cheap now and wait for a 7.5% dividend yield??

Learning as I go.

Rob


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## Nicks (27 March 2007)

Hi Rob

Not really, im not a big fan of Panic Selling, rather fundamentals, as they inevidably will be what guide the price of the stock. At least a stock that is fundamentally driven.

Also, what you are talking about is very much more a puristic day traders view. While I do frequent trades of some stock more akin to day / frequent trading, GTP is not one that really falls into that category. 

Certainly with GTP there was some panic following some concern over fundamentals, which I feel is now clearly accepted as being an over reaction. It is opporunities like this that do not present too frequently in a bull market. If anyone can point me in the direction of other shares that are returning a 7.5%+ yield let me know, I'd like to look at them.

Hope this helps.


----------



## Seneca60BC (28 March 2007)

From their Fy06 Financial Report - Cash Flow of Operating Activities there is an entry of:

"Securitisation of Loans payments"

Can someone explain to me what this actually means?

Thanks


----------



## bruce1 (28 March 2007)

Securitisation is where GTP sell off their loans to investors or assets held by investors to banks or lending instituitions rather than manage that process themselves.I think GTP have structured most of this process with the bank of Adelaide.Hope this helps in a very simple way.


----------



## Ken (28 March 2007)

GTP got sold down today.

The graph looks ugly and it is heading down in waves.

What dividend should we expect for the year?

15 cents?  and how sustainable is it in the future?


----------



## savtin (28 March 2007)

I must admit it suprised me todays selling. ...I thought the company had turned the corner after yesterdays announcement....and yet we saw aggressive selling in both TIM and GTP today..someone wants out big time.........selling at less than NTA is CRAZY... the break up value of the company is worth atleast $3.30 so it seems silly.....

Does anyone have any idea as to the selling today.....I know UBS sold down its shares....and maybe getting out completely......

GTP release sales next week and should be positive I'd imagine unless they aren't that crash hot????????

Was there any news in the media or brokers downgrades that had an impact on todays action???


----------



## Jackob (29 March 2007)

savtin said:


> I must admit it suprised me todays selling. ...I thought the company had turned the corner after yesterdays announcement....and yet we saw aggressive selling in both TIM and GTP today..someone wants out big time.........selling at less than NTA is CRAZY... the break up value of the company is worth atleast $3.30 so it seems silly.....
> 
> Does anyone have any idea as to the selling today.....I know UBS sold down its shares....and maybe getting out completely......
> 
> ...




"Best" news caused worst slump!  

GTP is obviously on a slippery down slope!

Nothing has been changed GTP's long-term downward trend from $5 double-top. 

Stagnant e/s for years with skyrocketing debts, which is further eating into the earnings year by year.

Govt regulatory changes will  make the situation even worse.

Brokers are predicting diminishing earnings and divi. in the future

Large scale insto dumping has begun...

What else needed to convince people the above facts they can all see?


----------



## savtin (29 March 2007)

Actually Jacob, 

From all that doom and gloom picture you just painted it has become very CLEAR now that GTP is a strong BUY.........


----------



## Ken (29 March 2007)

Buy Signals also require a tolerance for volatility i have found.

Whether GTP is a buy now I dont know,  if we cast back to BHP when it was $24.....  we all know what happened then... people were screaming that BHP was falling over and that commodities were collapsing.....  now look at it up 20%....  imagine the profits from margin loans on them...

History tells us that dips in share price are buying opportunties with GTP and a number of other stocks too.

History also tells us some shares never recover.

Best of luck to all.


----------



## Julia (29 March 2007)

savtin said:


> Actually Jacob,
> 
> From all that doom and gloom picture you just painted it has become very CLEAR now that GTP is a strong BUY.........




Umm, why, Savtin???


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## Rafa (29 March 2007)

Not sure about that comparison Ken

BHP never entered a long term downtrend plus it was posting record profits, 10bill odd!...

GTP has been on a long term down trend for over two years... 
Now fundamentally there may be a reason why it should start going up, but in reality all you are attempting to do is the pick the bottom, and you know what they say happens to those who try and do that...

Just look at the charts!


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## Seneca60BC (29 March 2007)

My humble opinion about GTP is this:

Because there is no perceptible growth in EPS for GTP for the next year, alot of speculators/traders call them what you want are disinterested in GTP.

We as a society as a whole are so consumed by GROWTH that we are not interested in anything else, i.e the financial position of the company for instance - I guess thats the mentality and hence no interest in GTP.

Cheers
Shelton.


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## pch (29 March 2007)

I've learned more about studying financials with GTP than any other company personally.. 

I'm more upbeat in the long term but I'm not hoping for anything much in the interim.. The discount to NTA to me is a good observation to make because this is not intangible stuff whos true value is not always reflected accurately on the books.. this is land, plain and simple. In 10 years from now I still expect it to have a similar or higher value than what it is now. 

As we have discussed before (check previous threads), GTP need a heck of a lot of cash to continue their policy of land aquisition. At some point in the future, GTP will have some large rotations of land when the trees are harvested. When this happens, the benefits to shareholders will be great. But right now they are in the nasty position of needing hundreds of millions of dollars more before this occurs.. dilute and issue equity and face flat EPS or take out weird financial instruments and pay it back in 5 years when the rotations should be significant enough in savings to pay back the loan..

So I'm an optimist, but I feel unless the market overnight becomes long term (as in over 2 years) in their thinking, buy GTP for the yield and forget about it or hang back and market time it in about 3 years


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## barnz2k (5 April 2007)

APRIL 2 - "half year sales up 30%"

been pretty stagnant recently.. Doesnt really same to follow the generall trade, ASX200 tends.. why is that?


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## jammin (5 April 2007)

Seneca - I don't see that a lack of interest by traders/speculators, due to a lack of growth prospects, would be the reason for the fall in SP. I think fear is a more likely cause for the SP performance. The following negatives may be leading to this fear: 
-The ATOs notification that any reconsidered view, of the allowable tax benifits, will be effective 1/7/2008.
- The deafening silence surrounding the interim dividend payment. The negative impact on SP caused by a reduction in dividend can be rather large. The change to the dividend payment schedule may be related to the change in financial year  end, (from 30th June to 31st Sept), but they should be informing the punters.
- The other negatives mentioned in the Chairmans report such as drought affecting the results etc. 

These negatives all increase the uncertainty in this companies future and I think this is what you are seeing in the SP.

Please note the views above reek of fundermental analysis . I am 100% aligned with T/A but an answer from a T/A view point didn't seem to be in line with tone set in this thread.


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## pch (6 April 2007)

jammin said:


> Please note the views above reek of fundermental analysis . I am 100% aligned with T/A but an answer from a T/A view point didn't seem to be in line with tone set in this thread.




Well, you have to grant us at least 1 stock to do FA!


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## Jackob (8 April 2007)

Why doesn't the market react poorly to GTP's 30% increase in its HY sales?

The following quote of my 12/1/2007 post might have answered a bit of the question.

I have checked GTP's 2006 annual report again (pages 12-13) and found GTP's sales revenue increased by 37% p.a. on average from $242.9m (2004) to $456.9m (2006).  However, its e/s kept virtually unchanged at 43.23c/s (2004) and 43.78c/s (2006).  So a 30% increase this year in sales may be too small to keep its e/s from falling...  

Just for your information.



Jackob said:


> ...
> 
> The reality was that GTP in the FY2006 raised a total of $532M debt to generate only $450M revenue.  I estimate that at least $200M of the $532M debt was for the $300M woodchip project.
> 
> ...


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## pch (8 April 2007)

The E/S stagnation was dilution based from equity raising to buy land.

From what has been told to me.. at the time when TIM was being viewed as the more innovative and diversified, institutiuons were unhappy about this excessive dilution of GTP to acquire land, as it was making a major dent in E/S.

So they geared more aggressively to reduce dilution and from that point on the market started punishing them.. (likely woke them up to what Jackob has been concerned about)..

So what do we have.. The big one (TREES3 converts in october 2010 so we will not see that anytime soon)
TREES2 is october 2009
TREES I think converted in April 06 which was a big dilution cause..

So this financial year, we may actually have a E/S that is not weighed down by such dilutions.. in addition, as previously discussed there should be tens of millions not expensed to provisions for crappy harvests of the past, as well as general land appreciation being recognised this year..

But its only till the 09/10 FY when TREES2 and TREES3 convert for I think, $75 and $125 mil respectively..

So I feel this year may suprise.. but I'm getting a funny feeling about 09/10..

I'd have to go back and re-examine the rotation estimates for those years, as well as the terms of their debt facilities also.. not tonight, but maybe tomorrow if I have time..


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## Jackob (9 April 2007)

pch said:


> The E/S stagnation was dilution based from equity raising to buy land.
> 
> ...




I believe from the FY2005-2006 onwards, GTP abandoned its equity raising approach and switched to debt raising directly from banks.  

So there is no dilution by equity raising any more (TREES2/3 have been classified as debt under new accounting standards), but the e/s is directly reduced by increasing interest expenditures.  

The total debts now has been increased to about $2/share, which should bear an interest of 20c per share p.a.


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## pch (9 April 2007)

Ah, don't forget though Jackob that a big chunk of that debt facility is that thing where they pay no interest until the loan matures.. 

I'm not disagreeing with your numbers, it just seems to me that they are pushing hard to improve current e/s by pushing out the income related aspects of all that debt by a couple more years..


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## Boyou (9 April 2007)

Just been reviewing this thread. Wondering if ABC watchers have been viewing 4 Corners tonight. "Tree Change" (Great Southern Plantations is writ large) 

If you respect Chris Master's opinions...... and researchers  (and I do) there was much food for thought in the report..

Is this type of industry sustainable? Are we sacrificing productive land to short term profits? Who cares? Is this type of question even appropriate on this thread?


Cheers, Y'all


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## Portfolio (10 April 2007)

It is important for valuing this company but its not new information.


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## Ken (12 April 2007)

http://www.theage.com.au/news/busin...breaks-says-ato/2007/04/11/1175971179961.html


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## Out Too Soon (13 April 2007)

Ken said:


> http://www.theage.com.au/news/busin...breaks-says-ato/2007/04/11/1175971179961.html




For those of you who didnt read this or previous media releases or watched the TV news etc here is an excerpt. (It's old news by now but some posters have obviously been ignoring the facts)

   "The Government last year legislated to protect investments in forestry managed investment schemes, provided at least 70 per cent of the expenditure is directly related to developing forestry."

Most of GTPs business is still forestry, once the ATO & govt finally stop scr*wing around & leave a permanent decision in place then GTP will be in a very solid position. Remember their cattle project was still over-subscribed despite the ATO ruling so not everyone invests simply to get a tax break.


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## pch (14 April 2007)

The oversubscription relates to this year where the changes do not apply. I expect next year also to be huge for them now that the transition arrangment is extended a year..

So I feel that just because its oversubscribed now is not an indication that people are in it for more than the tax breaks. In fact GTP even said publicly they expected the effect of all this was to have a boom in their non forestry while investors scrambled to take advantage while they still could.

The only way you can make an objective assessment about their non forestry is in the year the change takes effect, or if the test case results in GTP's favour.

I also feel that GTP is solid, however I do agree with Jackob though, that they face some *serious* dilution or *serious* additional debt to fund their stated aim of 35000 ha per annum until rotations from past projects become significant enough to cover it. (When that happens, the company will start paying down the debt they have thus far accumulated.)

You really need to study the financials with this company. They have enough cash reserve to buy land for this year at $7000 per ha. But next year they will need more cash - a similar amount to the debt they undertook. I believe they will do a similar arrangement to what they did with the last debt - defer interest to when the loan matures and use the capital savings of land rotation to pay the loan out. (Interest is still charged, but its not paid in the year it was incurred)

Assuming their rotation figures are accurate, they can easily pay out their existing debt with some left over. 

But the loan maturity co-incides with their largest rotation year coming up (I think it was 2009 or 2011). Later years are actually not as good as this particular year, so the next debt they incur to fund the purchase of land will be tighter as they will have less capital savings from rotations..

Here are some key facts..

- They are now paying 30% more for land than they did last year
- At the time when they reported their cash reserves of a couple hundred million, they did not have that much 'unencumbered' land on the balance sheet - in other words, most of the existing cash reserves will be used to buy the land for this years projects as they do not have that much already bought
- GTP recognise increased land value as income in the year it increased. Think of it as reverse depreciation. So if they have their land holdings valued at $100 million more than it was last year, they will recognise that as income and it will positively contribute to earnings per share. (The encumbrance rule will then impact on this however)
- If they are paying 30% more for land, then the value of the land they already have should have increased a lot more than the 1-2% CPI figure that is usually associated with agri land. 
- Land rotation savings are really not that significant just yet. Even the next couple of years of land available for use from rotation is way less than half the 35000 ha they want to plant each year.
eg say 10000 ha under rotation available and they buy 25000 more ha. 25000*7000 per ha = $175 million. But after this year they probably have some $40-50 million in cash reserves and need to go to the bank again (or issue more shares and dilute).

Now in saying all this, TIM share price also capitulated. TIM do not buy land nor have the same debt requirements. So I do feel the regulatory stuff is the issue and I do think that its currently below fair value (based on NTA alone and consider that those assets should rise in value)

But GTP will likely really start to hit its stride when the rotation figures start to kick in and take up more than 50-80% of their annual land purchase requirements. They won't need to borrow anywhere near as much as previously.

But to get to that, I did a really rough estimate that at $7000 per ha, they will need another $300 million over 3 years to get them through to when they have a lot of rotation. THEN they pay down the debt so you won't immediately get some great EPS. That will take another 2-3 years to flow through and then the company should be in a wonderful position.

At some point I think that common sense will prevail and the market will work some or all of this out  How patient are you! GTP is the true test of the value investor


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## BIG BWACULL (14 April 2007)

Before i read geezs you wrote some S%$t there any way Good morning back to reading


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## BIG BWACULL (14 April 2007)

Sorry Mate after reading quite informative thanks CHEERs am a beginner mind you.


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## BIG BWACULL (14 April 2007)

> At some point I think that common sense will prevail and the market will work some or all of this out  How patient are you! GTP is the true test of the value investor
> Reply With Quote



Well thats right GooD comes to those who wait Invest and forget is my policy if all the fundamentals are set in place than its a sure thing, Time and patience is our enemy (oh and dollars to start)


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## Wysiwyg (14 April 2007)

BIG BWACULL said:


> Well thats right GooD comes to those who wait Invest and forget is my policy if all the fundamentals are set in place than its a sure thing, Time and patience is our enemy (oh and dollars to start)





Good comes to those who don`t wait also!

So while waiting maybe one creates their own enemy.


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## BIG BWACULL (14 April 2007)

Wysiwyg said:


> Good comes to those who don`t wait also!
> 
> So while waiting maybe one creates their own enemy.



YES but in some circumstances waiting is a GOOD thing and a wys thing but any way thats another Thread Cheers.


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## pch (15 April 2007)

BIG BWACULL said:


> Sorry Mate after reading quite informative thanks CHEERs am a beginner mind you.




Thats ok - I almost had the urge to reply with every stock cliche I could think of as an answer 

eg

"Blue sky from here, buyers lining up, go go you little beauty so I can back up the truck and put it in the bottom drawer"


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## Portfolio (16 April 2007)

PCH where do you see this company in 5 years? Do you still see it making money through MIS? I think your bullishness comes from the fact that you do see MIS as sustainable whereas the market doesn't....hence the low PE given as earnings plunge post MIS.


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## pch (17 April 2007)

Good question (and I'm actually not bullish - I *always* listen to guys like Jackob and prefer to hear from negative people 

The market thought it was sustainable for GTP at $3 until the MIS rules changed. Even if non forestry works out badly with the ATO ruling, my financial planner friend tells me that even now there are MIS schemes that operate as unit trusts without the tax breaks so its not unexplored territory. (but GTP has a much larger forestry exposure than TIM so the impact to them is less)

Thus I am bearish on TIM - time will tell there. 

But I think GTP has upward potential because we now have certainty for forestry and the irony is that being slow to the punch has put GTP in a better position than TIM (they were slow to diversity).

But I also think there is bubble in land prices because of what GTP is doing. That will positively impact on earnings in the short term but if there is a collapse of MIS then the asset devalue would wipe them out (Which is I think Jackob's issue with the gearing they are undertaking to buy land at high prices without restructure of their schemes to accomodate) - But in saying that I don't see any dramatic collapse anytime soon..

Also, you can't ignore the capital savings from rotations - and that pretty much will start to bite (in a good way) in 5 years..

Also check out the recent post on HC by AlphaCenturian - he adds some other interesting points..


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## doctorj (17 April 2007)

pch said:


> Also, you can't ignore the capital savings from rotations - and that pretty much will start to bite (in a good way) in 5 years..



That's the other big difference between GTP and TIM - my understanding is that TIM only leases the land so they're unlikely to get much benefit from land rotation and are likely to be hit harder by rising land prices.


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## Antics (17 April 2007)

doctorj said:


> That's the other big difference between GTP and TIM - my understanding is that TIM only leases the land so they're unlikely to get much benefit from land rotation and are likely to be hit harder by rising land prices.





That's not entirely accurate.

TIM acquires the land then sells it into a trust and leases the land back from the trust. 

From memory, TIM holds about a 40% stake in the trust that owns the land, and is also the manager of the trust - so takes management fees as well as its share of the rent and any capital gain on the land.


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## doctorj (17 April 2007)

Antics said:


> That's not entirely accurate.




Cheers for setting me straight.  You really do learn something new every day.


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## barnz2k (18 April 2007)

kinda get whats happening now..cheers.
But if the real turn for GTP will be in this big rotation in a couple years.. Why not wait a year or so before investing? Ofcourse there will be a change pending the final decision by ato, but the date of the rotation cant really change that much can it?

After the final decision is made, think there will be an initial big reaction to it? before settling out again?


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## Nicks (20 April 2007)

barnz2k said:


> kinda get whats happening now..cheers.
> But if the real turn for GTP will be in this big rotation in a couple years.. Why not wait a year or so before investing? Ofcourse there will be a change pending the final decision by ato, but the date of the rotation cant really change that much can it?
> 
> After the final decision is made, think there will be an initial big reaction to it? before settling out again?




The reason you dont wait is because the SP represents future value and earnings potential. By the time you wait, the SP will have been readjusted and you will be paying much more.

I am happy to buy now and get an excellent dividend while I wait for this adjustment, and then I will have an excellent capital gain as well.

Thanks
Nick


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## Portfolio (21 April 2007)

I still don't think GTP will be in the MIS business in 5 years (even timber).  Why?
For anyone that watched the 4 corners show GTP have been propping up their returns to growers.  However they can only do this for the first plantations as they are really small.

If you read the annual report you will see that the first growers ACTUALLY lost money after 10 years of investing without the top up.


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## barnz2k (21 April 2007)

cheers for the explanation nick!

I currently already have shares (bought at higher price damnit!!) and is equal to the most amount I have in any share.. So being a newbie, and theres still a lot of negative opinions, and not  been paid in 4 months! I think ill hold what I have but not buy more..


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## Jackob (22 April 2007)

Portfolio said:


> I still don't think GTP will be in the MIS business in 5 years (even timber).  Why?
> For anyone that watched the 4 corners show GTP have been propping up their returns to growers.  However they can only do this for the first plantations as they are really small.
> 
> If you read the annual report you will see that the first growers ACTUALLY lost money after 10 years of investing without the top up.




Fully agree with you, Portfolio.  

Indeed we never saw a single GTP MIS project which made money.

All the GTP "profits" are just the upfront MIS management fees without deducting the full management costs, which should include tree husbandry, office expenses, interests on debt, "topping up", etc, in the whole project life span.

This was why we said GTP was running at a chronical hidden loss for many years now, and that the present pulpwood projects couldn't run any more without losses at a land price of as high as $6000/ha.  (I think Pch also agreed with us at this point).  

This was also why GTP's project sales jumped ~40% p.a. from 2004-2006, and its "e/s" was only kept around 40c/s, while its debts sky-rocketed from 0 to $2/share.  

I reckon GTP's situation would certainly worsen this year, and its so-called "e/s" would has to fall if its project sales could only increase by 30% (as in the 1H).


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## pch (22 April 2007)

Yes Jackob I do agree and look forward to this years PDS to see if they address the shortfall..

The top up is listed under provision liabilities in the annual and here was the note they provided:

Check note 37

"The first three year’s projects, being the 1994, 1995 and 1996 Projects do share some common characteristics, in that they were the first of the Group’s plantations projects, management was outsourced and processing is to be completed through an independent contractor for a fixed fee based on relatively low throughput volumes and additional resource had been previously acquired for possible use in the projects.

The decision to use GSEC and the amount to be paid is assessed by the board on an annual basis and no decision in respect of the 1996 Project has currently been made. The board and management’s current expectation is that the 1996 project is likely to produce yields similar to the 1995 Project, though still lower than what would be expected from a new Project today. Whilst the Group has no legal requirement to do so, if it decides to acquire timber resource from investors in the 1996 project in a similar manner to the approach adopted for the 1995 project, an after tax expense of up to $6,700,000 may be incurred in the next financial year. It is the board’s current view that no consideration will be given to incurring similar expenditure for the 1997 or subsequent projects."

If I interpret that right there should be no further propping up. However all I can add here is purely subjective. A friend has visited many of these plantations and did say to me that the quality and density of the product in later years has improved a lot due to improved staff/breeding/soil management type practices.. bigger trees, better yield, etc.. but unfortunately I can't give you any better than that.

I did note that TIM has a good week on the back of an announcement of an increased price for their woodchips though.. GTP does see a little potential in the whole carbon trading thing, but while we do not sign Kyoto its non existent. Even then with Kyoto, its marginal at best..

All in all, this really shapes up as the make or break year but we are still short of the necessary info at this stage..


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## savtin (28 April 2007)

I have noticed that the volume of shares traded for GTP has been very high over the last several weeks. Surley a result of accumulation and tax loss selling ----could be a sell and buy back of stock by a large fundie.........

can anyone else with Technical experience comment on the large volumes yet in a sideways (no trend) pattern........you would expect with the companies fundamentals being sound and trading at below NTA that the move when it comes will be explosive and UPWARDS more importantly???????????????????

Regards
Savtin


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## barnz2k (9 May 2007)

wow GTP is currently up about 5% for today!
highest its been in a few months I think. peck of $2.19 today.
Start of upmove or just another small peak before retreating back to the $2 mark??


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## pch (9 May 2007)

No idea on what the price will do.. but here's the reason methinks

http://www.mffc.gov.au/releases/2007/07B015.html


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## Dutchy3 (9 May 2007)

This stock will see 2.75+ before 2.00 again

OK so this is just a daily chart, not weekly, yet price and volume action for the last few months indicates to me that the worst is over ...


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## bernardp (10 May 2007)

Yes, the budget was good news for those holding stocks such as GTP - and hence we now see the increase in the sp. i imagine. The volume has been solid, the previous poster may well be right.

We had one of their representatives present to our tax practice a few months ago for their new project. The confidence their rep showed in the product was quite impressive. A good strategy for high wealth clients.

Will be an interesting one to watch.


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## Ken (14 May 2007)

GTP, 

With such a big thread i thought there would have been some talk considering its up close to %5 again and closing on a high of $2.30. Dividend as well soon. So not the worst time to be holding.

Whether this is just another rise before another leg down make your own judgement.

But whats our valuation of GTP now?


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## Dutchy3 (14 May 2007)

I'll standby my 2.75 mark before 2.00 again. Time line on this one not something I've an opinion on ... 2.30 close today ... really a beautiful chart set up for me.


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## Ken (15 May 2007)

Good news for the industry with takeo over offer regarding auspine.

Hopefully lift the status a little in industry for value companies.


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## Kat82 (19 May 2007)

Portfolio said:


> I still don't think GTP will be in the MIS business in 5 years (even timber).  Why?
> For anyone that watched the 4 corners show GTP have been propping up their returns to growers.  However they can only do this for the first plantations as they are really small.
> 
> If you read the annual report you will see that the first growers ACTUALLY lost money after 10 years of investing without the top up.




Hi Portfolio,

I am trying to learn more about this company.  Where can I find in the Annual Report about the first growers losing money after 10 years of investing?  Also any idea when the next update on tax will be announced?  Thank you.


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## pch (21 May 2007)

hehe, you don't think they would make something like that easy to find? 

Its under provisions under the balance sheet. It will refer you to a note further in the report that adds an explanation. See the post I made week or two ago, I quoted the specific section..


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## Jackob (21 May 2007)

*The HY (6 months from 10/2005 to 3/2007) results*:

*Cash*  reduced  by *$154M* from *$247M *to *$93M*
*Debt * increased by *$2M*   from  *$615M* to *$617M*
*Net debt *(Debt - Cash) jumped by *$156M (42%)* from *$369M* to *$525M*
                  or say jumped by *$0.50/share* from *$1.19/s *to *$1.69/s* 

*9 months (7/2006 to 3/2007)  vs  6 months (7/2005 to 12/2005)*:

*Loss * increased by *$22.4M* from *$0.5M* (in 6 months) to *$22.9M* (9 months)
 or say *loss* increased by *7.11c/share* from *0.16c/s* (6 months) to *7.27c/s* (9 months)

All welcome to have a close look at the above numbers and see whether anything wrong with calculations.  Thanks.

I reckon the results is terrible.  Huge cash outflow and sky rocketing of net debt.   

At the present cash-burning rate, GTP 's cash reserve will be close to finish by the end of June, and it will almost have to raise money again.  Well, I say "almost", so it might not do so next month.  But who knows?


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## kooka873 (21 May 2007)

Hi folks,

Thanks for the recent posts. I've been a holder of this stock for some years.
I saw the 4 Corners report as well & have been wondering about this company for a couple of years myself as to it's future & its MIS(s) .

I attended one of GTP's roadshows in Sydney a few years ago & was impressed with its spiel. Much water has flowed under the bridge in that time. What concerns me is its mix of investments, costs, Australia's future rainfall patterns & future direction.

My gut feeling on this stock is the uncertainty of the company's future direction. The company invokes a feel-good response with its regularly posted newsletters, but is heavily geared to more & more investments in what I "feel" is some questionable agricultural industries..................???
TAX benefits to investors seams to be the focus of this company without it where does the company expect to see significant earnings potential??

Thinking out loud.

Kooka


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## Jackob (28 May 2007)

*Latest Euraka Report: *http://www.eurekareport.com.au/iis/iis.nsf/cl?readform&t=d8AHUY&c=qsh1Df&u=ak/TRLyuk?opendocument 


*Dutton's MIS Cleanup Plan*
*By Michael Pascoe*

The new public market for agricultural tax (MIS) schemes follows government concern over fees, prices and a lack of transparency inside the sector, the Minister for Revenue, Peter Dutton, has told Eureka Report. 

In today's video interview, Dutton singles out “bad operators” in the MIS (Managed Investment Schemes) sector, who he hopes will be weeded out by the creation of a fully transparent, liquid market for MIS investments to be launched later this year. 

Dutton has little praise for the existing industry, dominated by companies such as Great Southern Plantations, Timbercorp and Willmott. And although the stock prices of key operators such as Great Southern have been rising since the new market was announced in the federal budget, Dutton focuses on the failings of MIS schemes and his attempts at reforms though the creation of a secondary market. He says: “The idea is to try to introduce transparency into the market, have some liquidity in the market and have a situation where we can get some transparency into the pricing.” 

Many Eureka Report subscribers will have interests in MIS schemes. Not everyone will make money. To read the industry's response to the new secondary market, see Timber futures' good news from Eureka Report last week, but it is clear from today's interview the industry may be facing a new push for reform. 


*The interview*

*Michael Pascoe: What are the policy aims in developing a secondary market for timber Managed Investment Schemes? *
Peter Dutton: Well Michael, the idea is to try and introduce transparency into the market, have some liquidity in the market and have a situation where we can get some transparency into the pricing. We’ve had a concern in relation to many of the management fees that have been charged in this particular sector. We’ve had concerns about prices that consumers are paying at market and we believe through a secondary market arrangement that there will be some more transparency in the process and that, I think, is a good thing for investors in the long run in particular. 

*So there is a belief in parts of the Government that people are being lured into dud investments by that tax dodge up the front?*

Well, I think what people in Government and in the sector realise is that there are good and bad operators like in any marketplace. Some people have very good returns on investments. Some people have better products in the ground than others. Some products are in more marginal country than others and they have different outcomes when the trees eventually are harvested, but what we do want to do out of this process is make sure that we’ve got markets and experts looking at the way in which these products are priced so consumers can have greater confidence in what they’re paying. 

*The industry seems to have seized on this idea as if they’re going to get a second bite of the cherry. *

Well look, I can’t talk for the industry. All I can talk about is the motivation from a Government point of view and really from my perspective. I’ve looked at this. We didn’t want to get into an arbitrage situation. We didn’t want to get ourselves into a situation where people were trading in tax credits or anything like it so we’ve got some pretty stringent requirements in there. People have to hold their initial investment for a minimum four years and the ultimate aim, as I say, is to make sure that we’ve got as much transparency in the products, so that we have – wherever is needed – a rationalisation in the pricing. 

*There’s some uncertainty about how it will work … Hold it for four years. That extinguishes the tax benefit? *

If people at the moment dispose of their share, and generally you’re talking about a distressed seller. Somebody generally again related to the promoter or to the person that’s put the product to market would purchase back that arrangement and, generally speaking, people would then forgo their taxation arrangements and the concessional arrangements that had been given to them to buy the product upfront. So that exists at the margins in the scheme at the moment. If people traded [after] less than four years then they would have their tax concessions forfeited, but as we go forward, if people have held the investment, the initial investment, for a period of not less than four years and they would be entitled to the upfront deduction and there would be transparency in that process going forward as well. 

*The pricing of the secondary market – what are you looking for? Isn’t there a danger that some of the promoters who are doing so well out of fees in promoting the tax side of it could pervert the market? *

We’ll have some transparency of our own. We’ll be looking at what is a fair market price for these things to be traded so that we don’t have tax credits being passed from a primary to a secondary investor and the ATO will monitor that very closely, so it will be a true market value that’s paid for the product. People – analysts – will be looking at these products to see whether or not there is good value in the product that’s being offered to market and ultimately the sophisticated investors in particular, who will scrutinise these products, very quickly will soon tell us whether or not they’re good value for money. 

*Well, physically how would it work? *

Physically how it will work is that people will conduct themselves on a secondary market, I would have thought, on a secondary exchange. We would have the capacity for institutional investors, for argument’s sake, or sophisticated investors or analysts in the marketplace to look at particular products and we would from there seek to marry up the buyers and sellers. So it would operate in a similar way to exchanges at the moment. 

*Are you looking to nominate an exchange to have that job or is the field open now? *

I don’t think we’ve gone that far. We’ve spoken to some players in the market who believe that they could facilitate the process quite quickly. 

*Sorry. Players in the market. You don’t mean the big promoters who are already out there? *

No, I’m talking in terms of exchanges and people who are bona fide operators at the moment, operating some of the biggest exchanges in the country. So that’s a detail that we need to work through but the important thing is to make sure that we’ve got the analysts looking at these products, to look at present values and future values and where opportunities might vest in some of these products, and they’ll soon discard the ones that don’t. 

*In the work you’ve done in developing this policy, what sort of expectation has built up about what these products will trade at in the secondary market as opposed to what they’re being sold for in the first instance? *

I’ll let the market decide that. I’ll let the market determine what is good value and what’s not and they will soon let the market know what they’re willing to pay and I think that’s a good way in which it can operate. 

*But you can see some expert opinion on what it’s likely to be, in light of Great Southern’s experience and shortfall in returns and having to top up what’s paid to investors? *

Well Michael, I know where you’re headed but I can’t pre-empt any of the market outcomes. I think it’s important that we have transparency in the process. We need to have people looking and independently analysing some of these products and I think there will be some that do better than others. Clearly that will be the case and we’ll see what the future holds.


----------



## Portfolio (28 May 2007)

Good interview.  Any guesses out there as to what 1 woodlot will trade for on the secondary market?  I'll start the ball rolling and say $1,200 for a 2003 lot (4 year old).


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## Jackob (29 May 2007)

Portfolio,

I understand GTP sells each woodlot for $3300.  If it would be only worth $1200 in 4 years, then how could the woodlot MIS projects possibly survive?

No wonder Dutton emphasized the merits of “transparency” and the necessity to “weed out” “the bad operators”!


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## Portfolio (29 May 2007)

Its just a guess based on what was returned in the early projects.  The official company line is that the early projects yielded much less than what they expect from todays project. But given that they wont give any facts on current yields etc i believe any investor to the secondary market would have to assume the actual yields produced.

Interesting discussion but i guess we will have to wait for it to start trading to know for sure.


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## Jackob (30 May 2007)

No matter how the new secondary MIS market will look like, it certainly will have most profound effects on the MIS industry.

Among all the MIS companies, I've observed that only one, that is WFL, has openly welcome the secondary MIS market in its ASX announcement.   All the rest are silent.  

The Govt's aim of the secondary market is quite clear, that is to increase "transparency" so as to "weed out the bad operators".  Well, who are they, the "bad operators"?  Won't we all have a guess?   Didn’t GTP happen to be carefully mentioned near the end of the Dutton interview?  Well, I am not too sure, but I don't know whether J Young would have a very good sleep tonight.


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## Kat82 (4 June 2007)

Any idea why the stock price jumped so much today?  Almost sold last week but my offer price never got hit.  Wonder whether it is a good time to sell.


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## pirate04 (4 June 2007)

Kat82 said:


> Any idea why the stock price jumped so much today?  Almost sold last week but my offer price never got hit.  Wonder whether it is a good time to sell.




Takeover speculation.

http://www.news.com.au/heraldsun/story/0,21985,21841656-664,00.html

Timbercorp is on the move up as well.


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## kooka873 (5 June 2007)

Hi Kat82 & Pirate04 for comments & reports.

Whilst the news.com.au link didn't work the item was easily found on the news.com.au search.

Further to this GTP have also released their latest 'News update newsletter" which I recently received.

A couple of items that stand out here.
Woodchip prices (Hardwood plantation) increased by 4.6% to $189.40 per ton with greater demand for plantation timber. This has to be a good thing for GTP and is encoraging.
Interestingly though in terms of confidence of GTP's Agribusiness the Plantation Timber rated lowest in the  AAG ratings with 3.5 stars & with GTP's Beef cattle with 4.5 stars.

GTP has 5 projects closing between June 15 & June 30, so lots of cash coming into GTP right now. What the investor gets at the end of it all is anyone's guess. The TAX benefits are always pushed hard by GTP for those at the high income tax levels. 

On a global outlook timber prices must increase as resources decrease. What will be GTP's ratio of investment be in timber in 5 years time compared to its other agribusiness investments - I don't know.

Looking at peak oil - if we've reached that point? In the much longer term will paper/wood/metal packaging return in greater popularity as plastic based products become more expensive given that so much stuff is made from crude oil: plastics, cosmetics, medicines, paints etc. What alternative is there to crude oil for the manufacturing of plastics etc re packaging. Something to ponder.....


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## savtin (6 June 2007)

Interesting trading today considering it went EX-DIV today....up to $2.60 at one stage...and closed up 5 c at $2.56.....looks bullish on the charts.......................i wonder if something cooking .........other than the fact that it should be going up and finally realising its true value.


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## Kat82 (7 June 2007)

kooka873 said:


> Hi Kat82 & Pirate04 for comments & reports.
> 
> Whilst the news.com.au link didn't work the item was easily found on the news.com.au search.
> 
> ...




kooka873

I am relatively new to this stock, having bought it in mid-May.  Must admit that I didn't know much about it and bought it for a quick punt.  Started looking at when I repeatedly failed to sell at the price I wanted to exit.  The acquisition news made me think hard about the story:

(1) What is GTP?  Is it a forestry or fund management company?  The company projects itself as an MIS company.  Then again, it is selling to investors the positive outlook for the forestry and agriculture industry.  It will indeed help sell the MIS projects but can GTP's bottomline fully benefit from say the increase in global pulp prices?

(2) Based on historical financials, GTP indeed has not enhanced shareholders' value - it's EPS has been flat for the past few years and debt level has increased.  This is contrary to other pure forestry companies in the market which have enjoyed the strong global pulp prices in the past few years.

(3) The stock prices of any other companies will normally increase in value when their land prices increase.  Not GTP.  It appears that increase in land prices is a headache.

Given the above, would GTP be better to be run as a forestry company, instead of a fund management company?  Where has the value been lost?  Perhaps this is the angle of the private equity investors.  GTP's huge landbank and forestry assets may be worth a lot more than the share prices suggested.


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## Gigabyte (12 June 2007)

Hi All,

Share price up to high of $2.78 today and news of a possible takeover bid (well maybe)  company has announced news of an expression of interest from a third party.  Can anyone shed some light???


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## Jackob (12 June 2007)

Just quote a few lines from the announcement,

”Great Southern Limited (ASX: GTP) advises that over the weekend the company received a preliminary, non-binding and incomplete expression of interest from a party interested in exploring a transaction involving the future ownership of the company.  ...

“There is currently no proposal capable of being recommended by the Board or putting to shareholders for their consideration. There is no certainty that any definitive proposal will be received at any future time. Shareholders should be cautious about drawing any inference about whether any definitive proposal will eventuate or the possible pricing of any definitive proposal.  ... ” 

It sound as if a joke which J Young got in the long weekend party can be written as above.  LOL!

I reckon there is virtually no chance for such an "expression of interest" to eventuate.


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## Bongo_Boy (12 June 2007)

Seems to be all speculation for us at the moment.  

http://www.news.com.au/heraldsun/story/0,21985,21849073-664,00.html?from=public_rss


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## Bongo_Boy (13 June 2007)

http://news.ninemsn.com.au/article.aspx?id=109653&rss=yes

http://www.news.com.au/heraldsun/story/0,21985,21849073-664,00.html?from=public_rss

http://www.news.com.au/heraldsun/story/0,21985,21841656-664,00.html?from=public_rss


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## barnz2k (14 June 2007)

what would this mean to us shareholders?
Short term increases followed by who-knows-what depending on who takes over?
(assuming this isnt all a myth)


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## savtin (15 June 2007)

great finish for GTP .........................up 31cents on the week.

Don't forget the sales results will be released on Monday for the non-forestry products.

Hoping it is atleast $173 million. (This will give us growth of about 20% on last year)

Breakdown

Cattle - $78M
Olives - $45
Wine - $35
Almonds -$15M


Then again the results may be overshadowed by the Mergers and acquisitions speculation.


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## Bongo_Boy (16 June 2007)

http://www.abc.net.au/rural/nt/content/2006/s1952710.htm

http://www.nafi.com.au/media/view.php3?id=491

http://www.nafi.com.au/media/view.php3?id=492

http://www.nafi.com.au/media/view.php3?id=489


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## Dutchy3 (17 June 2007)

Ahhh ... it did make 2.75 before it saw 2.00 ...

Textbook chart set up ...

What happens from here?


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## Jackob (17 June 2007)

Dutchy3 said:


> Ahhh ... it did make 2.75 before it saw 2.00 ...
> 
> Textbook chart set up ...
> 
> What happens from here?




Dutchy3,

Please excuse me for my ignorance in charting, but isn't the formation called "*isolated islands*"?


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## Dutchy3 (17 June 2007)

Hi Jackob

I'm sorry I don't really know myself. I do like the various gaps up on a few of the opens though ... potential resistance around 2.90 - 3.00 based on the trading pattern around Dec 2006 ... else just HOLD


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## Jackob (18 June 2007)

Dutchy3 said:


> This stock will see 2.75+ before 2.00 again ...




Hi Dutchy3,

Yes, a chartist told me that the present GTP chart pattern is called “isolated island(s)”, which usually has only one island, but this time it has 2.  This kind of pattern indicates the price levels may not be sustainable.  So your above prediction “This stock will see 2.75+ before 2.00 again" can be perfectly correct. 

Today’s candlestick pattern is a doji star with reduced volume, which may also well indicate a reversal.


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## hypnotic (22 June 2007)

Definitely seeing 2.75+ now. Closed at 2.86  and up 2.88% today. But on relatively low volume. Are sellers holding tightly for some possible news?? 

Wonder if the widespread rain is helping????

Its been a little while since the speculation of the talks for a takeover bid. Don't know if it will substitate to anything??

From the charts clearly this has formed a nice little cup, but no sign of the handle yet.

If the cup and handle is formed then we are looking at around $3.60.

Or will this head back down to $2.00 

Thoughts?


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## barnz2k (26 June 2007)

GTP continuing to buck the trend.. Closing at an eve $3 today!!

I think this is the first time ive seen a real gain since ive held it! 

hope your right on that $3.60


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## Jackob (27 June 2007)

GTP used to have its annual sales figures reported on July 1.

So, GTP will have its this year's numbers very soon (next Monday?).

Has anyone got any ideas of them?


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## Bongo_Boy (27 June 2007)

Apart from the cattle i am not aware of any other GS product being over-subscribed.

The only indication so far would be TIM's forecast horticulture sales being 15 - 20 % below last years level.


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## barnz2k (27 June 2007)

If the ann is potentially bad, then it might be a chance to take profit before it happens? As I recall last time people thought they werent true figures - as they suggested huge profit increase but didnt count for the massive debt increase too. So it wasnt as positive as made out to be..


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## Jackob (28 June 2007)

barnz2k said:


> If the ann is potentially bad, then it might be a chance to take profit before it happens? As I recall last time people thought they werent true figures - as they suggested huge profit increase but didnt count for the massive debt increase too. So it wasnt as positive as made out to be..




Hi Barnz2k,

Last year GTP's announcement "2006 Sales Increases *30% to $458 million*" (29/6/2006), pushed GTP share price tumbling *$1+* from *~$3.40* to *~$2.30*.

Hard to think what would happen if this year's sales increase would be anythig less than last year’s number *30%*.  Financially GTP is more difficult now – its debt reaches *$2* per share from near zero less than 2 years ago, which needs *20c+* per share every year to be serviced.


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## Portfolio (28 June 2007)

Hi Jacob,

My sources tell me its not great.  Cattle was a big hit (and the market already knows this) but:

Grapes, Almonds, Olives all a flop (although you will get the positive spin from the company).  Forestry obviously still open but they will struggle to get to the same level as last year.  

However i dont think GTP will get the hammering it did last year as the share price is trading on takeover spec rather than fundamentals.


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## barnz2k (28 June 2007)

Jackob said:


> Hi Barnz2k,
> 
> Hard to think what would happen if this year's sales increase would be anythig less than last year’s number *30%*.  Financially GTP is more difficult now – its debt reaches *$2* per share from near zero less than 2 years ago, which needs *20c+* per share every year to be serviced.





Wow. I didnt even see that one (I was travelling at the time). I would have been crapping it haha. Hope it doesnt do a similar thing this year.
I just re-checked and I bought in at 2.98 so as of this second im still actually slightly down.. Not even a profit to take! I thought id bought in cheaper than that..

Wonder what will happen IF IT DOES get taken over?!


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## Jackob (28 June 2007)

Hi Barnz2k,

Wonder why you would suddenly change your idea from "taking profit" to "buying more" within 24 hours!  

"what will happen IF IT DOES get taken over?!"

I reckon not much.  GTP sp has risen 50% from ~$2 to ~$3.  The "takeover" effect has been factored in already.

The more important question now is “*WHAT IF* GTP will *NOT* get taken over?”

Wonder last year's after-June-30 drama won't replay again?

Comparing today’s situation with last year, GTP's real value should have shrunk due to 

(1) Impending Govt regulation changes to wind up non-forestry MIS;

(2) Gov't enforced forestry MIS secondary trading targeting practices such as GTP's "topping up”;

(3) GTP's debt more than tripled to $2 per share in one year, and its earnings per share dropped.

So what else you would you be expecting?


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## barnz2k (29 June 2007)

Hey
I meant I thought that when I original bought in the stock I thought I bought around the 2.8 or less mark - not 2.98
So i dont want to buy more just that I have no profit to take. So either sticking with it or selling - definitely not buying more! 

Actually I bought this stock with on a friends advice - who helped me enter the market in the first place - I trust him and his dads opinion as they have done well in shares and more.

But after 1.5years Im back to where I started!

Ive thought about cutting another stock for not moving after a few months.. 

But GTP is always moving at will and if anything interesting to watch haha.

So if the takeover fails (or doesnt exist?!) and ann isnt good -  could be problems. could drop back to $2 or less, and sharp.


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## Jackob (9 July 2007)

Hi barnz2k,

I am glad that you didn't buy GTP at $2.98.  The present price is $2.44, more than  $0.50 down!

I am not too surprised at such a downfall.  Just quote a bit of what I said on 28/6/2007.


Jackob said:


> Last year GTP's announcement "2006 Sales Increases *30% to $458 million*" (29/6/2006), pushed GTP share price tumbling *$1+* from *~$3.40* to *~$2.30*.
> 
> Hard to think what would happen if this year's sales increase would be anything less than last year’s number *30%*.  Financially GTP is more difficult now – its debt reaches *$2* per share from near zero less than 2 years ago, which needs *20c+* per share every year to be serviced.




Now GTP has announced that this year's sales was *not up*, but *down by 9%*.  Still too hard for me to think what would happen to the GTP price in the coming weeks.


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## barnz2k (10 July 2007)

I was close to selling while it was still at 2.90 and only taking a small loss, but I didnt watch it closely enough to sell before it got too low. 
Still dropping slowly and now at 2.41, so Selling now means losing about 20%!  
hopefully takeover will happen and boos it back up, at which point i may sell.

I know I should already have had stop losses set etc, but I havent sold a single stock since I started in shares, hasnt been that long.

I should set some now on others so i dont lose any more!


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## Kat82 (10 July 2007)

Kudos to Jackob for highlighting the annual sales in advance.  Trouble is even I took notice, just didn't take action, thinking that there shouldn't be a dramatic drop given the takeover rumour.  This forum has quality analysts


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## ozambersand (10 July 2007)

I also am extremely grateful to Jackob and others for alerting me to the market's reaction in the past to "good" sales figures.

I had bought a stack of warrants at $2.30, so was sitting on a nice profit when they went up to $3. In some ways I was loath to sell as I thing long term it is a good concept, particularly if they get into carbon trading.

However, I checked their site on the weekend of 30th June and saw they didn't have "sold out" signs on their plantation and hardwood sales so took the hint and sold for a nice profit.

If it goes back down to $2 and starts and all the indicators are there (eg climbing again, good volumes) I will probably buy back in with the profit so I have free shares!!!!!!! 

So, many thanks again guys!


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## Jackob (11 July 2007)

Thanks for all your praises.  My pleasure to do anything useful for members of this forum.

As many may already know, I have been holding negative views against GTP for a long time, but I usually withhold my full views to avoid conflicting too much with others.  

Return to the topic of the GTP price slump, which has now continued for *8* consecutive trading *days* with a total drop of *$0.63* from *$3.00* to *$2.37*.  My view is that *more has to go* in the coming days/weeks/months.  

If say last year GTP’s "*2006 Sales Increases 30% to $458 million*” announcement trigged a *$1.00+* price slump in the next *12 consecutive days*, then this year's “*sales drop 9%*” announcement won’t be any better.

If last year's “*sales increases 30%*” caused only a small drop in e/s, then this year's “*9% sales drop*” would, I reckon, at least make e/s be *halved *(from ~40c to ~20c or under) and dividend be *cut or even omitted*.


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## savtin (11 July 2007)

Jakob,

You are forgetting one major issue this time around. The corporate activity. i.e. the possibilty of a takeover. 

I personally was lucky and sold most of mine at $3.00 as i didn't want to be in when they announced their results as i have seen what the market has done to them before. I did keep 5000 of them for the takeover possility and was suprised at the rate of decline.....sold my last parcel for $2.58 and was happy as I bought when the stock was at the $2.0 level...can't complain.....

however I do have a mate who has heaps of them and when I suggested he sell half prior to the sales announcement he said NO....and it was soley based on the fact that he felt a takeover was immenant and that it was the driving force behind its recent rally from $2.20 up to $3.00...................so when GTP announceed that there were at least another 2 companies interested in them , he felt he had made the right decision.......................he has lost a little confidence since then but understands that it may just be one fund manager getting our big time and hence has been dictating the recent weakness..............................he still hopes that a takeover will happen..........................................they do have great assets...........and I think that you are forgetting that in your valuation of them......


so he continues to hold ..........for his sake I hope a company makes a bid for GTP north of $3.00.


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## barnz2k (11 July 2007)

I Hope the same, that a takeover happens and pushes them upto around $3 again, and if it happens il set a stop loss so I cant go below 2.90 again!!

Is it possible to set up a stop loss that only happens after it goes over a certain price?? EG: once it gets over 2.95, a trigger happens so if it goes under 2.90 again it sells - but I cant set it now beause its already under 2.90.. does that make sense?

i trade with SGB directshares if it matters.

cheers guys.

(I should have acted on Jakobs advice as I had planned to!)


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## Jackob (12 July 2007)

savtin said:


> Jakob,
> 
> You are forgetting one major issue this time around. The corporate activity. i.e. the possibilty of a takeover.




Hi savtin,

There is a possibility of a corporate activity or takeover, and I do have taken the it into account, but this possibility is quite small.  Just as GTP said in its announcement, “There is no certainty that any definitive proposals will be received at any future time. Shareholders should continue to draw no inferences on the likelihood of any definitive proposal eventuating or the possible pricing of any definitive proposal.”



savtin said:


> … I do have a mate who has heaps of them and when I suggested he sell half prior to the sales announcement he said NO....and it was soley based on the fact that he felt a takeover was immenant and that it was the driving force behind its recent rally from $2.20 up to $3.00...................so when GTP announceed that there were at least another 2 companies interested in them , he felt he had made the right decision.......................he has lost a little confidence since then but understands that it may just be one fund manager getting our big time and hence has been dictating the recent weakness..............................he still hopes that a takeover will happen..........................................
> 
> so he continues to hold ..........for his sake I hope a company makes a bid for GTP north of $3.00.




This is a sad story indeed.  The problem of this guy was that he had grossly overestimated the possibility of the “takeover” at a wishful price and didn't think of what if this "takeover" failed.  And he didn't set a stop-loss.


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## CanOz (12 July 2007)

Interesting chart. So many stocks lately have suffered a similar fate, but this one however to me, is different. Most stocks have exhibited some buying within the selling, absorbing the sellers. This does not look to be the case though, only today was thier any interest, and only from the selling starting to dry up. 

Thier has not been a major selling climax in this stock yet in my opinion. Unlike like others (INL).

For a another company to make a play for this, they would need to own the minimum amount, and that king of volume buying should show up.

Also interesting that it came back to fill that last gap too

Cheers,


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## Bongo_Boy (12 July 2007)

Sold out again at $2.85.  This stock looks to be a great one for large quick gains (or losses).  

My general (uneducated) view is that overall it is still on the way down but if history is any guide there will be at least one more opportunity to profit from a reversal, at the right time.   

Well done Savtin on your trade !  

I agree with your comment about the assets.  It just depends on what price you (or a potential takeover party) values them.

Not sure if the carbon trading will be significant.  From overseas markets there seems to be a general price of $20 per carbon tonne.

I think with the absorption of carbon in a typical (or pehaps 'average' is a better word) eucalypt forest, this would equate to an extra $100 million for a 35,000 hectare planting.  Of course, if there is a takeover, a private equity marketing could create the impression that the carbon trading component would be more significant than it actually might be.  

But then as Portfolio says, the underlying ability for the woodlots to make a profit has not been established and hence should be front and centre of any thoughts.   

However, with the woodlot investment price remaining the same and the price of wood constantly increasing, it would seem that later woodlot investments will do better just from this inflation factor alone, independant of any (claimed or otherwise) increase in growing technology.

I'm looking at a future price of $2 if no takeover announcement is made in the next couple of months.  

A positive announcement could bring the price back up to $3 (obviously depending on the terms).

A negative announcement could decimate the stock and create a great buying opportunity due to the assets Savtin has mentioned. 

This stock is never boring.


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## Jackob (12 July 2007)

CanOz said:


> ... Thier (there) has not been a major selling climax in this stock yet in my opinion.  ...




I agree with you, CanOz, this selling storm hasn't reach its climax yet.  Far from over.    The sellers' queue is still 2-3 times as long as the buyers ( in the "market depth").


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## barnz2k (13 July 2007)

> I agree with you, CanOz, this selling storm hasn't reach its climax yet. Far from over. The sellers' queue is still 2-3 times as long as the buyers ( in the "market depth").




this is probably a really dumb question, but Ive dont actually know.

When you sell a stock, does there need to be a buyer willing to take it? Or does the company simply 'buy' it back from you.
 I understand if you want to buy there may need to be a seller as there are only so many stocks available, but the other way??
ie: If a stock is on 100% selling spree by everyone that no sane person would buy, is it difficult to sell the shares?


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## CanOz (13 July 2007)

barnz2k said:


> this is probably a really dumb question, but Ive dont actually know.
> 
> When you sell a stock, does there need to be a buyer willing to take it? Or does the company simply 'buy' it back from you.
> I understand if you want to buy there may need to be a seller as there are only so many stocks available, but the other way??
> ie: If a stock is on 100% selling spree by everyone that no sane person would buy, is it difficult to sell the shares?




Short answer is yes, there must be a buyer if you want to sell. 

The question is, are you (or whomever) willing to sell at the price they want to buy? If yes, and their price is lower than the last trade, then prices drop.

Prices can drop quickly when there are no buyers at certain price levels.

Opposite goes for when there are no sellers, you must 'pay up' for the stock.

Your just starting to nick the edges of supply/demand. When the penny drops it opens a up a whole new world.

Cheers,


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## barnz2k (13 July 2007)

Thanks Canuk! Good summary there just what I was after.
Makes me understand a little better about how buyers and sellers affect the price too.

Cheers


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## Nicks (16 July 2007)

GTP had a strong about face today... interesting.

Perhaps there will be an update to the cryptic news last leaked out to us on June 12 about a takeover.

Interestingly in a more recent release the company confirmed that there were now multiple interested takeover parties didnt they? I guess this is what the market likes as it opens up the prospect of not just a takeover offer, but a quality takeover offer as a quality price must be offered to secure it if there are multiple bidding parties competing. Mmmmm just what we all like (if we hold shares).


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## Nicks (23 July 2007)

Just a recap on some of the things I have discussed with Jackob offline, in case they offer any value to everyone else:

Hi Jackob

Firstly thanks for your posts on GTP, I always read them with interest.

It confounds me also, this stock. I suspect the interested party / parties may be external to the MIS sector currently, but have no basis for this mind you.

Im holding on purely for return alone, and as you know stocks with good return attract Infrastructure Managemet funds.....I guess this the basis.


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## Jackob (23 July 2007)

Hi Nick,

Thanks for your reply.

The GTP's dividend yield looks very good at present, but it would have to be cut soon if its e/s dropped this year.

I understand that last years (FY2005-2006) *e/s=42c* and the profit margin (before tax) was *38%*.

1)	This years sales were reduced by 9%  --- this would translate to a reduction in e/s of ~*10c*  (so *32c/s* left);    

2)	Debt more than tripled to ~$2/s --- this means a reduction in e/s of *~10c/s *(so *22c/s* left)

3)	Last but not least, the total MIS fund under GTP’s management increases from ~*$1.0B+* a year ago to *$1.5B*.  Thus the GTP’s total expenditures (inc. labour, office, machinery, etc.) should also increase by at least *20-30%* --- this implies a reduction in e/s of *14c/s-21c/s*.  

So how much left in e/s?  Well, only *1c/s – 8c/*s left, but for the reason of *leniency* in my last massage to Nick I said GTP’s e/s this year would be *~10c/s*.  Thus, imho GTP’s *15c* dividend can't be maintained this year.

Cheers.




Nicks said:


> Just a recap on some of the things I have discussed with Jackob offline, in case they offer any value to everyone else:
> 
> Hi Jackob
> 
> ...


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## Nicks (23 July 2007)

Hi Jackob

Some interesting points but:

with point 1. did you consider the changing of their reporting period from 30 June to 30 Sept? anyway I thought they had excellent sales (will need to double check their reports).

Also, re point 2, debt, dont forget to factor in their target debt equity ration - this may be on purpose for tax reasons (have to go back and have a second look at their balance sheet to work this out). Debt is good sometimes.

Point 3 im not sure I understand, their MIS fund increased by $0.5 Billion Dollars, which would give excellent returns to us as shareholders. Anyway you superimpose this increase directly onto their fixed costs? one would think that their fixed costs would go up only marginally (ie you dont necessarily need to go out and purchase an extra photocopier, hire an extra secretary or rent a new office). In other words as a % return on their revenue their fixed costs are significantly reduced not increased.

Share price nice and strong today. Any thoughts?


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## Jackob (23 July 2007)

Hi Nick,

Point 1.  Yes, the reporting period changed.  But their sales dropped 9% from July-June pcp.  (July-Sept is a hibernation season)

Point 2. debt/equity ratio now is close to 100% now.

Point 3. In FY 2005-2006, sales increased by 30% to ~$465M, but because of  “expenses blow-out” e/s dropped.  This year sales dropped by 9% to ~415M, and the total fund under management increased by ~45%, so the “expenses blow-out” will continue and profit will be reduced dramatically.

Don’t know at all  why the price goes up today.  T/O rumour again?


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## Bongo_Boy (23 July 2007)

As someone who is hoping GTP goes down, i actually think Jackob your view is a little unfair.    

A lot of the debt interest is being paid automatically by the annuity product and GTP also announced that last year the cost increases were abnormal due to upgrades in their system and volume capabilities (which may have been a waste IF the non forestry tax concessions are now disallowed).   

Also GTP has not spent anywhere near the $150 million on cattle properties as it did last year, with all the associated expense.

Also they should benefit, a little, from the recurring non forestry income starting to come through.  And there is also minor benefit in the rotation of land for this year.   

With the directors announcing at last years AGM, and then repeated more than once this year, that they will be judged by EPS growth, i expect EPS to be roughly similar and nowhere near a drop of 75%.  Otherwise the directors will look very silly.  

Hope you're right though Jacob, i'll have my money ready.   

Portfolio, how did the sales figures stack up with your expectations ?  I think your point about the underlying investment making a profit, along with Jackob's points on debt are the most crucial for long term GTP success or failure.


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## hypnotic (23 July 2007)

Jackob said:


> Hi Nick,
> 
> Point 1.  Yes, the reporting period changed.  But their sales dropped 9% from July-June pcp.  (July-Sept is a hibernation season)
> 
> ...




Something is definitely fishy with GTP.... there was a late surge starting around 2.45pm today taking out the sell orders in large volumes.

The only thing i can think of is T/O rumour... what else???


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## Nicks (23 July 2007)

"so the “expenses blow-out” will continue and profit will be reduced dramatically" - is this a fact, ie any info supporting this?

I think the reporting season is very valid in this case. m not sure we can make calls on the % sales until Sept, the company themselves in their most recent announcement "however 2007 sales are expected to continue through to the new close of the Company’s financial year on 30 September 2007." Also, nearly all of their projects sold out over subscribed. I dont think sales are an issue. In fact they look strong.

Ok, so I had a look through their latest stamement (Mar 2007):
*Total Assets-$1.583 B,    Total Liabilities-$868m,    Net Assets-$714m,   Cash-$93m*

So the Debt Equity ratio is 1.1:1. Enough cash (but not too much) to operate. Net Assets comfortably cover the shareholders equity.
....Nice

*Looks Pretty Health to me! *Now we know why the SP has been going up. No wonder this is subject of takeover speculation - it's very healthy.


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## Kat82 (23 July 2007)

Latest equity report (July 2007) from Macquarie shows their projections:

2007 revenue $426.6m EPS 31.7c
2008 revenue $449.7m EPS 32.0c
2009 revenue $499.9m EPS 34.7c

However, they also said "due to research restrictions, Macquarie cannot advise its valuation on GTP at present."


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## Jackob (23 July 2007)

Kat82 said:


> Latest equity report (July 2007) from Macquarie shows their projections:
> 
> 2007 revenue $426.6m EPS 31.7c
> 2008 revenue $449.7m EPS 32.0c
> ...




Kat82,

Thanks for quoting the latest Macquarie Report, which indicate GTP's e/s indeed will have a big drop from last years 42c/s  (by ~25%), even though Macquarie is the GTP's t/o "advisor" and a positive bias is expected.

Last years GTP's sales increased 30%, but before its annual report, who would have thought its e/s would drop?  

I have checked that GTP's e/s growth rates in the past 5 years were always lagged behind its sales growth by 30-50% with an average of ~38%.  This says GTP's expenditure always habitually grew much faster than its income.  This situation would have to be worsen this year due to its debt situation (debt : equity ratio = 1.1 : 1), and GTP was debt free just a couple years ago.


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## Nicks (24 July 2007)

A debt equity ratio of 1.1:1 is ideal. You dont want to be debt free as you are making no use of tax nor are you freeing up all the captial you have that could be invested in projects to generate return.

Also, @ approx eps of almost 0.35c this represents a fantastic return whichever way you look at it - approx 15%.

From Etrade, the median is 43-46c:

Forecast Earnings Trends
           30-09-07                          30-09-08 
           EPS (cents)  PE   Growth     EPS (cents)  PE    Growth 
Median  43.7           6.0    5.1%       46.4           5.7    6.2% 
High      45.1           5.8    8.5%       46.7           5.6    3.6% 
Low      31.7           8.3   -23.7%      32.0          8.2    1.0%


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## Nicks (24 July 2007)

I'd like to further add to this. I have a theory as to why the SP is bouncing.

Each time it retraces an Institution, as a precurser to a takeover offer, is buying up parcels of shares. I'm looking for a 'Change in Substantial Holding' notice coming out any moment soon.


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## Nicks (24 July 2007)

Ok so lets see if the theory has merit and if the SP moves up to close even or even higher from here. It would also help if I could see hour by hour volume as well (apart from manually checking). I am suspect that the volume once the share has retraced a bit for the day, or toward the end of the day, is relatively higher.


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## barnz2k (24 July 2007)

The price on GTP is a bit of a rollercoaster lol.

Thanks for discussing it guys - you seem to know what you're talking about and repping both sides 

Good for someone like me with very little knowledge on it. Cheers


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## Nicks (24 July 2007)

Yes its all good discussion and information. 

Guess my theory proved wrong (today). Volume has been significantly higher in the last week though.

Still quite impressed with the balance sheet. Very healthy.


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## pch (26 July 2007)

I've been away for some time - so busy right now.. and unable to contribute here unfortunately, I only glanced at their last report tonight.. I'll make some detailed comment at some point where I have a quiet moment to really read it. But there were a couple of interesting things I noted in relation to provisions for crappy plantations of a decade ago and the annual re-valution of their land-holdings.. something we discussed some months ago.

Crux of the matter for me is less about the debt incurred to hold an appreciative asset like land, but whether they are now paying too much for it. Jacob has aptly demonstrated months back that they have seen a significant erosion in margin.. GTP lives and dies by the rotation potential of existing holdings.. Study the figures carefully...

I suspect they will need a capital raising by mid this year to buy land for next year as they will soon fully draw upon their debt facilities. Last time I estimated that to get them to the point where rotations *really* kick in, it was going to be some $300mil. I think its safe to assume that they will opt to do this in 2 smaller raisings rather than 1 major one in the current climate 

Still think carbon credits means little to GTP. Trees will never be in the ground long enough.. that alone is not a good enough reason to buy them methinks..


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## Jackob (27 July 2007)

Thanks to our old friend *Pch* for his most valuable views.

*Overvalueing*.  It is indeed a worrisome problem that GTP might have grossly overpaid and hence overvalued its lands.  I believe that in GTP’s recent report its hardwood lands were valued at ~*$7000/ha*, while in ANE’s latest announcements against the GNS t/o offer, the best forest lands in the Green Triangle Region (near the VIC and SA border) were valued at only ~*$4200/ha*.  If these numbers are true, GTP’s lands (and its equity) have been overvalued by at least 50%.  This may aslo help to explain why the chance for GTP being taken over is slim.

*Debt*.  GTP’s ~*100%* debt/equity ratio should be viewed against the background of the market average of only ~*37%*.  A *100%* debt/equity ratio may be OK for a blue-chip company with robust business, but for a company like GTP with business under constant threat, it has to cause financial stress.  Also note that GTP’s debts have been increasing dramatically in recent years from virtually nil.

*Cap raising*.  So as Pch said by mid this year (FY?) GTP needs another ~*$300m* cash, which equals to ~*$1/share*.  I’m not too surprised to hear that, but that cap raising would have to affect the sp in a big way, wouldn’t it?

By the way, GTP’s sp slumped again and the t/o speculation is waning?


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## Nicks (30 July 2007)

Jackob said:


> but for a company like GTP with business under constant threat, it has to cause financial stress.
> 
> 
> 
> ...


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## Jackob (30 July 2007)

Nicks said:


> Jackob said:
> 
> 
> > but for a company like GTP with business under constant threat, it has to cause financial stress.
> ...





Nicks,

What I meant by “constant threat” was mainly that companies like GTP have been under constant threat by Govt regulatory changes, such as,

1)	Impending shutdown of all non-forestry MIS projects by 1/7/2008 (unless a court case against the Govt will be won by that time).

2)	Impending Govt enforced “secondary market” for forestry MIS products targeting practices such as GTP’s “propping up” growers’ returns.

Those impending changes have already affected GTP’s business (such as the sales growth rate dropped from 30% last year to -9% this year), and this may also help to explain why GTP’s chance of being taken over is so low.


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## pch (30 July 2007)

At 9/2006 they had $246mil in undrawn debt
At 3/2007 they have $92mil in undrawn debt

Most of this bought land as expected. Investment property assets worth $522mil 9/06 and now worth $647mil in 3/07 

Interesting to see what GTP's opposition are paying for land.. Jackob, check out the adjustment in the 'fair value' of investment properties in note 7. Last year they had to write them down by 7 mil due to the encumbrance rule. This half year they increased it by 5 mil. This is primarily because they adjusted their DCF model (amongst other things reducing the discount rate and increasing the estimated increase in land price).

Note also that the provisions on the balance sheet which is where they must account for propping up the returns to growers from plantations a decade back. Its gone down from 45mil to 11mil. I think this is a positive.. shows that they don't appear to prop up 1997 and onwards..

(The 45 mil was made up of)

dividends                34mil
1996 project timber. 10mil
employee entitlements 2mil

Next time I get time to post I'll have a look at how long it may take to run down the $92mil remaining..


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## Nicks (31 July 2007)

GTP is following an unusual pattern of rising heavily when it gets to the mid 2s.
It is rising today at a far greater rate than the market today - capitalisation of the opportunity the recent correction gave?
What forces are at play I wonder.


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## Out Too Soon (31 July 2007)

Representatives of the Sugar Industry In NQ were  recently complaing that GTP is threatening the viability of the sugar industry buy buying up sugarcane farms to plant teak plantations! 
 Just something I heard on the radio & haven't been able to confirm yet, but certainly a positive sign for a co. that I'm again happily a shareholder.


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## Jackob (1 August 2007)

Today GTP slided 5% or 12c to $2.40.  

T/O rumours are still alive or dead?

BTW, MBL dropped 10% today.  Still got enough money to takeover?


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## barnz2k (2 August 2007)

cant climb up to $2.80 this time. Although just about everything down today so no surprise.

Heres a living in the clouds future headline "MBL assists in huge takeover for GTP. GTP breaks $3.20 and MBL reaches new highs" hahaha. I wish.


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## Jackob (7 August 2007)

Just let's read a short paragraph to see how GTP buys lands and at what a price.

*$7000 an acre*
GREAT Southern Plantations paid $5000 an acre for Ingham farmer Carlo Cavallo's 770 acre farm on the Abergowrie road. This was for the land only and did not include the house, sheds, machinery and crop. Ferry Property rural consultant Bill Micola tells me that that the sheds, machinery, crop and house would put another $2000 an acre on the farm price for Carlo, taking it from a gross of $3,850,000 for the land only to around $7000 an acre or $5,390,000 for the farm, holus bolus.

(From http://www.townsvillebulletin.com.au/article/2007/08/07/5341_talknorth.html)


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## Nicks (8 August 2007)

Jackob said:


> Just let's read a short paragraph to see how GTP buys lands and at what a price.
> 
> *$7000 an acre*
> GREAT Southern Plantations paid $5000 an acre for Ingham farmer Carlo Cavallo's 770 acre farm on the Abergowrie road. This was for the land only and did not include the house, sheds, machinery and crop. Ferry Property rural consultant Bill Micola tells me that that the sheds, machinery, crop and house would put another $2000 an acre on the farm price for Carlo, taking it from a gross of $3,850,000 for the land only to around $7000 an acre or $5,390,000 for the farm, holus bolus.
> ...




Thanks Jackob, just wondering what conslusions you are making from this? I read the link and it seems that farm land in this area can sell for up to $10,000 an acre, holus bolus. Seesm like they got a good deal. 
I note the article also refers to the generous tax concessions from carbon emissions. This is only going to increase imo with the focus on carbon emissions and climate change which will become part of our lifestyle on an ongoing basis.


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## pch (8 August 2007)

re: carbon credits. Research how they work. I do not believe SP movement has had much to do with this. In April this year I asked GTP..

"I know that plantation timber will only have limited carbon sequestation capability between the time that the tree is relatively mature and when it is harvested. As a general rule, if GTP was say, incorporated in a Kyoto signatory country, would its plantations qualify for the carbon credit schemes?"

The answer was that there is opportunity for the company, however it is still to be determined how this would all work. It would be unlikely to generating anything much in the way of revenue over the foreseeable future, and would definitely not replace the primary purpose for planting i.e. woodchip production for the pulp and paper industry.

to quote:

"The landholder holds all of the cards (and obligations) when it comes to carbon credits i.e.100 year liability to maintain a bank of carbon equivalent to the one sold, which means maintaining enough standing trees to sequester carbon emissions from the atmosphere equal to the amount you sold for 100 years - a hard concept when the ultimate aim is to grow plantation timber to be chipped and used to manufacture paper."

Come back to the $7000. Notwithstanding margin pressure, if it wasn't for MIS schemes, would the land be this valuable? If they were liquidated tomorrow, would the land still be worth $7000? In 10 years time when its rotated with a new harvest, will it be worth $7000?

We know forestry from a tax concession perspective now has certainty. We know GTP only buy land because next time around they will not have to. We know that they have some time to go before they have enough land in their bank to rotate 35000 ha per annum which is their stated aim. 

GTP are like a positive gearing property fanboy who has read too many Steve McKnight books  but when they do reach this rotation milestone, their capital expenditure will drop hugely. 

In the meantime ask yourself how well the market is going to react to the inevitable fact they they will need another large sum of money to buy more land - whether by debt or equity dilution..


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## Kung_lou (13 August 2007)

hey guys

  Ive been a lurker for a while, particularly on this share. I wanted to share some numbers and maybe invite some comments on perhaps a silly question from those with far more experience than me.

                              2004       2005    2006
Operating Profit 	63.70%	55.06%	38.64%

Calculated by a simple ratio of Profit without Tax/Total revenue. 

	Operating expenses Percent of Total Revenue		
	                 2004	2005	2006
Admin	           7.21%	6.32%	6.52%
Borrowing costs	0.50%	1.50%	4.60%
Commissions	 5.44%	5.26%	4.77%
Ag and MIS costs 12.64%	19.99%	33.42%
Marketing	     10.51%	11.87%	11.40%
Total	             36.30%	44.94%	60.71%

To me - these numbers are a result of rapid growth and the restructuring due to the MIS changes. Am I missing something? Have I messed up my numbers (shouldnt have - straight from the financial reports). Is this bad news for the future earning portential of GTP?


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## Jackob (13 August 2007)

Kung_lou said:


> hey guys
> 
> Ive been a lurker for a while, particularly on this share. I wanted to share some numbers and maybe invite some comments on perhaps a silly question from those with far more experience than me.
> 
> ...




Hi Kung_Lou,

Thanks for your post and welcome to this thread/forum.

I believe that your "*Operating Profit*"  (63.70% 55.06% 38.64%) was meant to be what is commonly called *"Profit margin (before tax)"*, which is the percentage of gross profit in the revenue.  Apparently, this margin has been squeezed from *63.7%* to *38.6%* in the past 2 years due to escalating costs.  More has to go.

If you (or anyone else) wish to have more clues on the future earnings of GTP, I would like to suggest you having the following improvements on your table.

1)	Add revenue growth rates for each year on the top of the table.
2)	Add earnings/share growth rate at the bottom.
3)	Add an accompanying table with all numbers in their absolute $ terms.

I believe then a clearer picture on GTP's future earnings would emerge.

All the best.


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## Kung_lou (13 August 2007)

Thanks Jackob

That made things a little clearer. I guess that the only way to get a complete picture is to compare the numbers to their competetors.


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## pch (13 August 2007)

I just did some digging while watching South Park  flicked thru the 07/08 PDS..

Had a wry smile because the PDS for 07/08 was for 5000 HA, much, much less than the normal amount. (So much less that they have this amount in reserve from pretty much *now*)

"The sales result of the Company to 30 June 2007 has also been impacted by the deliberate strategy to reduce the emphasis during the current year on the Company’s leading product, the Great Southern Plantations Project, for capital management purposes. However, now that the new taxation arrangements for forestry MIS projects have been enacted, the Company is currently finalising a restructure of this Project, which will result in a significantly enhanced cash position for the Company as well as delivering an enhanced investment opportunity for investors."

In other words.. "oh crap, we'd better plant the normal amount after all!"

What this means though is that it may take longer than I suspect before they have to go cap in hand after chewing through their remaining cash reserves. They have this year and next before non forestry gets restructured into more like a regular managed fund. After that they will need cash..

Kung_lou, I don't think comparing their competitors will give you that much info unless they are also buying their land supply. On top of paying much more for land than they used to, GTP went through a lot of dilution in 04 and 05 and got completely nailed by the MIS legislative changes this year. Usually they plant a heck of a lot more.. 

They also failed to mention the income tax rates for 45c in the dollar moving to $180k pa which won't help their cause..


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## Nicks (21 August 2007)

GTP up strongly last two days.

Wouldnt be suprised if at these prices the interested takeover party that we were first made aware of in June popped up suddenly.


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## Nicks (12 September 2007)

Ok, so I have been watching GTP over the last few days and have noticed an uptrend in share price from what it seems to be small parcells of purchases every 30 seconds to 1 minute.

Is this the big stake thats getting built up for the takeover that was first raised in June?????


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## Rainmaker2000 (12 September 2007)

It's good to see some people actually trying to ascertain the state of the business behind the stocks......Just with GTP and to an extent TIM, from a valuation and 'earnings' perspective, my thinking is you go straight for the cashflow statement........It's tough to value a business in this 'industry' with the inherent complexity, but in addition, you can tell that GTP is a dishonest company..I think everybody in this industry already knows this...in this context, you need to question investment totally, but at the least place more emphasis on the statement of cashflows......for the record, I think GTP and TIM are both undervalued, but my pick by a country mile is TIM, even dispite the Government intervention....


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## Nicks (12 September 2007)

Check out GTPs balance sheet - its fantastic! One would have to think is a predator (as alluded to on June 12) well aware of this too, and hence the frequent automatic small parcels of shares being bought up constantly  throughout the last few days.


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## Nicks (12 September 2007)

Here it comes people.

04:37:46 PM 2.350 449,000 
04:10:33 PM 2.370 7,608 
04:10:33 PM 2.370 1,352 
04:10:33 PM 2.370 6,648 
04:10:33 PM 2.370 5,495 
04:10:33 PM 2.370 2,305 
04:10:33 PM 2.370 3,298 
04:10:33 PM 2.370 1,570


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## barnz2k (12 September 2007)

been watching this too and they have been holding well.
If this is the start of a takeover, how far do you think it could push the price?
And will it hold after the takeover is complete


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## Nicks (13 September 2007)

barnz2k
Not sure, but given that it was at $4 last year and has peaked at $3 this year, I think it could push the share price upwards of $3 comfortably.

Currently around $2.35-$2.37 and rising. *Looking at this price for a comfortable 60c gain min imo if a takeover wanted to be successful, ie. around 30% gain which is also fairly standard for takeover targets with a depressed sp and solid balance sheet and p/e*. 

In other words now is the time for them to capitalise on the weak share price if they want this company which has been trading $3-$4.

Good luck and i'm going to hold for the upside of all this as it could be a very steady or even sharp gain. 

I've seen the activity now over the last few days and the company has been hush since the June 12 announcement, so any time soon they have to comment further, and given this unusual buying pattern I think it might be very soon.


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## nikkothescorpio (13 September 2007)

Nicks,

Am following this too - and like you I've seen a lot of that parcel buying over the past week or so.

Having said that is a lot of smart money setting up to sell between 2.36-2.40 - serious voilume too.

Strange as being is real blood was in the water for the takeover of this one why are they looking to sell so close to the buying point?

Cheers, Nikko


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## Nicks (13 September 2007)

Thats easy to answer. Nerves. Some are happy at this price considering it has been lower. 

But there are plenty of buyers to grab them each time as well i've noticed, hence the stagnant then rise, stangant then rise etc of SP. Classic sign.

Probably peopple getting in while they can as it becomes more apparent that there is something going on, and given the June 12 announcement and $2mill plus trades after close the only thing that seems to make sense is takeover.


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## Nicks (13 September 2007)

... lets not forget people that GTP was trading at $2.65 - $2.78 just before the announcement of a takeover party. This would mean that surely it would have to be trumping that vale significantly for holders to be interested. I stick by my $3+ value of a takeover offer. Thats whats its going to take if they want my shares. Else i'll happily sit with the dividends.

That same party must be even more interested now, and given the consistent buy spread occuring at a rate of around 1000 shares a minute throughout the day (and large trades after close) it looks like its well on its way.


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## Jackob (13 September 2007)

Nicks said:


> Ok, so I have been watching GTP over the last few days and have noticed an uptrend in share price from what it seems to be small parcells of purchases every 30 seconds to 1 minute.
> 
> Is this the big stake thats getting built up for the takeover that was first raised in June?????




Hi Nicks,

I am also watching the PDN trading.  Today the number of "total trades" is 141 at 2:05:30 pm, so it is about 1'42'' per "trade" on average.  But most "trades" are of small quantities and usually multiple "trades" happen at the same time as a big trade, so the actual time between consecutive trades is about 4 or 5 minutes, longer than the 1'42'' average.


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## tommymac (18 September 2007)

Rainmaker2000 said:


> Just with GTP and to an extent TIM, from a valuation and 'earnings' perspective, my thinking is you go straight for the cashflow statement........It's tough to value a business in this 'industry' with the inherent complexity, but in addition, you can tell that GTP is a dishonest company..I think everybody in this industry already knows this...in this context, you need to question investment totally, but at the least place more emphasis on the statement of cashflows.......




Rainmaker2000

I've been looking at this company tentatively though as of yet I have not looked at the management, only the financials.

Why do you say this company is "dishonest"?

Thanks
Tommymac


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## aaronphetamine (19 September 2007)

Wow did anyone see the buy depth just after the close at 4pm... GTP closed at 4.30 after spending most the day at 3.6-3.8 area.. 

does anyone know what was wuth the late buy up (about 160 000 shares brought)


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## Portfolio (19 September 2007)

No I didnt see that.  Are you talking about GTP?  

Why would anyone pay more than NAV - $2.20/share? Wouldnt you just go and buy private land holdings at cost price? Any predator is going to want a discount to take on the skeletons?

Anyway i agree that something will happen here shortly as the company wont want to keep trading into 2008 - MIS is over.  The only thing up in the air is price.


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## Rainmaker2000 (19 September 2007)

"Why would anyone pay more than NAV - $2.20/share? Wouldnt you just go and buy private land holdings at cost price? Any predator is going to want a discount to take on the skeletons?"

Just on GTP, one thing its got going for it is that its been gobbling up all the best planation land for some years.....contrary to my first understanding, such land is a very finite asset not just for forestry but many farming enterprises....to such an extent that many in the industry now believe that GTP is buying and developing remaining land which is totally sub-economic for planations....of course they don't care cause its 10 years till their 'investors' will realise..you may note that TIM is basically taking on almost no new planation land compared to GTP..so there existing land bank can't be replicated by buying land privately.

Just on the 'honesty' of the company, its accounts are the starting point for this claim but basically the whole enterprise may well be a bit of a sham.........Investors are now 'digging up' the trees from the first years of planting and hey presto, the 'investment forecasts' made by GTP is way off the mark......instead of letting these investors wither on the vine, GTP have been 'topping up' there returns with shareholder money......this has not been too significant an expense up to date, but some big lots of trees are being dug up in coming years and GTP can not keep paying off their investors....at the end of the day, people may just realise that plantation investing has been a tax sham all along and most plantations give a worse return than an ING account

GTP is the type of company that makes bottom feeding for stocks very interesting....


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## So_Cynical (19 September 2007)

I'm not holding Great Southern Plantations...just interested if any1 knows
what there "forestry offset" position is...u know "carbon credits"

how many tonnes of offsets do they have?...they must have some
prob a heap...and at some stage in the next 2 years they will be 
very valuable.


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## Dutchy3 (19 September 2007)

Back on the 09/05/07 I called this one above 2.75 .... This time although I see a potential for a rise in price perhaps not as rapidly ... lets see ...


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## Rainmaker2000 (19 September 2007)

Regarding carbon credits........basically the industry is starting to look at this and it is no 'done deal' that they have any carbon offsets at all.....there is currently much debate and carbon research is being conducted adjacent to GTP and TIM sites....as I understand it, even the scientists debate the carbon worth of trees that are planted for 10 years and then cut into wood chips.....still my view is that there's got to be worse industries to be in than planting trees these days


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## pch (19 September 2007)

Rainmaker2000 said:


> "Investors are now 'digging up' the trees from the first years of planting and hey presto, the 'investment forecasts' made by GTP is way off the mark......instead of letting these investors wither on the vine, GTP have been 'topping up' there returns with shareholder money......this has not been too significant an expense up to date, but some big lots of trees are being dug up in coming years and GTP can not keep paying off their investors"




Check my late July post (and a few times prior to this). They should account for this on the balance sheet as a liability under provisions. They have publicly stated that they will no longer need to do that as by their own admission their first 3 years of plantations were crap as they outsourced it. Not saying the results are what investors want.. but they have said they do not need such provisions going forward due to the increased density/tree size and therefore yield per woodlot from 1997 or 1998 onwards (I forget which).



Rainmaker2000 said:


> "....at the end of the day, people may just realise that plantation investing has been a tax sham all along and most plantations give a worse return than an ING account




Sssh!!  Next you will be telling me all those motivational wealth guys books and dvd's on late night infomercials are a waste of money! 

In relation to carbon credits, check my post 8th august on this subject. I asked GTP about this earlier in the year after researching how they worked. I wouldn't buy them based on any hope here..

regards

pch


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## So_Cynical (20 September 2007)

Ok i didn't know they are only growing for pulp...still under Kyoto if the land use changes then the increase in carbon storage is claimable.

Didn't i read a post here that GSP were going to grow teak in QLD..teak
ain't a pulp tree.


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## Nicks (20 September 2007)

Dutchy3 said:


> Back on the 09/05/07 I called this one above 2.75 .... This time although I see a potential for a rise in price perhaps not as rapidly ... lets see ...




I agree Dutchy, something is going on and it seems a steady price increase is happening, which I called the beginning of a couple of weeks back. You can clearly see the automated buys going on every few seconds / minutes and this has nibbled away at the sellers. Over enthusisatic sellers have been biting at this carrot but in the end it may be to their own detriment as it shows no signs of abating.

Someone is definately building up a stash ready for something, an insti buyout maybe, the balance sheet has to look appealing. In the meantime im going to sit back and watch the nibbles. Looking like a steady rise to high 2s or even $3 is on the cars over the next 4 weeks. 

Good short gain i think is to be expected whatever your opionions of their strategic business value, there is no denying whats going on.


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## Jackob (21 September 2007)

Nicks said:


> ...  You can clearly see the automated buys going on every few seconds / minutes and this has nibbled away at the sellers. Over enthusisatic sellers have been biting at this carrot but in the end it may be to their own detriment as it shows no signs of abating.  ...




Hi Nicks,

What you have seen I believe might be just “automated/programmed trading”, which happens to most stocks in the market nowadays.  

What those automated traders do is “scalping”, which makes profits from the price spreads between the buyers and sellers.  So these orders have to occur on both buyer/sellers sides, and they are always in tiny sizes and passive, sitting in the queue waiting the other side buy/sell them.  

Today, GTP has a total turnover of 364138 shares, and ~111 time-distinguishable trades, with average size of 3280 share per trade in every 2.7 minutes.  

Hardly see any “automated buys going on every few seconds / minutes and this has nibbled away at the sellers.”


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## Nicks (5 October 2007)

Hi All,

I just got off the phone to GTP, Investor Relations - Debbie / Deidre something like that. She is the person I got put through to after I asked to speak to Jim Young.

Anyway I asked mainly about two things and thought I would summarise as and share them:
1. Dividend. Expected to be in December, announced November.
2. Takeover. I asked about the 'takeover' announcement on June 12. Basically it still stands as is. The party that is concerned is serious enough and significant enough that they had to release that announcement to the market on June 12. The next step has still not finalised yet so they cannot comment further, however they are expecting to be able to do this sooner or later in the future.

Hope this helps and if you want to be sure about the accuracy please call the company for yourself.


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## The Captain (5 October 2007)

I have been watching this thread for some time and can also tell that I was told that the Great Southern board is yet to confirm the next dividend date or amount however they anticipate that the next dividend will be paid in December 2007. I have to agree with others in regards to the share price in the downwards movement. I think we are going to see below the $2. My target is $1.80 where I think it will have to be re-assessed. The weekly chart shows Elliot Wave and it is looking towards this level of $1.80 beore we see a retracement to the $3 previous levels. It shows that the wave 5 ($1.80) may come in around 26th November. Remember these are my own thoughts and you should do you own research.


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## Portfolio (5 October 2007)

Nicks,

If you ask for John Young say you are from Macquarie and you might be better chance of getting through.

Also ask Debbie the hard questions - ask her what the 1996 growers were returned for their $3,000 investment 10 years ago - net of GST.  Then ask her what they expect for future growers 1997, 1998 etc.

If the figure is low - ask her if she thinks this poor return will impact sales and reduce profits over the next few years. Ask her if she expects the company will have any backlash / litigation from the low return. Ask her if this would be having any impact on the so called takeover.

I could post the answers but i dont want to spoil your fun.


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## YELNATS (5 October 2007)

Portfolio said:


> Nicks,
> 
> If you ask for John Young say you are from Macquarie and you might be better chance of getting through.
> 
> ...




A little strange, playing with riddles? Portfolio, if you think you know the answers to these matters, please "spoil our fun" and go ahead and post them. After all this is supposed to be a free and open forum. Thanks.


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## Jackob (5 October 2007)

I used to say that GTP's business was in the chronical hidden loss and it was not sustainable in long-term.

Would this nightmare become a reality?


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## Nicks (8 October 2007)

YELNATS said:


> A little strange, playing with riddles? Portfolio, if you think you know the answers to these matters, please "spoil our fun" and go ahead and post them. After all this is supposed to be a free and open forum. Thanks.




I agree with Yelnats. Portfolio could you please not post riddles and indeed spoil our fun. The purpose of the forum is to share info for the benefit of all. If you have this info (facts or opinion) I, and others, would appreciate you share it so we can benefit. Just deliniate between fact and opinion so it can help us make up our own mind.

So if you have spoken to Debbie and have these answers, please post the answers to the questions, just as I did. Thanks.


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## Jackob (8 October 2007)

We all prefer detailed information, but I also appreciate “riddles” with gratitude, if this kind of "riddle" makes itself hardly a “riddle” any more.

1996 Growers return.  The 1994 and 1995 growers returns were both “propped up” by more than 100% from the real harvest to achieve a ~5% p.a. yield.  If the 1996 crop could not be “propped up” in the same way, the growers wouldn’t be able to get their principle back for sure.  I guess all 1996 growers should have already got a letter from GTP or soon.


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## Nicks (8 October 2007)

Jackob said:


> We all prefer detailed information, but I also appreciate “riddles” with gratitude, if this kind of "riddle" makes itself hardly a “riddle” any more.
> 
> 1996 Growers return.  The 1994 and 1995 growers returns were both “propped up” by more than 100% from the real harvest to achieve a ~5% p.a. yield.  If the 1996 crop could not be “propped up” in the same way, the growers wouldn’t be able to get their principle back for sure.  I guess all 1996 growers should have already got a letter from GTP or soon.




Thanks Jokob. Can you please provide some substance to this claim, "'propped up' by more than 100% from the real harvest"? otherwise it sounds like a conspiracy theory.


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## pch (8 October 2007)

Nicks, Jackob does not have to answer this, as I have posted on the subject several times in this forum and it has been discussed between me and Jackob in the past. 

Each financial year they have to account for this sort of expenditure. If they know that they have to prop up returns, its a liability they face in the future. Therefore, they account for this on the balance sheet. 

If this was not a legal requirement, you could not get a true value of the assets of a company because you do not have an accurate sense for the liabilities a company has. Do yourself a favour and pick up the last 3 annual reports and check the balance sheet and look for provisions and then read the notes to go with it. 

So, for the year that they actually pay out this propping up money it will be among the expense on the income statement and the provision should accordingly reduce on the balance sheet when the money has been paid.

So, for example, if you put aside $40mil to prop up returns for the next financial year, you will then theoretically have a $40 mil expense for that next year, but the $40mil becomes $0 on the balance sheet.


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## Jackob (8 October 2007)

Hi Nicks,

A “conspiracy” between GTP’s CEO, CFO and Growers?  And also the ATO?

The following is quoted from Note 33 of GTP 1995 Annual Report (p 86, GTP 2006 Annual Report, GTP Website)

"5. On 29 July 2005 Great Southern Export Company Pty Ltd (GSEC), a wholly owned subsidiary of the company, purchased all of the timber from the 1994 Project for *$6.4 million*.

"GSEC acquired the timber from the 1994 Project investors, primarily driven by efficiencies this option provided in timing of shipping and GST related issues. In setting the price for that timber GSEC took account of additional timber resource held by the consolidated entity on its own account, the actual yields achieved in the Project and the prevailing woodchip price and then paid a significant premium to the investors over and above the return they would have otherwise achieved. Whilst Great Southern was under no legal obligation to do this, the board determined that it was appropriate as the consolidated entity had previously taken active measures through the acquisition of additional timber resource to mitigate the impact that significantly lower yields may have on the 1994 Project. Whilst this resulted in an after tax expense of around *$3 million* being included in the results for the year ended 30 June 2005, the cash impact is substantially off-set by the sale during the year of Great Southern’s own timber resource."


So, the total return to the 1994 growers should not be greater than the value of “all of the timber from the 1994 Project (purchased by GSEC) for *$6.4 million*”.  

But this purchase unfortunately “resulted in an after tax expense of around *$3 million* being included in the results for the year ended 30 June 2005” , and this “after tax expense of around $3 million” was actually a before tax expense of “1994 Project timber (note 33)” of *"$4.365 million"* (page 64 of the Report)! 

So the real crop of the 1994 Project was not more than *$2.0m*, which was *“topped up” by $4.4m*, or say *220%*, to *$6.4m*.

Similar “*topping up*” (or “*propping up*”) records can also be found in GTP’s 2007 (ending June) Annual Report (Notes 5 and 37). 

So this is what called “topping up” the growers returns!  *220%*!

PS: Yes, just as Portfolio said, "Jackob does not have to answer this, as I have posted on the subject several times in this forum and it has been discussed between me and Jackob in the past."  Sorry I didn't see his post before posted mine.


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## Rainmaker2000 (8 October 2007)

Just to change the direction of this thread.......I wonder if anyone can explain the recent sudden share price tumbles of plantation owner Timbercorp and manager Select Harvests with GTP price staying relatively strong.....these price tumbles have occurred on the back drop of absolutely no news or announcements....this is just speculation, but would it be fair to conclude that if SHV and their friends TIM were looking to swallow up GTP and have had their offers knocked back, then the share prices would act in this way...its just an idea as TIM and SHV would seem the most likely owners of GTP assets in my mind


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## Jackob (8 October 2007)

Just a correction. 

The second paragraph of my previous post should be

“The following is quoted from Note 33 of GTP *2006* (*NOT 1995*) Annual Report (p 86, GTP 2006 Annual Report, GTP Website)”.

Sorry for the confusion.


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## pch (8 October 2007)

and for the record Jackob - you cut me deep... you credited portfolio for my post 

Excellent digging you did there by the way


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## pch (8 October 2007)

Rainmaker2000 said:


> Just to change the direction of this thread.......I wonder if anyone can explain the recent sudden share price tumbles of plantation owner Timbercorp and manager Select Harvests with GTP price staying relatively strong.....




Don't change the direction now , its one of the most useful threads on this site. But IMO, TIM are hardly in a position to buy GTP, and I know nothing of the other one. I think that potential suitors in relation to takeover parties are likely your large diversified infrastructure mobs like BNB who ike to acquire quality assets and have enough exposure in different sectors to mitigate risk.


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## Portfolio (9 October 2007)

Jackob is right.

If $6.4million was paid to 1994 investors.
And $4.365million was "propping up" (per the accounts) then the actual wood was worth $2.035million.

Therefore wood (sustainable) payout was 31.7% of the payout and "propping up" (unsustainable) payout was 68.3% of the payout.

Therefore given $5148 was actually paid out:

$1636 was wood
$3511 was "propping up".

Can the company stop "propping up"? What do you think the past woodlot investors would do if the company returned them $1636 for their $3,000 investment 11 years ago? What effect do you think this would have on sales?


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## Rainmaker2000 (9 October 2007)

I thought it was widely known about this 'proping up' of returns, the company published it (reluctantly) and even Four Corners reported it.....I guess it is less known whether they will do it in future years......I can't really value this stock but I doubt its overvalued


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## pch (9 October 2007)

You either believe them or you don't.. quoted from their annual...

"The first three year’s projects, being the 1994, 1995 and 1996 Projects do share some common characteristics, in that they were the first of the Group’s plantations projects, management was outsourced and processing is to be completed through an independent contractor for a fixed fee based on relatively low throughput volumes and additional resource had been previously acquired for possible use in the projects.

The decision to use GSEC and the amount to be paid is assessed by the board on an annual basis and no decision in respect of the 1996 Project has currently been made. The board and management’s current expectation is that the 1996 project is likely to produce yields similar to the 1995 Project, though still lower than what would be expected from a new Project today. Whilst the Group has no legal requirement to do so, if it decides to acquire timber resource from investors in the 1996 project in a similar manner to the approach adopted for the 1995 project, an after tax expense of up to $6,700,000 may be incurred in the next financial year. It is the board’s current view that no consideration will be given to incurring similar expenditure for the 1997 or subsequent projects."

This is the among the first things I check for when they release a report..


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## Nicks (9 October 2007)

pch said:


> Nicks, Jackob does not have to answer this, as I have posted on the subject several times in this forum and it has been discussed between me and Jackob in the past.




PCH - chill pill time. Its not taking sides or you vs me (or you, jackob and portfolio vs me). Its about discussion and opinions. As a member of this forum I requested more info. Jackob has done this (thanks) and im sure anyone would agree that this has resulted in more research and info to share. Dont really see a problem. 
Fortunately Jackob posts info to substantiate his claims rather than posting riddles.

Anyway back to the discussion we are all entitled to have. 

Jackob:
"took account of additional timber resource held by the consolidated entity on its own account, the actual yields achieved in the Project and the prevailing woodchip price and then paid a significant premium to the investors over and above the return they would have otherwise achieved."

Whats so bad about this? help me out here if I am missing something. They paid a premium and have listed the reasons why. Looks to me they did the right thing by investors and whilst they didnt have to pay them a premium.... for the reasons as listed, they did probably because of the value of the timber to them. I dont read it as a bail out. Looks like they were 'propping up' their own reserves after selling it off during the year. Perhaps there is really not enough info to extrapolate. I would have preferred more info from the company I must admit.

PCH: 
"I think that potential suitors in relation to takeover parties are likely your large diversified infrastructure mobs like BNB who ike to acquire quality assets and have enough exposure in different sectors to mitigate risk."
Are you saying you think GTP is a quality asset? 

Also, dont forget the other reason why this company does well, tax benefits, future green benefits etc. Im quite happy about investing in a company that plants trees and renewables. Investors are also in it for the tax benefits.

Naturally Project yields of a commodity are going to fluctuate year to year. Dont forget all the tax benefits investors realised from those projects.

*Bottim line:  To the best of my knowledge GTPs investment products remain over subscribed and fully sold and they benefit from their management fees, AND their balance sheet remains excellent.*

In the meantime I will keep holding and take a good dividend yield and await news of a takeover (if it pans out).


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## Nicks (9 October 2007)

"MIS funds will now have to prove that at least 70 per cent of the investment is for actual tree plantations, or their investors lose the full tax deductibility."

Jackob - I pulled this from the news article you posted last Dec.

Remember - GTP has a greater than 70% interest in forestry. We must not forget the tax benefits investors get from investing in these projects. It remains and while it does, GTP will continue to make strong sales.


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## Jackob (9 October 2007)

pch said:


> ... quoted from their (2007) annual...
> 
> "…  Whilst the Group (GTP) has no legal requirement to do so, if it decides to acquire timber resource from investors in the 1996 project in a similar manner to the approach adopted for the 1995 project, an after tax expense of up to $6,700,000 may be incurred in the next financial year. *It is the board’s current view that no consideration will be given to incurring similar expenditure for the 1997 or subsequent projects.*"




The above quote indicates the “topping up” has to be closing down anyhow.  This point was originally discussed in Pch’s 22/4/2007 post.

Indeed the “topping up” is not new, but the vast public/growers/shareholders knew little about the sheer scale (100-220% on the real return).  People used to be refrained from talking explicitly on it.


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## pch (9 October 2007)

Nicks said:


> PCH - chill pill time. Its not taking sides or you vs me (or you, jackob and portfolio vs me). Its about discussion and opinions. As a member of this forum I requested more info.




perhaps you misunderstand my intent as thats about the 3rd of 4th time I have quoted GTP's report on the prop ups.. But if you ask Jackob he'd likely tell you that he disagrees with my assesments quite a bit   I'm less bearish than he and Portfolio are...but probably not quite as bullish as you 

regards

P


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## Jackob (9 October 2007)

Nicks said:


> "MIS funds will now have to prove that at least 70 per cent of the investment is for actual tree plantations, or their investors lose the full tax deductibility."
> 
> Jackob - I pulled this from the news article you posted last Dec.




Nick,

I reckon “*MIS funds*” in the above quoted news article was meant to be “*tree plantation MIS funds*” and “for actual *tree plantations*” was meant to be “for actual *tree husbandry*”.

Please read more posts around that time to find out those meanings.

This “*at least 70 per cent for actual tree husbandry*” regulation is targeting MIS companies, such as GTP, seemingly very high profit margins (before tax) of say *38%* last year or as high as *60%* in early years.  In such circumstances, after deducting the profit margin and *15%+* commissions and promotion expenses, the real money left on *tree husbandry* is only *25% - 47%* from growers. 

The enforcement of the “*at least 70% tree husbandry*” rule, would force GTP’s profit margin (before tax) being reduced by more than half from *38%* (last year) to *~15%* (*100%* minus *70%* tree husbandry minus *15%* commissions).  This is why I would say that GTP’s e/s would have to be less than *15c* or *20c*/share this year.


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## So_Cynical (9 October 2007)

I looked at GSP and a few other similar projects 10 or 11 years ago 
and was stunned at the numbers...it was obvious to me as an industry person 
that they were...lets say...over reaching with 
there targets and claims in general.

I was left with the impression that the projects 
were about fees not trees.


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## Nicks (11 October 2007)

Jackob said:


> Nick,
> 
> I reckon “*MIS funds*” in the above quoted news article was meant to be “*tree plantation MIS funds*” and “for actual *tree plantations*” was meant to be “for actual *tree husbandry*”.
> 
> ...




? i'm confounded by your mathematics.

I assume the 100% is referring to Gross Profit.
why minus 70%?
why minus 15%? (these are an expense?)


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## roland (11 October 2007)

I just took GTP off my watch list. Have done OK in the past, but feel the future or anything to do with agriculture is going to have a hard time of it with water and drought etc. Just my $0.02


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## Jackob (12 October 2007)

Nicks said:


> ? i'm confounded by your mathematics.
> 
> I assume the 100% is referring to Gross Profit.
> why minus 70%?
> why minus 15%? (these are an expense?)




Hi Nicks,

“*100%*” refers to the tree *growers’ money*, or their *upfront fee* for the 11-year projects, which also is GTP’s “*sale revenue*” (down 9% ending 30/6/2007 as announced), roughly equal to its “(gross) *income*” in its “profit and loss” account (it will be announced by end of next month).

According to the new “*at least 70% rule*”, at least *70%* of growers’ money (GTP’s income) has to be spent on “*direct tree husbandry*”.   Obviously the “*commissions and promotion*” expenses (*15%+* of the sales) won’t be counted as “*direct tree husbandry*”.  Thus what left is 

*Profit margin (pre-tax) = 100% - 70% - 15% = 15%*

Which would be much less than last year’s *38%*.


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## Nicks (12 October 2007)

Thanks Jackob, but i'm still not sure I understand why you would not include the 70% dervied from trees in their income. Perhaps I am just not following.


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## Jackob (12 October 2007)

Nicks said:


> Thanks Jackob, but i'm still not sure I understand why you would not include the 70% dervied from trees in their income. Perhaps I am just not following.




The “70%” in the “70% tree husbandry rule” refers to 
   70% of the fees GTP collected from tree growers 
= 70% of GTP’s sales revenue 
~ 70% of GTP’s income.

It says that at least 70% of the tree growers’ money to be spent on the trees.  Fair enough.  Thus it targets the very high profit margins (38% - 60%) in the past.


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## pch (12 October 2007)

jackob..

I'm not an accountant, and I'm posting this based on no research, but it seems to me there are ways around this..

eg amortise revenue over say 2 or 3 years by changing the 'management fee' structure
restructure so that say, a wholly or partly owned subsiduary does the 'tree husbandry' and charges a fee to the MIS promoter

your thoughts? The 70% thing hasn't really bothered me that much actually.. I'm more worried about all that money spent on cattle


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## Out Too Soon (13 October 2007)

I'm no accntnt but I have a good memory & despite the never-ending doom predictions on this co. they're are still around & surprising the doomsayers. I look forward to the dividend this December & will continue to profit from the sp gyrations.


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## Rainmaker2000 (27 October 2007)

I'm not sure how forthcoming GTP has been so I'll just post this message from the SHV thread.........

Hi guys....sorry to fill up the post box...just did a little more analysis....the $4 million before tax, as in 10% of total profit is ONLY for the company owned acres........that is, SHV manages about 35 000 acres (40k next year) and the $4 million dollars is only water for 3300 acres which are companies owned and that's still skimping on water apparently...the 'investors' are responsible for the rest......I can now understand why that question marks the viability of the entire sector at least for this year........that's $1212 dollars an acre extra for water which no investor and financial advisor would 'foresee' when they made the 'investment'........just this year would kill the aenimic 4% return which these guys pray for when they avoid tax.....that is a very interesting development and explains why TIM has been dropping and SHV although I don't see it as such a negative for SHV as there are positive elements of this....note that the chronic water shortage probably does not affect GTP forestry much at all


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## pch (29 October 2007)

Saw this today - bit late I know..

http://www.abc.net.au/rural/news/content/2007/s2064181.htm

So how would they pay for this I wonder?


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## Out Too Soon (7 November 2007)

Nice little break out yesty but the buying volume looks quite thin today.
 Now they have a 50% interest in a wood chipping mill I feel I no longer want to be associated with them.  
 Have to wait for a real up trend to dump them though. Guess patience is the word.


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## barnz2k (7 November 2007)

i noticed this too. I think if they make another break towards $3 im gonna sell. Hopefully at about even or slightly above entry.. 
I just dont have support for them now, even their fluctuations are less and just stagnating around the low 2s.


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## pch (19 November 2007)

Can you imagine the fallout if this is comes to pass?

http://www.businessspectator.com.au/bs.nsf/Article/DAscenzos-high-rolling-gamble-93QRP?OpenDocument


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## barnz2k (20 November 2007)

pch - please correct me cause I dont fully understand this.

Basically once this goes through court, either the Tax Commissioner wins his 'adaption' of the law - and basically concretes this whole deal about tax structures etc which are causing havoc on the industry and causing investors to sell, or he LOSES and has to pay back a whooole lotta cash to the companies fighting against him? As his speculation has caused their share price to fall?

So if he does lose, could we see money heading back into shares like GTP, and a nice cash deposit made to the companies themselves?

And if he wins, is this going to bring forward the downside by confirming the outcome sooner than expected?


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## Rainmaker2000 (20 November 2007)

I'm pretty exposed to Timbercorp which mainly does agriculture projects, not forestry and Select..I used to own GTP....My view is that the market has already priced in the abolition of MIS...

Thus if they lose the case, I don't expect much negative share action......I'm not sure if you've read the legal opinions (me being a lawyer too) am of the firm view that the ATO interpretation will be thrown out.  Simply because these companies just use the same deductibility provision everyone else does.  It would be an interesting judgement in favour of the Commissioner.....

I would not assume that if the Commissioner loses, then MIS is here to stay......there will be a positive share price reaction.........but the Commissioner will then just ask the Government to legislate his new view just as the positive view on forestry will be legislated.........

With the new labour government in office, they will not decide to do this quickly.......and since this industry creates a lot of jobs but is not good for average farmers, it will certainly be very interesting all round....either way I see plenty of upside but not so much in GTP


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## Jackob (26 November 2007)

This year's annual report is out today.

EPS (diluted) = *20.7c* down *49%*
DPS (whole year) = *11c* down *3c*

They are in stark contrast with the following "brokers' consensus" (given by COMSEC).

----2006 *2007* 2008 
EPS 41.6 *43.7* 46.4  
DPS 15.0 *15.0* 15.0


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## pch (26 November 2007)

i don't know whether you noticed Jackob, but a lot of the things we speculated would happen as much as a year ago has come to pass.. 

That's just from reading the presentation - haven't gotten round to the nitty gritty of the actual financials yet..


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## Rainmaker2000 (26 November 2007)

What particularly interested you Pch.........I found GTP's future plans to be basically identical to TIM's although it is clear that GTP is far more advanced.....for example, their new investment products are presented to be far more earnings accreditive than their MIS projects.....while this is a tough proposition to believe, I always thought there was a chance that once these guys went 'back to the drawing board, they could come up with some better investment products.......after all, lots of 'farmer Joes' make exceptional rates of return off the land and GTP has more economies of scale than them........

I always thought there was a lot of value embedded in this sector and there are now some signs that people are realising that these companies have been discounted far too much.....for example, check out the new agricultural fund that is being floated on ASX.......agriculture funds management is now becoming a growth industry of sorts and GTP and TIM already have a large proportion of the finite land assets


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## pch (27 November 2007)

Hiya

I also think GTP is in much better shape than TIM, not only for the asset base, but also the minimal exposure to Murray/Darling water issues. TIM also have had a pretty crappy operational cashflow right now whereas GTP's has been good. I've always been in favour of them buying their land, despite the debt it takes, because all they need to do is sit tight and within 5 years, land rotations take a massive chunk of capital expenditure away.

But, in the meantime they have a lot of debt, margins tightened up because costs increased and the regulatory framework changed around them. Last year the $1 million super thing would have hit them of course, but they strangly don't mention the income tax rates where now you have to earn a lot of money before being taxed at the highest rate.

But all that aside, Jackob and I at various times discussed GTP's debt. Took me a while to get what he was saying, but in the end we concluded that it was inevitable they restructured their upfront free - which they now have increased. 

I notice they also are going to amortise the income they recognise, probably to get around that 70% rule. That was also predicted.

I also suggested they will probably change the way they revalue their land to book income that way - they have dropped the discount discount rate and booked some 30+ million of income from this (and they suggest the value they care carrying is conservative for some of those land assets)

There are other things too, but it would take too damn long to write about 

I am pleased they reduced the amount of cash they burned as I expected them to need another $300mil by now. Instead, they drew another $50mil from their bank facility and extended their credit by $100mil. Aha, but EPS is half what it was 

Still, despite me saying all of this, I think it will be quite a while before GTP will have any significant rise SP. Investors and funds are much more short term oriented than GTP's eventuall payoff time.. I thought this report was so-so, for all of the positive things, there are things that make you go hmmmm


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## Jackob (27 November 2007)

Pch,

Yes, we did discuss GTP’s debt and related issues at depth, and concluded that GTP would have to increase its pulpwood project upfront fees, otherwise it wouldn’t survive, as its projects were in a state of hidden chronical loss.    

Now, thankfully, our views have been graciously confirmed by GTP announcements that it will “restructure” its pulpwood projects by raising the upfront fee by *47%* from *$9090/ha* to *$13,400/ha*.  

A *47%* jump of application fee to *$13,400/ha*!  Well, it’s of cause seemingly good for GTP, but is it also good for investors?  How much returns should still be expected from schemes?  Would other MIS managers (such as TIM, GNS ...) also follow GTP to raise fees?  What if they wouldn’t?  In that case, would anyone still rush to buy GTP's before June 30 next year?   … I reckon uncertainties and dangers are obvious.  

It also reminds me other questions: How was the final results of GTP’s 1996 pulpwood project?  Anyone knows anything of it?  Still keeping "topping up"?  Or just leave as it is?  

The other item of GTP’s “restructure” is reducing the CAPEX from *$7000/ha* to *$5500/ha* for the pulpwood projects.  It looks like as if GTP has changed its strategy from buying lands at *$7000/ha* … to … renting?   Just as TIM has been doing for years and now for GTP to follow?  A ~*$500/ha pa *rent (~*7.1%* on the capital of *$7000/ha*) over 11 years just makes *$5500/ha*?!  If this change is true, it can again confirm the failure of GTP’s old strategy.  

… More might follow later …


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## Rainmaker2000 (27 November 2007)

I do prefer the TIM exposure to GTP, but I agree their operational cash flow is appalling at moment, verging on troublesome...........I like TIM cause they put most of their efforts into their long term agreements (mainly 23 yrs) which produce their 'annuity style' income and cause they do 'real crops' mainly.......next years annuity income will be $300 million and its only just beginning, which is pretty significant since their currently capitalised at $550 million......TIM is also moving to a 'less capital intensive' business model.........I honestly think the 'investors' will be there for these products whatever they charge, mainly cause they pay off the 'advisors' so much


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## pch (27 November 2007)

Jackob said:


> Pch,
> 
> The other item of GTP’s “restructure” is reducing the CAPEX from *$7000/ha* to *$5500/ha* for the pulpwood projects.  It looks like as if GTP has changed its strategy from buying lands at *$7000/ha* … to … renting?   Just as TIM has been doing for years and now for GTP to follow?  A ~*$500/ha pa *rent (~*7.1%* on the capital of *$7000/ha*) over 11 years just makes *$5500/ha*?!  If this change is true, it can again confirm the failure of GTP’s old strategy.
> 
> … More might follow later …




Jackob you always give me too much homework to do!  I never looked at this bit..

Lets make a bet. If they get through to 2011 or 2012 where their major rotation kicks in (co-inciding with when their capitalised debt is due and paid by that saving), then you owe me a beer! 

Whether I care by then is another story!


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## Jackob (28 November 2007)

Hi Pch,  

I would never mind to buy you a beer or so, but I suspect the GTP pulpwood business game may wind up soon. 

I reckon the decision of raising the application fee by a hefty *47%* to *$1340/ha* would never be taken easily, if John Young had not been prepared for a possible wind-up in his mind.  

As we discussed months before, a genuine pulpwood project could never survive on a *$9090/ha* application fee when the land price had surged to *$7000/ha* or more.  I reckon that a *$1430/ha* level fee would be the minimum to survive.  So if customers are scared off at this minimum level, why not simply let them go?  

On the other hand, the returns on pulpwood projects are never good, and GTP has NO money to “top up” them any more.  Even if the fee were kept at $9090/ha, how many investors would still keep coming any way?  

So, why not let the game be over?  Alas!


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## The Captain (28 November 2007)

Well Jackob, maybe you should change your name to doom and gloom. You never have anything good to say about this company. I am never suprised to read your comments, but have you ever seen their plantations, yes have you done any real work and visited the plantations. If you had you would have seen a huge difference in the size in the trees in the plantations over the years. Later projects are 3 times the size of earlier projects at the same point in the projects life. While earlier trees did not have many of the advantages of the latter projects ie genetic selection.GTP did the right thing in topping up earlier returns. They wont in the future as there is no need to. Last results for 2006 returns to growers looks to be about $4300. What will we see for the future? maybe by 2009 - 2010 we should see returns of about $7500. Not a bad little earner. What about the change in Government and now the guarantee of carbon credits return to investors, another very positive aspect. And the test case should also prove to be in the industry's favour. I agree that at the moment s.p is down and may not change for some time and the short term future does not look positive for s.p. growth, but GTP is here to stay and will be a very profitable company for the future.


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## Rainmaker2000 (28 November 2007)

Captain, it's good to hear some observations about the actual growth of the trees, but your input in relation to Jackob is unwarranted..........GTP's been a dishonest company and its whole product proposition to its investor is, well, not totally legit is it............I think its totally legitimate to take 'a glass half full' approach to the company and management.......although I do see value in the sector but GTP is my last pick


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## The Captain (28 November 2007)

Rainmaker2000 said:


> GTP's been a dishonest company and its whole product proposition to its investor is, well, not totally legit is it............I think its totally legitimate to take 'a glass half full' approach to the company and management.......although I do see value in the sector but GTP is my last pick




Rainmaker, I am not saying that GTP is the best thing since sliced bread. But that there are positives and its not all doom and gloom. If you want doom and gloom check out Queensland Paulownia. In the not to distant future we are going to hear all about this failed company and the really dishonest part of MIS. There will be lawsuits over this one very soon and I suspect that it will change MIS forever.


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## Jackob (28 November 2007)

Hi Captain,

I saw what you wrote in your “signature” of your “profile”, (quote) “I'm just a beginner. Dont take me too seriously…”, so I won’t take your words all too seriously.  But I am still interested in the following.

“…Later projects are 3 times the size of earlier projects at the same point in the projects life. …  Last results for 2006 returns to growers looks to be about $4300.”

First I reckon the 2006 results should not be the latest by now.  The latest should be the 2007.  The pulpwood projects were initially of 10-years, but delayed for 1 year and all become 11 years.  Growers hand in their money every year by the "June 30" deadline and should get the returns around the same date in 11 years.  Today it is already 28/11/2007.  Why haven’t we heard anything about the 2007 results?

Two possibilities.  
(1)	The project might suffer a further delay and probably have become a 12-year project. (But why no announcement?) 
(2)	The 2007 results were so poor that no insiders want to talk about.
(3)	Or what else?

As to the earlier results of 2005/2006, we had very good discussions on this thread about a month ago from posts #975 (5/10/2007) onwards.   If you go back to read those posts again, you may find that the “earlier results” were all dramatically “*topped up*” (or “*propped up*”) by up to *220%*.

So even if it is true that “later projects are 3 times the size of earlier projects”, the future returns would still probably not be more than the returns in earlier years (after “propping up”).

Your 2006 returns number “about $4300”, I think refers to the *$3000/lot* initial investment, and it only represents a meagre *3.3%* p.a. return over 11 years, barely matching the inflation.  At this return rate, all the investors using a loan would lose money badly.   

Alas!


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## pch (29 November 2007)

Captain

In relation to your post on Jackob's negativity to GTP, what is preferrable?

Nothing but fanboy ramping eg "its all blue sky from here" is of much less value than someone who is bearish and prepared to tell you why, to a level of detail that allows you to make much more accurate decisions.

For that reason, I really like the GTP thread. Jackob and Portfolio in particular encourage me to keep researching and justifying my views.

regards

pch

p.s GTP is an excellent company to use to learn how to read annual reports


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## Portfolio (29 November 2007)

Jackob,

I think the $4,300 figure is the return from the 1996 project (delivered in 2007).  So i suspect the answer to your question is #2 - its bad so they dont want to talk about it.  Not sure where i read that though and they should really be disclosing this stuff to the ASX.  Pretty sure there is still "topping up" in that as well but dont quote me on it.

If anyone else out there still thinks MIS is viable after companies have to actually pay out returns (yes they get to hide things for the first 11 years and then a few more if they "prop up" returns) look at their latest acquisition (ASX announcement dated 05/11/07):

They bought 14,700 hectares of hardwood plantations for $47.3 million.  And the plantations were established "between 1993 and 2003".  

Assuming an average planting date of 1998 this means they have effectively bought 44,100 (14,700*3) "year 9" woodlots for $47.3million.  Dividing $47.3million by 44,100 equals $1,072 which means they have bought "Year 9 woodlots" for $1,072.  Now given they sell a year 1 woodlot for $3,300 and sell them based on research which somehow predicts 7% returns (with alot of disclaimers).  Assuming "woodlot investors" expect a return (surely they do and would expect at least 7%) they would be expecting something around $6,000 after year 9.

AND:

1. They have now increased the upfront fee making the hurdle rate higher.  
2. I have assumed that the 50% interest in the woodchip mill that was in the same transaction is worth nothing but was instead just a smokescreen to stop this type of analysis.

I realise that this is a very crude calculation but I think people get the point.  Hows that for cynical. Now you will think Jackob is a bull on GTP.


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## pch (30 November 2007)

Yes Portfolio the lack of transparency totally sucks. On one hand they state via their provisions that they do not expect to need to prop up returns again, but they do not publish any .. hmm whats the word ... 'density estimates'.

But the proposed part of the legislation that makes MIS schemes 'tradable' after 4 years? was I think designed in part to alleviate this. 

One can look at it this way.. Their argument was that originally management of the planting was outsourced in the early days and now via improvements in land selection, preparation and genetic stuff, the trees are on steriods and bigger, fatter and therefore much more pulp per ha.

There is absolutely truth to this. 

But by Jackobs figures (prop up by 4.6mil), you would require the pulp yeild per ha to triple, assuming prices are flat. I'm sure I spied a graph in their roadshow showing an increase in price for the resource but it was not huge so lets be fair and assume that if yields increased by a multiple 2.5 you wipe out the 'top up' factor.

So this begs the question, will the yield improve by 250% between 1996 and 1997?

I have a feeling that current projects being planted now could absolutely meet this sort of target and then some. But I think that 1997 would be nowhere near it. Each year probably improves upon the last..

regards

pch

p.s The more I think about it, the more GTP reminds me of characteristics of a LIC like Argo investments. Buying below the NTA and selling when it is over a certain premium is perhaps not a bad way to play GTP.


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## Jackob (1 December 2007)

*Pch and Portfolio*,

Thank you both for your comments.


Portfolio said:


> I think the $4,300 figure is the return from the 1996 project (delivered in 2007).  So i suspect the answer to your question is #2 - its bad so they dont want to talk about it.  Not sure where i read that though …




I agree.

I found the 2005/2006 returns (for 1994/1995 growers) at

http://www.great-southern.com.au/default.aspx?MenuID=418

They were both the same of *$5,148/woodlot* (after “propping up”) on an initial investment of *$3,300/woodlot *(including 10% GST) over 11 years.  So the compound returns was both of *~4.1% pa*.

Thus the *$4,300* figure indeed looks like referring to this year’s return on an initial investment of *$3300/woodlot* (not $3,000/woodlot I used - sorry).  The annual return was then a mere *~2.4% pa* (after a likely “propping up”).  This 2007 return is bad, so few insiders want to talk about it and few outsiders would know.

Now let’s assume that the later/future harvests will produce *3.2 times* as much woodchips as the 2005 harvest.  Then they will reach *4.1% pa* return rate, the same as 2005 (in which year the returns were “propped up” by *220%*).  

Now we will have a *47%* increase of application fee from 2008 onwards, the woodchip crops will need to be *(3.2 times)*1.47=4.7 times* as big as the 2005 crop to reach the same *4.1%* return …  but this *4.1% pa* return will still be too hard to attract new growers.

… If we need produce a decent *10% pa* return, then the woodchip harvests need to be raised to *8.6 times *of the 2005 crop…  



Portfolio said:


> ... latest acquisition (ASX announcement dated 05/11/07):
> 
> They bought 14,700 hectares of hardwood plantations for $47.3 million.  And the plantations were established "between 1993 and 2003".




So these lands are worth *$47.3m / 14,700ha = $3,218/ha*, including trees on them and a *50%* ownership of a woodchip mill.  Although these lands are under “_profit a prendres_” with 28 year leases (*14-24* more years left), it still sounds unbelievably cheap!  

Based on these data supplied in the announcement (5/11/2007), I estimated that the true value of the clear freehold lands should be not more than *$3500/ha* or so, which is about only *half* of the *$7000/ha* price GTP used to purchase the “pulpwood” lands.  

Why so cheap?  I suspect this is because of a sudden drop of demand on pulpwood lands by GTP, TIM and other MIS companies in last 12 months or so.  This may be consistent with the earlier complaint in the rural area on the skyrocketing land price due to those MIS buying.  This may also be confirmed by recent independent valuations on ANE’s lands of *~$3000+/ha* (according to my memory only, in ANE’s announcements fighting against GNS’s takeover).

A cheap land price will help to reduce GTP’s CAPEX, but it would cause other serious problems, such as reducing NTA and earnings (land appreciations/depreciations have been already included in earnings).


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## Portfolio (1 December 2007)

Hi Jackob,

From my reading of the announcement they havent bought the land - just the trees on them.  Hence my calculations above.  From the wording "to use for its own resource as well as for use in its managed investments projects" I expect they will just throw the proceeds into the pool to continue "propping up".


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## pch (2 December 2007)

Gents, can you check my math?

Taking into account the $5148 top up return to investors.. and based on the bone dry tonnes price of $180 would mythically yield 28 tonnes per woodlot

5148/180 = 28.6

then

"Gross proceeds (calculated by multiplying the volume produced in cubic metres by the basic density of wood divided by 1,000, adjusted for physical losses), to calculate bone dry tonnes, which is then multiplied by the prevailing woodchip price for the relevant plantation hardwood species"

"Basic density for Eucalyptus globulus at harvest is in the vicinity of 550kg/m3"

28.6 / .55 = 52 m3

Now even before we factor in the fact this is not the 'real' yield, but a mytical yield assuming the top up never needed to take place.

But to my uber untrained eye, even this 52m3 mythical volume seems smallish for a 330 square metre woodlot? 

Now all we need on this forum is some tree husbandry expert that can tell us how much volume you would get out of a big, thick 11 year old Eucalyptus tree.  Rainmaker don't suppose you are a lawyer come tree hugger?


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## Jackob (2 December 2007)

Pch,

Your math is correct except the size of *1 woodlot* is *0.33 ha*, which I reckon should equal to *3,300 m2*, not only *330 m2* (*1 ha = 100m x 100m = 10,000 m2*, am I right?).  So to produce the required *52m3* bone-dry-tonnes woodchips would be even easier.

But the question is that, if the lands could make at least *$5148/woodlot* return in each *11-year* rotation, how would they be leased out at only *$3218/ha*, or *$1073/lot*, on *28 year *contracts (*~18 years* on average still left) including *~5-years-old* trees already planted on them.  Wouldn’t the sellers all be mad?

No.  My judgement would be that those lands leased out for *~18 years* at only *$1073/lot* could never produce *$5148/lot* in one round of *11* years.  They could only make *~$1000/lot* at most due to their poor qualities.

Then what to do with them?  Well, I would suggest GTP doing nothing except selling them to growers at *$3000/lot* immediately and get *~$2550/lot* cash after deducting *~15%* commissions.  Then put the *$2550/lot* directly into banks to reduce debts with *10+%* pa interests.  Thus in 11 years this *~2550/lot *money would become *$7275+/lot*, from which after paying growers *$5148/lot*, the *$7275/lot  - $5148/lot  = $2027/lot* left would become GTP’s real profit.  

Isn’t it good?  Can’t it be called “*Maximum cash flow at Minimum/zero cost*” or “*Doing nothing is better than doing anything - Stupid!*”  Hahaha!


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## pch (2 December 2007)

duh pch bad maths srikes again!, but yes you are right if I'm whinging about volume 52m3 derived from 330 m2 then i really wonder about 3300 m2 

I don't quite follow your post (you're talking about the most recent aquisition? I haven't even considered that sorry). 

I'm now interested in volume generally, so knowing how much volume you could expect out of a woodlot would help answer the topping up issue as well as the real physical limit to yield per woodlot. 

Its just that I don't think that threes spontaneously got 3 times thicker from 96 to 97, irrespective how good their staff were when they insourced it. But over 10 years? based on my calculation those first 3 years were particularly skinny trees and it *appears* that there is considerable room for increased densities.


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## Jackob (2 December 2007)

Pch, 

I indeed thought you were talking about the acquisition, but you were not!  Sorry for that.

How much woodchips a woodlot can produce is a question which defines whether the growers’ investments are good or not.  Obviously, even a $5148/lot return on a $3300/lot capital in 11 years (4.1% pa), is not good enough for most investors (the problem was that they didn't know it beforehand).

As to the other question of GTP’s own short/medium-term survivability or profitability, it is determined by whether its income, or growers’ application fee ($3000/lot for the pulpwood project) can cover all GTP’s cost (including, commissions and promotions, seedlings, tree husbandry, office overhead, tax, debt interests, and etc).  According to our discussions earlier, the answer was “NO” to the question.  Luckily, this answer has now been confirmed by GTP’s decision last week to increase application fee from $3300/lot (including GST) by a hefty 47% in 2008.

Apparently, GTP *has to put its own survivability ahead of investors’ profitability*.  Survive the company first, then investors' returns would only be possibly shown 11 years later (*who cares?!*).


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## pch (3 December 2007)

Jackob said:


> Apparently, GTP *has to put its own survivability ahead of investors’ profitability*.  Survive the company first, then investors' returns would only be possibly shown 11 years later (*who cares?!*).




Thats precisely what I as heartless nasty shareholder expect them to do!  Did I mention I have never actually invested in their retail products? 

Operational cashflow figures from the last 2 years suggest they have been doing okay managing expenses - compare to Timbercorp. 

I agree with your assesment I think they are now likely leasing, but I wouldn't see them switching to leasing as a failure in strategy as such because they will still greatly benefit from this going forward. Although they will still have a requirement to lease land, much of it will come via rotation which should improve their ROE.

For me, it all comes back to volume per woodlot. Once you know that, you can put the whole propping up issue (and therefore ongoing sustainability) to bed.

Maybe my view of potential volume is somewhat clouded by a 20m high massive lemon scented Eucalyptus I have in my backyard


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## Jackob (4 December 2007)

Judging by the fact that GTP has to raise its pulpwood MIS application fee by a lumpy 47% to increase its “income”, the project must be in a quite difficult financial situation.  

On the other hand, such a dramatically increased upfront fee would have to scare off investors, thus the real intention of GTP might just be to wind up its money losing pulpwood business.


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## Jackob (8 December 2007)

An article in The Age today:

http://business.theage.com.au/agribusiness-tax-policy-the-stuff-of-pure-fantasy/20071207-1fqt.html


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## barnz2k (9 December 2007)

im trying but not following all this very well..
Anyone care to make a simpletons summary of the current situation?
been 4.5 months since it was last at $2.50!  been dipping under $2 recently


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## Rainmaker2000 (9 December 2007)

I can confirm I'm a lawyer, tree hugger and many other things but no botanist..........that article sums it up......Silly government policy made just worse by retaining it.....I saw much of it when I worked in govt.

I appreciate all the sums you guys are doing.......one thing you may consider about land valuation which is key to my investment in TIM........the plantation land is not just for planations....infact as the MIS critics point out, plantations are the least economic and efficient use for the land....if you believe the farmers who have to bid for land against MIS, planation land with its high rain fall and proximity to ports is by definition, the best of the best farm land.....I am thus of the school of thought that the massive inflation of 'hard commodities' is leading to a boom of soft commodities with the large agriculture landowners being the next 'infrastructure players.'..........you may wish to note the current float of 'PrimeAg'

As for the share performance of GTP and TIM, I find the downtrend a little perplexing since the perception now seems to be that the sector will win its MIS case........Dare I say it though, I think TIM has hit bottom as they have pretty much admitted their spending spree is over and now they are just going to let the annuities role in


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## pch (9 December 2007)

barnz2k said:


> im trying but not following all this very well..
> Anyone care to make a simpletons summary of the current situation?
> been 4.5 months since it was last at $2.50!  been dipping under $2 recently




Here's my summary..

If you do the math and do not include tax benefits as Jackob has done, the returns are crap on MIS plantations. The crux of the argument is if you take out the tax benefits, the industry wouldn't stand on its own.

But as an investor in the woodlots, you can claim up an front deduction and then claim additionally claim interest on the remaining (if you borrowed to do it), you can in effect pay less than half the upfont fee. 

This has the effect of increasing the 'return'. 

So critics rightfully argue that if it wasn't for the tax benefits there would be no MIS industry.

But while this has been happening, the MIS companies now own some very good assets, that unlike most assets a company owns, should retain their value going forward. Currently the market has little confidence in these companies because of a variety of reasons, but their share price right now is around or below the value of those assets. 

You have to make a call on how much value these companies can get on these assets later (ie return on equity).


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## Jackob (9 December 2007)

I once read in a newspaper that CEO John Young said that, either with or without tax benefits, the MIS investors within top and zero marginal tax-brackets both enjoy the same return rate.  This is because the distributions to the investors are all taxable at their marginal rates.  In other words, the tax deducted at the beginning of the scheme is only deferred.

(In such situation, the high incomers enjoy effectively zero tax rate as the poorest.  That’s why the schemes are in favour with the rich.)

Thus, if a scheme returns only say 60% of the capital to the investors, both the rich and the poor both get the same 60% of their capital after tax (both lost 40%). 

So a reasonable return rate (say at least +7% p.a.) is vital to all the MIS schemes.


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## Austravel (9 December 2007)

Hi,

Do you know if anyone has worked out the real rate of return from the latest timber plantation harvests for Timbercorp, Gunns etc?

I've tried to track down info but to no avail.  I have a few plots with them and ITC.  Now with hindsight don't believe I should have gotten into them.

Thanks


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## Jackob (10 December 2007)

Hi Austravel,

It looks like no one knows the numbers you asked, or people who know them don’t want to tell you!  

Not a good sign.

My guess is that the “real rate of return from the latest timber plantation harvests for Timbercorp, Gunns etc” will be quite poor, so that the companies and insiders don’t want to talk much.


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## barnz2k (11 December 2007)

PCH - cheers for that!

Seems like even if they do come through strong its going to take a while before this happens. Seems to hold around the $2 mark.. tempting to get a few at $2 to reduce avg buy price and have an earlier sell option in the event of a short rise.


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## Junior (11 December 2007)

Jackob said:


> I once read in a newspaper that CEO John Young said that, either with or without tax benefits, the MIS investors within top and zero marginal tax-brackets both enjoy the same return rate.  This is because the distributions to the investors are all taxable at their marginal rates.  In other words, the tax deducted at the beginning of the scheme is only deferred.
> 
> (In such situation, the high incomers enjoy effectively zero tax rate as the poorest.  That’s why the schemes are in favour with the rich.)
> 
> ...





You need to take into account the time value of money, if you invest your tax savings elsewhere (eg shares) and it returns 10-20%pa, or if you use the savings to pay down your mortgage, then you only need a modest return from your MIS to make it worthwhile.

Also if you're a high income earner at the time of investment but then become retired by the time of harvest that adds to the tax effectiveness.


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## Jackob (11 December 2007)

Junior said:


> ... if you invest your tax savings elsewhere (eg shares) and it returns 10-20%pa, or if you use the savings to pay down your mortgage, then you only need a modest return from your MIS to make it worthwhile.




Hi Junior,

I happened to hear some similar stories of the extra “tax savings” years ago in GTP investment seminars.  Did you get the story at similar occasions, too?

Now let me explain to you the story.

Assume you have $10,000 to invest in a pulpwood scheme.  After tax deduction, you have $4000 back (assume your tax rate =40% for simplicity).  Thus you actually have only invested $6000 in the pulpwood scheme, and you have $4000 “savings”.  

11 years later, you will get a total return say $11,000 from your original pulpwood investment of $10,000, at the same return rate as all other growers, but because all the returns are taxable now, you will get $6,600 after a 40% tax.  This represents a $600 profit, or an annualised return less than 1% pa on your original $6000 investment.  Fair enough!

Now, what will happen to your “saved” $4000?   Well, that $4000 “saved” money I reckon is not real, as you never really get it in your bank account.  

Let’s now have a close look at your bank account with this respect.  First your withdraw $10,000 from it to write a cheque to GTP, and then immediately get a $4000 cheque from the ATO for the TAX deduction.  So at balance, your account is purely reduced by $6000 (not increased by $4000).  At the end of the 11 year period you have the $6600 investment return back to your account, so you have earned $600 with a annual return rate close to 1% - Good luck – and this is the end of the story.   

(But if people all know this result in foresight, why not put their $6000 directly into the share market to earn 10-20% pa in the first place instead of MIS?  - This is one main reason I reckon why the MIS sales have to shrink year by year.)


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## Junior (11 December 2007)

Jackob said:


> Hi Junior,
> 
> I happened to hear some similar stories of the extra “tax savings” years ago in GTP investment seminars.  Did you get the story at similar occasions, too?
> 
> ...




I understand the situation you're explaining.  I am assuming that you borrow the initial amount, therefore you do have the $4k to invest.  I'm also assuming a better return than 1%.  That's why you have to DYOR when deciding which scheme to invest in.


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## Jackob (11 December 2007)

I reckon no matter whether the money is borrowed or not borrowed, if you invest in 3 GTP woodlots (1 ha) with a nominal $10K, you actually only paid $6K and get returns from this 6K, not from the $10K (after tax).

A common mistake is that people don’t know their distributions are all taxable, ie, they are misled to believe the first $10K of their distributions will be tax-free, so they think they have got $4000 extra free money.


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## Portfolio (11 December 2007)

Junior is partially right - MIS can work as a strategy in some situations - even if the client never gets $1 back.  Heres how:

Take an aggressive property developer.  These guys typically - leverage any equity they have very aggresively (90% LVR) and believe they can earn a high rate of return on their equity through developments.

Now lets say a property developer does a development and makes $1,000,000 profit.  Assume this is in a company structure the developer has 2 options.  Either

Option 1. Pay the tax ($300,000) OR
Option 2.  Invest $1million into MIS with a $1million loan from the provider (GTP does offer this)  The developer can pay GTP interest only for the first few years (say 3 years).

Therefore:  

Option 1. -$300,000
Option 2. $0

The client can therefore use this extra $300,000 cash and borrow against it at 90% lvr to invest in another $3,000,000 investment.  If the developer can turn this project around in 3 years (turning the $3million into $5million) the extra $300,000 in the clients pocket has effectively made them this extra $2million.  The fact that they lose $1million on the Agri (assuming $0 return) is irrelevant.  They are still $1million better off.  All they have had to do is pay GTP 10% pa on the loan ($100,000pa which is tax deductible so $70,000pa. after tax).

HOWEVER while this works for some clients and is very lucrative for the planners that understand this the majority of investments are not sold under this strategy.  I suspect most financial planners expect unrealist returns.

Hope this helps.


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## Jackob (14 December 2007)

Hi Portfolio, 

I might be wrong, but your example still looks familiar to me.  It still sounds like from a GTP promotion pamphlet. 

Your example highlighted how a property developer could utilize the $300,000 tax return (30% on the $1,000,000 MIS investment) by gearing it up 10 times to $3,000,000 and make money on that $3,000,000 at a very high return rate for 3 years.  Thus in this example, if the person could make any money, it was largely because his 10 times gearing strategy in a highly profitable investment, which was nothing to do with MIS at all.

Also in this hypothetical example, the real cash available for gearing should not be $300,000, but should only be $200,000, as $100,000 (10% on the $1M) were needed for GTP loan deposit.  

The most strange thing of all was that, if the investor had got $1M pre-tax profit, why should he has to invest in MIS to get $300K tax return and then to gear up?  Why shouldn't he directly gear up the $700K profit (after 30% tax) to $7m to earn much more money at a lower risk?


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## Portfolio (15 December 2007)

Hi Jackob,

Unlikely its off any pamplet as from my observations 99.9% of planners sell MIS expecting a commercial return which both you and I agree will not come.

1. Your 100% right.  The advantage comes from gearing the property project at lower interest rates however for property developers that i know getting the equity (which as illustrated you can do through MIS) is always a problem.

2. Your not right on the @200k front though.  They can be 100% borrowed. You might be referring to having to pay the GST but this immediately (next BAS) claimed straight back from the ATO therefore the client is still $300k cash-flow better off.

3. On the last point you are right.  They do use the $700k profit to re-invest but as i said above these types constantly re-invest all sales proceeds into the next development forgetting about the tax they have had to pay.  

So what i am basically saying is - I agree that anyone that invest expecting a commerical return is kidding themselves BUT GTP get sales through the structure of MIS.  The same scenario above could be used for share traders / future traders that might expect a high rate of return. 

Remembering that if it is done inside a company and the developer loses it all on the next project they will probably default on the GTP loan.  However through the wonderful world of securitisation most of these loans are  "packaged up" and sold to the unknown debt buyer (they are not on GTP's books).


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## The Captain (18 December 2007)

The Captain said:


> I think we are going to see below the $2. My target is $1.80 where I think it will have to be re-assessed. The weekly chart shows Elliot Wave and it is looking towards this level of $1.80 beore we see a retracement to the $3 previous levels. It shows that the wave 5 ($1.80) may come in around 26th November. Remember these are my own thoughts and you should do you own research.




Well my timing was out but my target of $1.80 has now just about to be reached and broken. Where will the price of this stock go now? Both Weekly and daily charts look like heading south. Daily showing a strong trend now starting to push this one lower. Weekly chart also beginning to agree. Maybe its all that positive talk about this stock from Jackob (LOL). I cant see this share price rising any time soon. But like others mine is just an opinion and you should not take it as a recommendation to buy or sell this stock. Do your own research.


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## barnz2k (18 December 2007)

shyt. what a drop.
been busy and couldnt check it. firmly below $2 now.. 
what to do what to do.....


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## Jackob (18 December 2007)

The Captain said:


> ... Maybe its all that positive talk about this stock from Jackob (LOL). ...




The Captain,

Thank you for your compliments, but I don't think I would have such a power.  LOL.

Agree that GTP won't come back any time soon.


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## pch (19 December 2007)

More info on the 1996 harvest

http://gscentral.great-southern.com...=document&ID=71415&ObjectType=3&ObjectID=8587

Key points:

$4102.08 return per woodlot below expectation
prospectus volume 250m3, actual 197m3 (20% below)
expenses $50 per tonne above forecast
5.5% managagement fee waived from final result
woodchip price below inflation (1.4% vs 2.6%)

I know there will still provisions in place for propping up the 96 project but waiving the management fee is just another way of doing provisions. (I forget how much though).

I wonder if they think that from 97 onwards dropping the management fee will give them enough room to avoid the prop ups?

So, hows about those GTP managed funds then!


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## Rainmaker2000 (19 December 2007)

I must say, it was with particular amusement that I read your attachment on the recent 96 harvest and I think of how brave The Captain was, who has been the only participant on the thread for a while to subject himself to the devils advocate position on this company.......

I was shocked when I first took an intensive look at GTP about one year ago, that so much of their business comes from repeat 'customers', amazingly this includes current management.......they really are believers...

You can see why the Mums and Dads continue to be shystered.....after I read this attachment, I get the feeling that GTP is about to save the world or something and you can make a contribution too....

Unfortunately, there are just moments when the bull**** creeps through the marketing........for example, "to provide an improved outcome for  
growers the Board of Great Southern contributed to the 1996 project to the equivalent of raising yeilds to the initially targeted level of 250 m ³/ha."  

In other words, your project failed and we are propping it up so you go with us again.......oh and by the way, we are waving our management fee and giving you 10% off..hehehe..........Would you buy from such a desperate sales person?


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## Junior (20 December 2007)

They're not all bad:

_FEA Plantations is scheduled to distribute the final harvest dividend for its inaugural 1993 forestry managed investment project1 in May 2008.

Current forecasts indicate the Project will deliver a pre-tax return of 12.4% per annum and an after-tax return of approximately 7.5% per annum to grower investors2.

When the thinning and estimated clearfall harvest proceeds are discounted back to 1993 dollars, the total anticipated return is approximately 50% higher than original 1993 dollar Prospectus estimates based on the assumptions of a yield of 375 tonnes per hectare at age 15 years and a selling price of $20 per tonne._


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## Aussiejeff (21 December 2007)

Todays Annual Report had very negative overtones in the first three paragraphs.... lots of "challenging", "disappointment" etc. Followed by the even worse news that GTP had a massive 47% drop in net profit before tax (down from $133 Million last year to only $71.5 Million this year).

That can't be good for the share price today. I'm glad I got out at $4.55, many moons back when they first announce they were "diversifying" into cattle and grapes. At the time of the announcement I thought that was the stupidest thing they could do and immdiately sold off my holdings. Phew....

I guess all shareholders can do now is pray for heavy rain over the coming 12 months. Best of luck.


AJ


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## Rainmaker2000 (21 December 2007)

I sure know where you are coming from AussieJeff and I can't say for sure, but $4.55 is looking like a reasonable exit point at the moment!!!......just from memory was that around the price GTP was offering a share purchase plan to its loyal flock....you got to love a company which shows its own shareholders a lot fo respect.....

Funny thing, I thought the cattle and grapes was a dicey move initially, but in retrospect the move into cattle has been the most lucrative thing GTP has ever done........of course except for the upcoming change of legislation.........I'm still of the view there is value in this sector mainly for its finite assets but it is more than testing the patience


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## pch (22 December 2007)

Interesting listening to his boardroom radio interview and this quote in the annual

"From a cash flow perspective we believe the new pulpwood forestry project will deliver significant cash flow benefits from the end of 2007/08 onwards as land acquired for the project is on sold to investors."

Would this be the source of the big fee increase? Seems to me that while this will impact the balance sheet, it is actually not a bad move going forward because it adds an extra dimension to MIS returns that makes it easier to market.

comments? Anyone know exactly how it works?


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## BuyandHold (24 December 2007)

I'm intrigued by the focus on the returns from GTP MIS projects.

Now of course some investor return is required in order for GTP to prosper. However ultimately the returns to GTP investors (as opposed to MIS investors) depend upon the ability of GTP to sell its MIS and funds to investors. 
Hedge funds, banks, insurers and virtually the entire financial sectors have ripped off their customers at various times and to varying degrees in recent times. Particularly hedge funds, charging absurd annual fees and performance fees in the 20 - 25% region. GTP offers a pretty decent product in comparison to some of the rubbish offered in recent times (e.g. Fincorp, Basis, Absolute, Grange, Westpoint and now even LPT's of late).


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## pch (24 December 2007)

It's partially academic I agree, but it is worth analysing nontheless. Now though that we have had returns for 3 years, whether the MIS marketing machine can as easily convince a new generation of investors to part with their money is an interesting question.


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## Rainmaker2000 (24 December 2007)

I have to agree that Mums and Dads will keep buying as long as the advisors are paid so much to sell them!!!

But it is for good reason we focus so much on investor returns for MIS products.

a)  If the investors don't make a return, these MIS companies will prop them up with shareholder funds..like GTP and TIM is not passing on all water liability this year......they obviously know how important the returns are

b) If MIS does not exist, these businesses themselves then need to use their assets to make returns for themselves, not their investors.......so it actually makes good sense to have real assets making real returns

I hold a position in TIM precisely because I think the assets have a sound future outside MIS


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## pch (26 December 2007)

Hmm, Australia looks set for another big score in the cricket.. 

anyhoo

I have a mate who's a financial planner (don't hold it against him) and he told me some time back that GTP's timber stuff was one of the most 'expensive' on the market. But he did go on to say that he felt their cattle stuff was actually pretty good. For all of our talk on the forestry, I must confess I've not delved anywhere near as much into the cattle project.

In relation to your comment on assets, I no longer hold TIM (and at present anyway, do not regret it , but as mentioned before I do like the fact that all of these companies buy appreciative assets that are not intangible. It's a nice combo. But if you are talking specifically about assets that have potential outside of MIS, how does the cattle projects compare?

Another project that we need to look into this year is the high value timber project. From an MIS point of view, that one takes much longer than the 10-11 years of the Blue-Gum. They closed oversubscribed didn't they? With a longer time-frame, combined with the 'certainty' of the up-front tax deductability, how much of a growth area is this? I mean, by the time we are all in a position to analyse returns some of us may be retired!


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## barnz2k (4 January 2008)

CBA ceasing to be a substantial holder!

http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00800171CBA

This cant be good


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## treefrog (4 January 2008)

I'd guess the forecasts have something to do with the slide

recently has dropped below 4yr low and strong LT support/resistance of $1:90

     2007 2008 2009 2010 
EPS 16.5 18.0 19.9 17.6 
DPS 9.6 13.5 12.0 0.0


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## Jackob (4 February 2008)

I found an actual *profit warning* hidden in its 2007 Annual Report.

"Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)

This warning is so cunningly hidden in an extremely lengthy sentence that I bet not many people would find it.

Take care.


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## Nicks (4 February 2008)

Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.


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## treefrog (4 February 2008)

this info from comsec site:

FORECAST EARNINGS TREND
Have the analysts been upgrading or downgrading their forecasts over the last 3 months?


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## Jackob (4 February 2008)

Nicks said:


> Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.




No, what they said about dividend was "Dividends in the coming year ... will not necessarily reduce with the profit reduction.".

I reckon "will not necessarily reduce" should be read as "*will likely reduce*".


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## Jackob (4 February 2008)

treefrog said:


> this info from comsec site:
> 
> FORECAST EARNINGS TREND
> Have the analysts been upgrading or downgrading their forecasts over the last 3 months?




Treefrog,

Thanks for posting the colourful figure on board.

According the present ComSec "consensus forecast", GTP's 2008 earnings and dividend are all higher than last year's.  Apparently they haven't take GTP's own predictions into account and they will be certainly downgraded sooner or later.

(But as I said that GTP's profit warning was hidden so deep in its lengthy Report that I bet not many people would find it.  Many brokers also might not see it - just wait'n see when they will find out!     )


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## pch (7 February 2008)

That statement is funny, its a really long, complicated way of saying "it may go up, it may go down too", which I also notice people do when TA'ing a chart.

No time to really do much here lately Jackob, but the cynic in me sees the High Value Timber project (and its associated oversubscription) as a stroke of MIS genius. 25 years till you and I can argue about ROI and yield!


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## The Captain (7 February 2008)

In my last post I said that Gtp would break the $2 barrier and head towards $1.80. So where to now?  Selling pressure seems to be fading away and chart is indicating a EW 4 Sell. So my new target for this stock is around $1.50 before this will have to be re-assesed. The EW is not a great one as it does not conform to correct EW properties, however the chart does seem to suggest a lower price around the $1.50 mark.  
Volume has been increasing so we may just see it touch this bottom before a retracement can occur. The market may see that $1.50 is a great buy. The stock recently bounced off the 50 day M.A. and is well below the 200 day. So I am still bearish on this one however a change might be around the corner if it completes the EW 5.

Again these are my own thoughts and you should not take this as a recommendation to buy or sell this stock, you should do your own research. My dog never listens to me, and my wife does the opposite. Oh and thanks to Jackob for ferreting out the bad news for me on this stock in the last annual report. I knew I wouldn't have to read it (LOL) . Cheers and Happy Trading


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## Jackob (9 February 2008)

Hi, The Captain,

Thanks a lot for showing the GTP’s diagram and the next leg of GTP's fall to $1.50.

Regarding GTP’s profit warning, we didn’t have any from GTP last year, but GTP’s earnings per share fell more than half from 41.6c (2006) to 20.7c (2007).  

This year we do have a warning from GTP itself now, so I reckon its e/s reduction had to be worse last year, that is, its e/s should fall more than half from ~20c to 10c or even to 5c.  

In the light of GTP historically having a p/e ratio around 10x, I would predict GTP’s price would accordingly fall to 50c - $1.00.


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## barnz2k (28 February 2008)

new paperprice agreement up 10%. Dunno how positive this is or what it means, how much they sell etc, but

from here



> Great Southern secures new export woodchip price
> 27-February-08 by Edited announcement
> 
> Great Southern Ltd has announced a new price agreement for the sale of hardwood woodchips to Japanese pulp and paper customers for the 2008 calendar year.
> ...


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## pch (28 February 2008)

Taken over the lifetime of a project it adds a around 1% per annum (not adjusted for inflation). It's good obviously as it would reduce further 'propping up' thats been discussed before. Whether its enough to mitigate it totally who knows, you'll only know when the next half yearly is released.

But I'm more interested in whether it would result in bluegum projects being close to or oversubscribed given they restructured them to improve thinning margins. 

I'd say this year there are a lot of people that are going to crystalise tax losses on property stocks, wheras the last few years there have been fat capital gains. So I'm skeptical whether than can do it..

Still, at least the price increase is over CPI for once!


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## snabbu (29 February 2008)

said:


> I found an actual *profit warning* hidden in its 2007 Annual Report.
> 
> "Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)
> 
> ...



I don't think they are trying to bury this, Chairman David Grithifs said something to that effect in the first two minutes of his presentation, which was reittererated by the new MD later in the presentation.
The key points are there is to be no cattle MIS this year so sales will reduce.
There is a timing issue between acquisition of land and sales, the sales being in the last three months of the financial year.
The increased cost of funds.
The reduction in company gearing to 43 percent. (refer no cattle MIS)
There is also a statement by the new MD that he intends to impliment some policies designed to improve long term outlooks that will have a detrimental effect on short term performance.
The thing to watch here is the result of a test case with the ATO and what the Rud government does tax wise in regards to MIS.  I guess we will have to wait for the budget to see that.  What I am hoping is that the short term nervous nellies will sell this down a little more so I can buy lots cheap on the day before budget night then hope like hell for some carbon sequestration tax effective components to be rolled out.

Cheers

Gary


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## Jackob (4 March 2008)

Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!

The poor fundamentals just can't support it at the present price level any more.


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## The Captain (4 March 2008)

Yeh, Target in site, there really is a lot of selling pressure on this stock and I was wondering when it would break. Chart was just about on the money so far.


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## snabbu (5 March 2008)

Jackob said:


> Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!
> 
> The poor fundamentals just can't support it at the present price level any more.




I am looking at a chart on the ASX for this stock verses other diversified financials. It looks to me as if this stock if following the sector as a whole exactly, rather than having any individual problem of it's own.
So perhaps it is a sector thing.

Cheers

Gary


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## Out Too Soon (1 April 2008)

Maybe it's insider trading or April fools day but GTP has leapt to $1.70 today on seemingly no news. Should I ditch what I hold now or wait for an announcement that may shed light.


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## Out Too Soon (1 April 2008)

This should be todays GTP chart, bear with me & I'll add 100 characters (who said a picture is worth a thousand words, Joe?)


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## Jackob (2 April 2008)

It looks not like a short journey at all since you said in your post on 7th-November-2007,

"Nice little break out yesty but the buying volume looks quite thin today.
Now they have a 50% interest in a wood chipping mill I feel I no longer want to be associated with them.
Have to wait for a real up trend to dump them though. Guess patience is the word."

On that day you wrote the above, the GTP price was ~$2.28.  It dropped to as low as $1.36 last week and suddenly came back to $1.74 at today's close. 

I reckon the moment you have been waiting "for a real up trend to dump them" has finally come, if you are still holding them.

I don't think this "up trend" would last long, as GTP has just announced today that its 1H sales dropped from $150m last year to $51m now.


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## Nicks (18 April 2008)

Hi Jackob,

I am just wondering what your position is on GTP? eg. short? CFD?

Fortunately I sold out at 2.19 or something last year, but come back every now and then to see whos still following it.


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## Nicks (28 April 2008)

The silence is deafening! Jakob I have never seen you so quiet on this thread before! Hope to see you respond. Cheers.


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## Jackob (29 April 2008)

Hi Nicks,

Sorry I missed your previous post.

I reckon the situation of GTP is worsening.  More downside risk.

How about Pch and Portfolio's views on it?


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## Portfolio (6 May 2008)

I'm with you - surprising the SP is staying up here.

Does anyone know was has happened with the Palandri Wine MIS investors?  Do they lose their money or does the buyer takeover the management of the MIS for the next x years?


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## Jackob (7 May 2008)

Portfolio said:


> I'm with you - surprising the SP is staying up here.
> 
> Does anyone know was has happened with the Palandri Wine MIS investors?  Do they lose their money or does the buyer takeover the management of the MIS for the next x years?




I didn't even know the name of "Palandri Wine" - first heard from you - sad to hear the news.

As to the question of why the SP is still staying up there, one reason might be that Ospraire is still buying - it seems that those Yankees can never know what's happening to GTP/MIS in Australia.


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## Jackob (11 May 2008)

*Another bad news for GTP and MIS:*
http://www.theage.com.au/news/envir...ry-pay-for-rain/2008/05/10/1210131335198.html



> *Plan to make timber industry pay for rain*
> Melissa Fyfe
> May 11, 2008
> 
> ...


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## brty (13 May 2008)

Hi,

I think tonights budget will have far greater impact on the SP than the water thing.

Nothing at all tonight, means leaving it up to the courts to decide in the test case. A decision is expected around Christmas. This would be short term bullish for GTP.

However if there is something in the budget about MIS, then real game starts tomorrow.

brty


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## Portfolio (13 May 2008)

Keep holding then brty......its only money.

I dont think there will be anything in the budget personally.
Why would there be? Things are progressing nicely.  Maybe next budget if they cant win the court case they would put something in place to stop MIS.


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## barnz2k (13 May 2008)

Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?


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## Jackob (18 May 2008)

barnz2k said:


> Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?




No I am not confident in these guys in long-term either.

In short-term, wait for the HY report in the last week of this month and see any triggers for a price movement.

(I reckon the HY results would most likely be negative.)


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## Jackob (28 May 2008)

http://www.wabusinessnews.com.au/en-story/1/63260/Great-Southern-suffers-49m-loss

*Great Southern suffers $49m loss*
26-May-08 by Mark Beyer

Investment manager Great Southern Ltd has commenced a strategic review of its business after reporting a worse than expected loss of $49.1 million for the half-year to 31 March 2008.

The company has previously foreshadowed that it would incur a loss but a blow-out in provisions for doubtful debts to $37.2 million made the loss larger than anticipated.

The latest result compared with a net profit of $14.9 million in the previous corresponding half-year.

Chief executive Cameron Rhodes said the company has begun a comprehensive strategic review of its business "to provide a more sustainable, transparent and valuable business that can become less susceptible to regulatory forces".


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## barnz2k (1 June 2008)

Dividend is payable early July - maybe some people are holding out for the dividend and then there will be a sell off? I dont chart but seems like July last 2 years was a sell off.
I got lost, has there been a final verdict on the tax advantages yet?

3c Dividend, to me that works out at about $55 (reinvested as shares), so may not be worth holding out for


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## Jackob (5 June 2008)

barnz2k said:


> Dividend is payable early July - maybe some people are holding out for the dividend and then there will be a sell off? I dont chart but seems like July last 2 years was a sell off.
> I got lost, has there been a final verdict on the tax advantages yet?
> 
> 3c Dividend, to me that works out at about $55 (reinvested as shares), so may not be worth holding out for




Barnz2k,

You are right that dividend is payable in July.  However, the ex-dividend date is 16/6, less than 10 days away.  It may cause some buying interest next week.

You are also right that July was usually a sell-off month for GTP in recent years.  This is because on 1/7 GTP always announces its whole year sales number and in recent years the numbers were not very good at all.

In the first half of this year GTP's sales dropped by $99m from $150M to $51M and e/s dropped from 5c to -15c.  In the 2H2008, if GTP could manage to sell as much as 2H2007, then it might be able to earn 15c/share as last year, the e/s of the whole year would be -15c+15c=0c.  This might trigger another July sell-off.


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## barnz2k (5 June 2008)

Thanks Jackob

So does that mean if someone buys the shares and holds only from just before the 16th they are eligible for dividend payment??

And would I/they have to wait till the 17th to actually get the dividend? Im currently on share Reinvestment plan so would need the extra shares to clear  first if I was planning to sell after it


Hope your right with some interest due to the dividend- down another 4%today


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## Jackob (6 June 2008)

barnz2k said:


> Thanks Jackob
> 
> So does that mean if someone buys the shares and holds only from just before the 16th they are eligible for dividend payment??
> 
> And would I/they have to wait till the 17th to actually get the dividend?  ...




Barnz2k,

Sorry that the ex-dividend date should be 12/6 instead of 16/6.

This means that if you sell your shares on 11/6 you won't have the dividend, but if you sell them on 12/6 you can get the divvy.


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## barnz2k (7 June 2008)

thanks for clearing that up. Very interesting.
Potentially selling may start on 12th then.
Although with reinvestment plan selected, even selling all my shares I would be given back a small parcel of shares (which selling would lose half in brokerage) unless I could change that option or it does auto on selling all shares.


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## barnz2k (11 June 2008)

well I was right about the sell off - but it seems to all have happened a day early  12% down in one day. $&%#

Now will this continue to keep sliding or possible rebound.


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## Aussiejeff (27 June 2008)

barnz2k said:


> well I was right about the sell off - but it seems to all have happened a day early  12% down in one day. $&%#
> 
> Now will this continue to keep sliding or possible rebound.




Sliding...... dropped a further 30% in 12 days to low of 69.5c on 25th June. Terrible performance.

Meanwhile, one of the US' biggest agricultural hedge funds - *Ospraie Management LLC* - has been chipping away and bought up almost 20% of GTP's shares.

They had their wings clipped badly in 2006 the last time agricultural and commodity markets tanked a bit. Hopefully for GTP holders, given the shaky outlook at present, Ospraie don't get caught short again and have to sell down that 20% in a hurry. All those eggs in one basket of a US hedgie is a bit of a worry to smaller shareholders?  



AJ
(ex-holder)


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## Julia (27 June 2008)

I was only half listening to the radio news item, but isn't there currently some political discussion about wiping tax benefits for agribusiness?

Might not affect GTP.  Does anyone know?

I haven't been following this company (sold it about three years ago thank goodness) but still curious about why the inexorable downward slide.


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## barnz2k (28 June 2008)

I dont really know a lot about it - I originally bought GTP as a friend suggested it when I was getting into shares - he still holds about double what I do. 

I think GTP used to be attractive because of the tax break - and it has been in discussion a while now about getting rid of the benefist associated - leaving people with little reason left to have interest in GTP.

Not sure what that spike was yesterday up to almost 0.8. But damn, my avg cost (from div shares not buying more) is a bit under $2.80..

ohwell, holiday tomorrow woohooo dont think about my GTP/VBA/BNB nightmares


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## fgwyn (13 July 2008)

barnz2k said:


> Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?




Any advice now they are down below 60c ?  (I bought in at $3.15 - ouch !)
Should I buy more and lower average price ?

Hard to see where this company is going (regardless of 'strategic review')
Any thoughts much appreciated.


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## Seneca60BC (13 July 2008)

Julia said:


> I was only half listening to the radio news item, but isn't there currently some political discussion about wiping tax benefits for agribusiness?
> 
> Might not affect GTP.  Does anyone know?
> 
> I haven't been following this company (sold it about three years ago thank goodness) but still curious about why the inexorable downward slide.




How much did you lose on this one Julia?
. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .


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## Julia (15 July 2008)

Seneca60BC said:


> How much did you lose on this one Julia?
> . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .




I'm not sure why you would assume I lost anything?  I said that I sold out about three years ago.  If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
My entry was at 48c.   So I made a comfortable profit.


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## bunyip (15 July 2008)

Julia said:


> I'm not sure why you would assume I lost anything?  I said that I sold out about three years ago.  If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
> My entry was at 48c.   So I made a comfortable profit.




Crikey Julia........a 'comfortable profit'?? I'd be more inclined to say you made an absolute killing! You rode the uptrend for all it was worth. Best of all, you headed for the exit gate once the party was over. And no doubt you found a profitable home for your former GTP funds by buying another growth stock.
Your modus operandi is a valuable lesson for anyone wanting to extract maximum profits from the market.


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## numbercruncher (15 July 2008)

haha Julia that had me in stitches as well ......

48c to circa $4 is a " comfortable profit " , Id really love to see what cleaning up or even a good profit is


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## bunyip (16 July 2008)

fgwyn said:


> Any advice now they are down below 60c ?  (I bought in at $3.15 - ouch !)
> Should I buy more and lower average price ?
> 
> Hard to see where this company is going (regardless of 'strategic review')
> Any thoughts much appreciated.




I notice that you haven't exactly been inundated with advice as to what you should do in the case of GTP.

Should you buy more? 
I won't try to advise you.....what I'll do instead is tell you about a disgruntled investor who sat beside me at an Options seminar in Brisbane some years ago. 
He told me he lost a six figure sum by investing in Pasminco (PAS). He started off with a modest investment in PAS, but the stock starting going down shortly after he bought. So he bought more. And more. And more. He invested further funds into PAS every time it dropped another 10%
The company went broke and he was wiped out.

Below is an extract from someone whose views I value highly......

_*Don't ever fall into the seductive trap of thinking that by buying more at lower prices, the stock will only have to rally half as much before you can get out even.
Do as the professionals do....average up, not down.
The pros pile on further when the market action proves them right - not when they've been proven wrong. Instead of sitting on a problem stock, they get out promptly.
Learning how to handle a losing position and keeping losses to a minimum  is one of the most important secrets of successful investing.
The averager is thrown off the profitable track when he buys more instead of getting out.
Averaging down can be particularly crippling if you hold a stock that's really being sold off heavily. Every time you average in the hope that you're near the bottom, you simply add more shares and more losses to your portfolio.
The result is that you throw good money after bad. Trying to guess the bottom in a falling stock is like fishing in the ocean with your fingers. Hope is a foolish reason for holding on, but an even worse reason for buying more.*_


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## GreatPig (17 July 2008)

From July 2006 (post #539):



GreatPig said:


> Maybe Split Enz were wrong, and the history of 2000-2001 will repeat - 50 cents here we come!



50 cents - here we are! 

Now who said it couldn't happen? 

GP


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## Julia (17 July 2008)

Great Pig, I can remember back about three years or more ago when the GTP SP slipped below $5.  I was at that stage naively nursing the belief that any drop was only temporary.  Can't now remember what you said, but you picked me up on that suggestion!  How right you were, huh!


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## GreatPig (18 July 2008)

Well even my comment was just that, not a prediction.

I have enough share price history though to see that stocks can go up and down that much, and that almost nothing is impossible given the right circumstances (not that charts show anything about circumstances). That's why it sometimes amuses me to see people making statements along the lines of something-or-rather can never happen.

Late last year on another forum, when BHP was over $40, someone was saying they thought it would never get back to $30. While I didn't really expect it to, I mentioned that I could at least see it getting back to that price if the market dropped enough. It didn't quite get there in January, but came very close ($31).

Bottom line: (almost) nothing is impossible!

GP


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## Jackob (18 July 2008)

GreatPig said:


> From July 2006 (post #539):
> 
> 
> 50 cents - here we are!
> ...






Good on you, GreatPig.

It's indeed interesting to look back at the discussions 2 years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=1284&page=28

At that time I did know GTP would keep falling from $2.50 but I didn't expect it would come to 50c so soon.

Just for fun, may I suggest now that GTP would shrink a further 5 time to 10c in the near future, so that I could also say "Here we are 10c" once it happens?  (I reckon this is a REAL possibility).


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## bunyip (18 July 2008)

Jackob said:


> Good on you, GreatPig.
> 
> It's indeed interesting to look back at the discussions 2 years ago.
> 
> ...




Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?


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## Jackob (18 July 2008)

bunyip said:


> Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?




Bunyip,

It’s hard to say, really.  But just as people often say, anything can happen on earth under the sun.  

My gut feeling is that, frankly, the present GTP’s MIS business model cannot survive.  It has to change, but any change could involve even more risks.

Just for new comers: if you read this “GTP” thread from early days, you can find that in the past ~2 years there have been plenty of warnings on GTP's downfall, which were surprisingly enduring and penetrating.  The present situation has further deteriorated due to the facts we all know.


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## bunyip (18 July 2008)

Jackob said:


> Bunyip,
> 
> It’s hard to say, really.  But just as people often say, anything can happen on earth under the sun.
> 
> ...




There were indeed many warnings on GTP's downfall. But at the same time there were folks who were trying to talk the stock up. One of these characters got quite irate with me for telling people not to buy GTP while it was downtrending.


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## Rainmaker2000 (18 July 2008)

Wow, GTP, a 50 cent company....I have not looked for a while so its a bit of a shock.....my preferred pick was always TIM but then, that's like saying it's better to go down on the front of the titanic than the back

In this market, even perfectly good companies are getting drilled...so special treatment is reserved for these guys...

I don't reckon they are set for oblivion...unless management is especially negligent....keen to hear otherwise.

My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.

At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow


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## Jackob (23 July 2008)

I heard the rumour that "GTP is in the crosshairs of the world's biggest commodities hedge fund ...", but I am amazed.


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## Jackob (27 July 2008)

Rainmaker2000 said:


> ...
> My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.
> 
> At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow




Could GTP “shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off”?

I reckon the answer should be “NO”.  Because GTP can get enough cash flow to survive in this way.

GTP’s NTA (net tangible assets) is officially about $610m, or say $1.90/s (at 30/3/2008).  

Suppose that GTP could sell 1/10 of its assets in the first year, and what it could get would be ($610m*1/10) = $61m. (The 1/10 assumption is lenient, as most of GTP’s lands are for the 11 year woodchip schemes, and the size of them 11 years ago were only a small fraction of the present).  

Now, GTP has debts of ~$700m (at 30/3/2008), which needs interest payment about $70m a year.  In addition, GTP has about $2.5 billion worth MIS projects under control, which need at least 2% of the total value as the maintenance cost, that is $50 m.

So, the total expenditure needed would be at least $70m+$50m=$120m, which is about twice of the $61m NTA sale results.  Plainly, GTP would indeed go oblivion in such a way. 

Thus GTP’s $610m ($1.90/s) “NTA” is only a pie in the sky, which you can never get it.   The problem in GTP’s NTA valuation is that it has hidden its liability for maintenance of the existing MIS schemes and service of existing debts in the future.  I believe if these hidden liabilities were correctly included, the present GTP’s NTA should be negative.


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## Jackob (27 July 2008)

Sorry, but the second paragraph of mine should be read as

*I reckon the answer should be “NO”, because GTP canNOT get enough cash flow to survive in this way.  *


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## Rainmaker2000 (28 July 2008)

Yeh, I certainly agree their NTA is not exactly reliable.......

When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....as I understand they are moving to this model for new MIS projects

I still think there is some value there in the enterprise and they should be able to survive but note that I would not be an investor in GTP at any price


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## Jackob (11 August 2008)

Rainmaker2000 said:


> ....... When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....



Rainmaker,

If GTP “sell off” MIS to the investors only with the land available from rotation (from finished projects) as you suggested, the problem is that the revenue would be too little to let GTP survive.

For example, this year’s total sales were $350m, of which I reckon only a small fraction, about $50m - $100m, might be from re-selling the lands in rotation. Thus, had GTP totally relied on this amount of money, after a deduction of the 20% “commissions and promotion” expenses and servicing $700m of debt, nothing would be left to allow GTP to survive any longer.


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## Portfolio (27 August 2008)

Ouch.  This forum has known for a long time that the MIS projects are near worthless but the restructure lets the whole world know.

1. No MIS investors will take this up (if only because of spite);
2. They have just killed off any future MIS investors by effectively telling them what the projects are actually worth;

I can see the value for GTP if MIS investors took it up but the bottom line is that they just wont.  Very bad strategy.


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## Jackob (29 August 2008)

Yeh, it’s a bad strategy and it won’t work.

Just 3 months ago when the sp was about $1.60 it might work.  But the sp is under $0.60 now – It’s too late.

It’s almost suicidal by showing all MIS projects are rorts and throwing GTP itself into a dead corner …   can’t see how it can move next …  

It looks like a very final gamble for GTP’s survive, but I can’t see how it can win.


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## brty (30 August 2008)

Jackob,

I agree it is a bad strategy, but the holders of millions of shares would see the same thing.

What can the large holders do in this situation??? All I can think of is that they will try to bid up the price over the next month or two, to get it over the $1.10 price and make the strategy semi viable.

What's the alternative?? Watch shares go to zero???

The offer for holders of those tree lots, paid $3300 in 2003, if the shares are only worth $1600, they are worse off than just paying the tax in the first place, and it will kill any future MIS sales.

Only real hope for future viability is a higher share price, probably around the $1.60 level mentioned earlier. 

The real question to me is that this could be a fantastic opportunity to buy now, or management have stuffed up completely. 

I can't believe that management is so stupid to offer such a strategy unless they know of backers (large holders of stock with deep pockets) that will support it.

I do not hold any shares in GTP, but I am thinking about getting some.

brty


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## Jackob (31 August 2008)

Brty,

Of cause some of the large shareholders would like to support the GTP share price, but the problem is how they could possible achieve that.

In the past as we may all know Ospraie was the one with a “deep pocket” to buy up GTP shares, from $3+ a share to begin with and to $0.50 to end up – Ouch! Tens of millions of dollars evaporated into the air and the GTP downward trend was even accelerated.  Now they are having nearly 20% of GTP issued shares and have to stop buying.

Last Tuesday, the day GTP released its “strategic Review”, the supporters again pushed the sp up from ~70c to 95c, but soon they were defeated and the sp dropped to under 60c – even lower than where they started.

The problem is that under such a downward pressure, few major shareholders would continue to support it if they wouldn’t flee either.  From both fundamental and technical view points, the GTP sp downward trend still has a looo...ong way to go.


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## brty (31 August 2008)

Hi Jackob,

In the 4 days since the announcement, there has been ~9m shares traded. Less than ~1m were in the initial push up. There has been over 7m traded between 56c and ~65c. Downward momentum is facing stiff resistance, volume for each cent of downward movement has risen, someone is supporting it/thinks its cheap.

Do you really think this strategy would have gone to market without getting some type of approval from large shareholders??? Maybe the idea came from there??? 

bye


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## The Captain (1 September 2008)

Some time ago, GTP posted a letter to growers asking them two things.
1. If they could sell their woodlot would they and
2. Would they like to be on a list in order for them to sell their interests in a project.
So I would think based on their announcement that they do have a number of growers who will take up their offer.

We must also consider that if GTP aren't doing so well and if you are a grower and consider that GTP aren't doing so well, would you hold out long term or would you take what you can get for your investment and run. 
I think that the offers from GTP are so ridiculousy low for growers given the current share price and the ability to the growers only to get around 60 cents by onselling their shares that there is no way that they would consider it and will wait the further time to at least get their money back.
I do think we may see a further offer from GTP to growers in this area.

Some time ago i bought into GTP for 50 cents and soon after the shares jumped. I was going to write in this forum that I thought GTP shares would now increase based simply on the historical charts of GTP. Every time it hits 50cents the share price improved. If you look back you will see on their charts that there was 3 distinct occasions where this occured and those who bought shares did very well. A current example is Telstra where it hits $4.20 and bounces right back. 
When I bought into GTP the chart was in EW currently on wave 3 down and looked to me to be ready for the up for the wave 4 peak which it has now completed. I sold for a nice little profit. But look out below I think that we may see a new low way under the 50c to 30 or 40 cents which would agree with EW theory. But there is very strong support at 50 cents.
If GTP survives the next few years I think we will see good share prices in this one again, there is a lot going on in MIS at the moment with Carbon credits and the test case just going to court now. 
If there was a sensible offer to growers and the schemes were sold back to GTP not only would GTP begin to look very profitable and with Mr Young's stranglehold on the ownership of GTP gone, GTP becomes a real takeover target. But that is another story.
As usual dont buy or sell shares on my thoughts do your own research. Cheers and happy trading.


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## Jackob (2 September 2008)

Hi Brty,

I am just looking at the GTP Charts.  In the first 3 days of trading after the release of the "strategic review", apart from the first half-hour when bulls pushed the price from 86c to 95c with 1m- shares changed hands, the price was pushed down from 95c to 59c with a huge 6m+ turnover.  Thus the downward momentum was apparent.  Today it’s down again to 58c. 

I reckon the "Strategic Review" is just GTP's last gamble to survive, but I can't see how it can win by showing all its MIS program are craps and asking MIS investors to surrender their holdings with half of value they originally put in.


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## brty (19 September 2008)

This stock now looks toast.

Falling below 50 cents is disastrous for the holders of mis units. Plus there is no incentive for anyone to take up new mis schemes.

The value of a timberlot, original cost ~what $3300 less the tax benefit of $1600 is now ~$300?.

I cannot see how this can end positively for holders of the timberlots or shareholders.

My only 'interest' in this company is that it was my pick in the september competition, where I stated it would either double or was toast.

I like just a little bit of butter and lots of apricot jam.

brty


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## Jackob (21 September 2008)

Hi Brty,

We mustn't over-estimate the intelligence of the GTP management.

Had they enough intelligence, they would never ever have such a "strategic Review", then allow its share price drop to a low of under 30c and make themselves an absolute joke in the first place.


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## irenebrisbane (13 November 2008)

Has anybody as a grower or investor in GTP on this forum been approached by GTP with a proposal to surrender all woodlots in return for shares in Great Southern.  Our woodlots go back to 1998 and 1999 and are due for harvest.  With the current share price for GTP it is not an attractive proposition at all.  GTP or GSL are very keen to have this scheme passed.  Does anybody else have knowledge of this?  I have read the explanatory memorandum and it seems to me that we would be disadvantaged by agreeing to the proposal.  Any comments would be appreciated.


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## drsmith (13 November 2008)

While this is not a stock I have followed for some time I did invest in GTP shares several years ago for a substantial profit. 

At that time I felt investment in the wood lots themselves represented a poor return on investment with the main theme being tax incentives. On this I assume nothing has changed. Tax minimisation is in essence taxable income minimisation which in the present economic environment wage earners are less able to engage in. I assume GTP's revenue is suffering on this front or that it will.

With regard to exchanging woodlots for shares the question that comes to my mind is that if the management company needs capital, do a capital raising like other companies have done. The most likely answer is that they can't so the next option is to raid timber lot holders for the capital needed to keep the management company solvent. At the very least it's a transfer of share market risk to the lot holders.

In short, don't do it.


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## irenebrisbane (13 November 2008)

Thank you, drSmith for your invaluable comments.  What you have said reinforces our feelings on the proposal.  Since posting on this site I have heard from another GSP grower and he is emphatic that he will vote no.  He has also managed to get hold (obviously) of the names and addresses of some if not all of the other growers so hopefully there will be enough of us to cut this scheme off at the knees otherwise we will be landed with shares that will most likely be almost valueless and the loss would be even greater.  My sentiments exactly that they need capital badly and are prepared to "do us out of our entitlements" by taking over our woodlots and cashing in on them.  I hope we get something out of all this when this period is over.

Many thanks.


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## doctorj (13 November 2008)

Rest assured, the compliance committee (and auditors) will ensure the value of shares you receive under the deal is equal to or greater the amount of cash you'd receive normally.

You're right - GTP are probably having cash flow issues and see it as a handy way to preserve cash.


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## slim pickins (14 November 2008)

hi eveybody,

i have a substantial interest in the MIS schemes. hundreds of thousans of dollars..... i will be voting NO!

why.... essentially the way i understand it is that GTP would like to acquire MIS schemes worth $438 million for 72% of its share prce which today is worth $73 million.

so would you exchange $438 for $73.... if you would.... i would gladly do business with you 

if GTP succeeds in pulling this off it will be the steal of the century. it will help the existing shareholders but i will lose a packet. there could be a run on the shares as MIS shareholders rush out of it. as if the shares arent low enough already.

please vote no via proxy as soon as possible if you are an MIS investor. i have no idea why they think they can even take this to a vote and force MIS investors to own their shares. there must be a law against it and if this vote succeeds... which i dont think it will i would be happy to start a CLASS ACTION lawsuit against GTP for this scam. if anyone has any questions please send me a message.

in case the this does nto pass and GTP goes bust the owners of the MIS scmeme will still get he benefit from thier forests, as an independent reciever will be appointed to manage it all.

cheers slim


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## slim pickins (14 November 2008)

regarding the company itself.... all i can say is feel sorry for the shareholders. but it was their investment decision. if this buyback is passed i do not see how it will benefit you. the MIS owners will own 72% and your holdings will be severey diluted.

the MIS owners will be left with shares in GTP..... now lets examine this comany in greater detail.... 

its worth $103 million as of today. looking at its annual report... what does it own? 

firstly it owns a lot of debt... $800 million in debt. it has borrowed $800 milion!! they have borrowed $800 mil and they have given a loan of $800 mil to "related parties". i cant see who these related parties are in the annual report. i would love to know if these "related parties" are able to pay this money back.

they have also lent $4 million to one of the directors. thats amazing... i would not mind having a $4 million dollar loan.

the compnay spends $41 dollars on staff wages.... several directors recieve salaries of more then $1 million dollars. 

im sure the company earns money too..... i would love to hear a positive spin on their annual report. the share is in a spiral... i would love to knwo how the market got it so wrong on this one.

the company is worth $100 million it has $800 million in debt which it has to pay. where are its assets..... how much could it get for those assets in the real world?


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## drsmith (14 November 2008)

slim pickins said:


> i have no idea why they think they can even take this to a vote and force MIS investors to own their shares.




That thud was my bottom jaw hitting the floor when I read the following from page 63 of GTP's scheme proposals,



> _*Significant issue of GSL Shares*
> The implementation of each of the Scheme Proposals and the Individual Offers will result in GSL issuing a significant number of GSL Shares
> to project investors, including some project investors who may not have wanted to participate in the Scheme Proposals, but were bound
> to do so under the terms of the Scheme Proposals. Some project investors may not wish to retain the GSL Shares issued to them and may
> ...




Does the original offer document for the MIS (which could be up to 10 years old) specify any circumstanses where Great Southern can forcably convert a a lot holder's equity into shares in the company ?

Also, what does ASIC have to say about this ?
Have any lot holders contacted ASIC and advised them on what is proposed and then asked for their assistance ?


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## slim pickins (14 November 2008)

drsmith said:


> With regard to exchanging woodlots for shares the question that comes to my mind is that if the management company needs capital, do a capital raising like other companies have done. The most likely answer is that they can't so the next option is to raid timber lot holders for the capital needed to keep the management company solvent. At the very least it's a transfer of share market risk to the lot holders.
> 
> In short, don't do it.




excellently articulated. why dont they raise capital .... firstly noone will ned to them. they have $800 million already they need to pay back. they could issue more shares... well the directors own 50 million shares or so amongst them out ouf a possible 317 million. they would not want to dilute it too much. if they raised capital through a share issue the share price would be 10 cents a share.

so the directors were walking along a trail one sunny afternoon and one said..... 
"look at all these trees....... who do they belong to...." 
----"the MIS investrors" says one....... 

"hmmmm well, lets just take them!!! they must be worth $438 milion or so"

-----"yes lets give them $73 million worth of our shares for it. i dont want to hold onto these shares as the markets are sinking into a death spiral anyway"

"a capital idea old sport... a capital idea......do you think it will work?"

------"probably not... but its the only chance we've got, may god help us all"


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## slim pickins (14 November 2008)

drsmith said:


> Does the original offer document for the MIS (which could be up to 10 years old) specify any circumstanses where Great Southern can forcably convert a a lot holder's equity into shares in the company ?
> 
> Also, what does ASIC have to say about this ?
> Have any lot holders contacted ASIC and advised them on what is proposed and then asked for their assistance ?




i dont think so anyone has contacted ASIC, if such a clause existed i would nto have entered intot hsi investment. these are many legal avenues otu of it even if it exists. it might not even be mentioned..... it would create a precdent.... this is indeed a precident.

i wish i could find more MIS owners and lobby them.... i only fear some of the larger MIS owners might have had kickbacks to accept this which of course is illegal.

i do not think poeple can have their assets stripped away from them like ths. spread the word  spread the word.... 

who would have accpeted a clause that allows your investment to be acquired by a company on its own terms. how does a decision by one MIS investor force the other investor to abide by it? it simply cant .. or at least it shouldnt!

think of it as a condo. the management company that looks after the building says... i want your apartment.... the other apartent owners have agreed to transfer their ownership to us... you must too..... rubbish.... that cant work.

this will be a CLASS ACTION if the vote succeeeds. we all kow what will happen to the share price if 15,000 people get shares and try to sell them at once.

this company is doomed. the share price has already factored in the remote possibiliy that the "theft" of MIS schemes will work. but we must nto rest until people are aware of what is happening.


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## drsmith (14 November 2008)

The more I read the worse this is. Consider the following paragraph from the independent taxation opinion that forms annexure 2. 



> *2.2 Disposal of a Grower’s interests in the Project
> 2.2.1 Grower’s interest in standing timber*
> A Grower will be taken to have disposed of their interest in the standing timber as a result of the Scheme Proposal. Pursuant to section 70-90 of the Income Tax Assessment Act 1997 (the 1997 Act), a Grower’s sale of standing timber to GSPH will be deemed to be a sale of trading stock outside the ordinary course of a Grower’s business. On this basis, a Grower will be required to include the market value of the standing timber in their assessable income in the year ending 30 June 2009.



While there's some complexity in the detail and examples below this statement, the bottom line is that the conversion of wood lot equity into shares will result in an income tax liability for the 2008/09 financial year at the individual investor's marginal rate. For MIS investors whose timber is harvested post 2008/09 this would represent a bringing forward of a tax liability from harvest to the 2008/09 financial year. That's a potentially nasty sting in the tail.

Out of curiosity I contacted Great Southern this morning and was advised that the offer document for this was approved by ASIC. If I was a MIS investor I would still contact ASIC to discuss the above details and seek further advice.

I also briefly looked at an offer document for a recent project and under the long list of risks I saw no reference to forced conversion of LIS wood lot equity into shares in the parent company. The financial position of the parent entity was however listed as a risk. Perhaps someone from a legal background with an interest in this might be able to comment further.


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## Guff (14 November 2008)

The bottom line question is what should MIS investors do.

If you boil it down, I can accept a loss -- investments sometimes lose money.  I attended the infomation session held by Great Southern in Melbourne yesterday and it was a farce!  They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.

That is the crux of what people need to decide.

1. Let GSL sweat it out and die if necessary, reject the offer.  

For the MIS investor we'll call in the bank guarantee and have a new manager for the MIS.  What are the details of this bank guarantee? that's the important question there.

Again I can handle a higher cost and even price gouge, because the alternative is....

2. Accept the offer and get reamed for any of those investments converted to shares by GSL

Lets face it, the shares need to be 50 cents to get your money back, they are currently at 33 cents, and if the offer went ahead they would probably drop to 10 cents as people seek to dump their newly aquired stock.


If I had investments in pre 2004 projects only, I wouldn't accept -- but having investments in 2004 2005 2006 makes a difference.  ie GSL may survive long enough for us to collect on the other projects.

Perhaps the key is to accept GSL may need to fail, lets face it -- they were relying on future MIS sales to fund their obligation of all previous MIS projects, so it may not be sustainable anyway and they just fold in 3-4 years time...again not long enough for investors to collect on 2004 projects.

Does anyone know the details of the bank guarantee that would appoint a new manager??


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## drsmith (14 November 2008)

Guff said:


> They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.



Who was first to comment about what happens if Great Southern goes under, a MIS investor or GSL itself ?


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## slim pickins (15 November 2008)

Guff said:


> They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.
> 
> Lets face it, the shares need to be 50 cents to get your money back, they are currently at 33 cents, and if the offer went ahead they would probably drop to 10 cents as people seek to dump their newly aquired stock.




to get your money back by my calculations the stock needs to be $1. i dont know how you see that 50c will get your money back. well mine is 2002 and 2003. plus its been growng for 6 years or so... surely it is worth more now. i mean even f you put that amount of money in the bank you would have earned interest. so to get a decent return the price needs to be $2+

unfortunately the price seems to be going down. and will probably continue to do so.

let them go bust i say. someone else will take their place. there is no bigger eye gouge then these people anyway.giving these people our trees will not save them. it will just prolong their agny and they will take us down with them.


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## Guff (15 November 2008)

drsmith said:


> Who was first to comment about what happens if Great Southern goes under, a MIS investor or GSL itself ?




I believe it was an MIS investor.  It may be best that GSL risks insolvency, and goes under if necessary - I just cannot see the share price recovering, even in the "new Great Southern" as they claim it will become.  It may not be a going concern, and there are likely to be major floors in their business model logic.

There has got to be a fair management fee for the MIS's, so can GSL provide that or are we kidding ourselves and the whole thing was doomed from the beginning?

As for the 50c, that is the "experts report" and offer floor for the calc of the quantum of shares to be exchanged.


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## Grumpy Old Man (15 November 2008)

I seem to remember a company advertising to buy secondary market MIS woodlots in the Fin Review last year.  Does anyone recall who they were or what details?


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## drsmith (15 November 2008)

Guff said:


> I believe it was an MIS investor.  It may be best that GSL risks insolvency, and goes under if necessary - I just cannot see the share price recovering, even in the "new Great Southern" as they claim it will become.  It may not be a going concern, and there are likely to be major floors in their business model logic.
> 
> There has got to be a fair management fee for the MIS's, so can GSL provide that or are we kidding ourselves and the whole thing was doomed from the beginning?
> 
> As for the 50c, that is the "experts report" and offer floor for the calc of the quantum of shares to be exchanged.



GSL's response to the MIS investor's query on insolvency suggests to me that GSL is trying to influence MIS investors by fear rather than rational investment argument. That speaks for itself.

I'm still trying to come to terms with how this has got past ASIC. Perhaps it was seen as being similar to property development companies merging their trusts into a single entity as Westfield did several years ago and other property groups have done since. To me the change in the nature of the MIS investors is much more fundamental and perhaps similar to a bank proposing a conversion of depositors funds into shares in the bank. If ASIC approved that under GSL's terms there would be rioting in the streets (or at least a run on the bank).

If this gets up for any of GSL's MIS's, the ultimate fallout could be very ugly. Not only could MIS investors end up with shares which are worthless (or close to it), income tax liabilities will be brought forward from harvest to the 2008/09 financial year. While selling the newly aquired shares (even for a token amount) would realise a capital loss this can only be realised against other capital gains and not income. It's a double whammy for MIS investors, particurally for those who have invested in the MIS's over multiple years and built up a large investment. The fact that the proposed arrangement brings forward tax liabilities without a garantee of sufficient income to offset this against is a clear demonstration that GSL is not acting in the interests of MIS investors.

I can't comment on the bank garantees for the MIS investors if GSL goes belly up as I know nothing about them. The key question here is whether the MIS investments are more secure as tree trunks or in the hands of GSL's management and board. The tax consequences as noted above are also a critical factor. Annexure 2 of the offer document is critical reading for all MIS investors.


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## Guff (17 November 2008)

Grumpy Old Man said:


> I seem to remember a company advertising to buy secondary market MIS woodlots in the Fin Review last year.  Does anyone recall who they were or what details?




wrt this I belive the govt/ATO approved secondary trading after a period of four years, this was also mentioned at the GSL investor information sessions -- do you know anyone that would purchase projects right now?


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## slim pickins (17 November 2008)

I have just talked to my lawyer, and i am trying to organise a court injunction to prevent this vote taking place next month. 

in case the injunction is unsussessful, i suggest any investor in MIS that is unhappy with this arrangement contact me to organise a massive damages claim against the company.

i think there might be an action in tort law against GTP. they owed a duty of care to the MIS investors and their actions resulted in our loss.... or will result in our loss.

the aftermaket purchase of woodlots does exist it seems. they are probably being bought up by subsidiaries of GTP in order to influence the vote. that could be their ace up their sleve.

the analogy of a bank forcing deposit holders to convert deposits into shares seems pretty accurate. totally absurd. i cant belive the press hasnt got a hold of this.

to people planning to vote.....  if our trees get converted into these worthless shares noone will ever buy another woodlot again and this company will be gone very very soon. 

P.S. anyone that wants to buy my woodlots is welcome to do so. any information on any company that wants them would be greatly appreciated. 

please Prvate message me if you are interested in joining me in lodging a court injunction.


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## drsmith (17 November 2008)

Further to my comments above on tax I note note that there is no confirmation from the ATO about the tax consequences for MIS holders in relation to this scheme.

This is clear from the reading of section 2.1 from annexure 2 of the explanatory memorandum (2003 plantation).


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## Grumpy Old Man (17 November 2008)

Given that the export price for blue gum chip (according to ITC/GTP/TIM) is so high at the moment, I can only imagine that there must be a heap of competition in Western Australia (and elsewhere) for the trees.  Hence GTP wishing to trade shares for them.  Are there options in the PDS for investors to individually market woodlots?  Should look into this.  

Find it hard to imagine that there is no other option but to trade them for 2/3 of a dead duck.


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## bv2726 (18 November 2008)

I also went to the presentation meeting last week in Melbourne held by the GTP management.

I learnt a lot. A lot about the arrogance of the directors, and the anger that exists amongst investors towards this "pseudo-captial-raising".

The deputy CEO (I think) summed it up when he said (in response to some angry questions) something like "look, may I remind you that we do not have to be here, there is no legal obligation for us to turn up"

The crowd roared with sarcasm. It was the deputy CEO saying that us peasants should be pleased that we even got to see him. 

I am going to vote no.


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## prawn_86 (18 November 2008)

bv2726 said:


> I also went to the presentation meeting last week in Melbourne held by the GTP management.
> 
> I learnt a lot. A lot about the arrogance of the directors, and the anger that exists amongst investors towards this "pseudo-captial-raising".
> 
> ...




This is the problem with corporate Australia. Its all a big boys club, with heaps of people sitting on multiple boards. 

And instos tend to hold the majority of companies, so then the cycle is complete with everyone just taking the small shareholders for a ride.

Shame nothing can be done about it...


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## slim pickins (18 November 2008)

"a sarcastic roar" in melbourne..... hmmmm.. not bad. a riot would have been better.

its so hard to coordinate my efforts against GTP because I am in london right now, otherwise i would lobby and go to the press. and that gives me an idea... if there is anyone concerned about this enough to go to the press may i suggest this is the time to do so.

i am sure some publications will pay for such a story especially someone who would be hard hit by a capital gains tax bill this year, or some other hardship.

of course the scheme should not be presented as a tax write off.. rather an honest investment made in order to diversify and support australia's primary industry. 

the good news is that the share price seems to be sinking, 30c as i write, which makes it plainly obvious what the MIS investors will get if they agree to this robbery.

anyone that wants the shares can just buy them on the ASX.... get 'em while the're hot  no need to sell your trees. in my humble opinion trees will just continue to increse in price especially since most of the western world is in the grips of the environmentalists. anone using non-plantaion wood will be crucified... just like the whale hunters.

keep your trees they are very valuable. if you want GTP stock buy it seperately


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## Forenth (19 November 2008)

Slim, I agree with you whole heartedly. I am willing to join in any class action against GTP regarding this ripoff. I have contacted the tv networks to see if they'll do a story and spread the word of this sham, and I've lodged a complaint with ASIC as well. I encourage everyone else to do it, you can do it online at ASIC's website. GTP are relying on the fact that we don't know who each other are or can discuss it to get this through.

I received a notice from the company this week telling me I can expect a return of over $3100 / woodlot on my investment when it matures. WHAT! Don't they know they're trying to steal it? Bizarre. Plus they only valued them at $2600 for the purpose of the scheme so its an admitted ripoff now even without the share price factored in.

I'm attending the Albury meeting of investors tonight. I'll let you all know how it goes and I'll spread the word about ASIC and any class action. Anyone attending other meetings should also do so. Get investors details and let's make a list... we can't wait too long.

If we are FORCED to become shareholders then collectively we'll be the majority. First shareholder meeting we vote to sack all unnecessary personnel, including directors, and also from that moment that all directors remuneration, payouts, bonuses etc be paid in the form of GTP shares at 60% above market value. If they say its a fair deal for us then its a fair deal for them.

Lastly, if they do this then who would ever invest with them again, knowing that they have a history of seizing the investment for rubbish shares. This will absolutely be the start of the end for GTP, if it hasn't already started.

In my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation". So each grower invests as an individual and is not bound by the decisions of other growers. Majority votes can't be taken for anything but early termination of the project, which is written as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This seems to be a breach of contract.

In 2000 they listed 600 000 shares in the company. A director then and now, a Mr Young, now has almost 50 000 000 shares. At least someone's been making money while our investments have been failing.


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## drsmith (19 November 2008)

Forenth said:


> In my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation". So each grower invests as an individual and is not bound by the decisions of other growers. Majority votes can't be taken for anything but early termination of the project, which is written as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This seems to be a breach of contract.



If that statement's in one, it's most likely in all of them.

Check your original prospectusus folks.


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## bv2726 (20 November 2008)

Forenth said:


> I'm attending the Albury meeting of investors tonight. I'll let you all know how it goes and I'll spread the word about ASIC and any class action. Anyone attending other meetings should also do so. Get investors details and let's make a list... we can't wait too long.





I hope you are successful. At the Melbourne meeting, there was some real venom put forward by a couple of financial advisors (venom towards the directors). One or two stood up, had loads of questions, threatened (and promised) to go to ASIC, and also offered to leave his name with anyone who wanted it.


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## Forenth (20 November 2008)

Yesterday I attended the Albury meeting of investors and the directors have learned their lesson from the previous meetings in capital cities where they were harangued.

Tim Jess, Cameron Rhodes and Natalie Roe (?) spent 90 minutes going over the figures, making sure that the audience, who were more retirees than not, were still confused. They introduced a break before the Q & A so that these confused investors could head home and not hear the questions that those who remained were asking and so gain an insight into what are the real concerns that everyone should be worried about. There were still some angry people in the room.

The directors then cut off Q & A after only 6 or 7 questions, they didn't like the direction the questions were going, ie. how can you expect us to allow you to rip us off. You might be increasing revenue from 5.5% to 100% of woodchip sales but we're taking a big loss for you to do that.

The directors presented figures and graphs showing that while the assets of the company would increase, the assets per share should in fact halve with this scheme. They tried to argue that because the share price is under this level then it will go up. If the share price has been sliding for years independently of the current assets per share, then halving the assets per share is NOT going to help the share price, and they said they would not guarantee that it would, but kept arguing that it COULD. And any benefit to ever appear to investors requires that share price to increase a lot!

This dumps a huge risk on investors while the company gets a definite 18 times increase in revenue. We investors currently have hundreds of millions of dollars in investments physically on the ground right now, some coming ready to harvest. They want to take that from us and give us the huge risk that the share price has to almost double from its current level just to get us back to where we are right now. Also we would be hit with an extra tax bill this financial year, something no one has planned for, especially retirees.

The whole presentation argued that the share price should go up to the 73 - 91 cent range from yesterday's close of $0.30 if the scheme goes ahead. I asked if they would guarantee the price and of course they said 'no way'. The price has been falling for 3 ½ years and shows no sign of improving, especially after the ATO ruled against new investments being tax deductible. When assets per share are diluted then why would the market increase its confidence in the share?

Like everyone I plan to implement measures to reduce my tax in the year my investment comes due. Overall, I have calculated that my after tax investment value goes from $2638 / investment to $1487 of shares which are still falling in price, plus a tax bill of $446 if I can't minimise tax in time. Multiply this by your number of woodlots and OMG. This is using Great Southern's own figures. Using my own figures its worse.

This is an attempt to take hundreds of millions of dollars out of investors' pockets, and as mentioned earlier a large number are retirees who were relying on this income to mature year after year and keep them solvent through their retirement. I'm in my early 40's and until now was thinking of my own investment as the beginning of a retirement nest egg. I wasn't planning on it being decimated just as it was coming due.

Most of the votes will be cast by the middle of next week as Great Southern is pushing this vote through by the end of this month. This gives investors only a couple of weeks to work their way through the 191 pages of financial blurb that was sent to them. At the very least one could argue when this much money, especially retirement monies, are involved a longer timeframe should have been given to allow for analysis.

There is currently enough confusion among investors for a yes vote to meander its way through. I have also contacted the media again. If the vote goes yes and you're unhappy, leave your details at greatsouthernripoff@hotmail.com. If you want to join any class action or damages claim we can then get back to you. Write this email down, you could well be wishing you did. Keep it safe.


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## drsmith (20 November 2008)

There's an article on this in today's Sydney Morning Herald.

http://business.smh.com.au/business...w-on-trees-you-know-20081119-6bji.html?page=1


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## irenebrisbane (21 November 2008)

We, too, like Forenth attended the "seminar" on the Gold Coast three days ago and the format was exactly as portrayed in his report.  Confusion reigned and they cut the Q & A session after approx 6 questions.  As stated they did adjourn after the "explanatory meeting" and it was depressing to see that less than half of the attendees returned for the Q & A session.  LIke Forenth, we are worried that there will be enough "yes" voters to carry this motion through.  Interestingly, the director(?) asked for a show of hands: existing shareholders; cattle investors; growers of tree lots.  The show of hands for cattle investors was minimal; shareholders likewise; tree lots: quite a handsome show of hands.  Who were the remaining attendees who did not raise their hands at all?  Presumably they would be there at the invitation of Great Southern so must have had some concern.  Puzzling.  They were the ones who did not return for the Q & A session.  We have already cast our "No" vote by proxy to make sure we get it in on time.  I do have this sinking feeling, going by the attendees at the meeting, that the our votes will not be enough to stop this madness going ahead.


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## Forenth (21 November 2008)

I have again lodged a complaint with ASIC including extra details. It read:

Great Southern Limited (GSL) continue to press ahead to take the assets of agribusiness growers even without their consent. The basics of the scheme if successful are:

- GSL gains extra revenue from the sale of the harvest, from 5.5% to 100% of proceeds. An increase of 18 times.

- By the issuing of new shares to growers as payment, GSL reduces it's debt gearing to 29% of current levels. This share issue requires minimal actual outlay from GSL.

- Growers are offered these shares at $0.50/share, despite a current market price of $0.30. An immediate 40% loss.

The problems with this are obvious:

- growers don't want shares, if they did they'd go buy them at $0.30.

- growers invested for the long term. Many are retires who invested their savings in projects over successive years. A lot have hundreds of thousands of dollars involved.

- The effect on the value of growers investments is obvious. In my case using GSL's own figures each woodlot of my investment, due in 2011, will distribute $3160 after expenses and deductions. This is close to my own estimate using the foresters reports and prices etc. Most of this value is already on the ground as timber since the project is 75% complete.

I will implement tax minimisation, at the very least via salary sacrifice of salary, so my maximum tax rate will be 16.5%. Overall I take home $2638 of this.

GSL want $0.50 for each share worth $0.30. They are capping the # of shares as 4958 / woodlot, so GSL pay $1487 pre tax for my $2638 post tax of standing timber. If I cannot be effective with tax minimisation in the remaining half of 2007-2008 I will pay $468 tax (@31.5%). Post tax I receive $1019, vastly less than the $2638 I am already set to receive.

Natalie Egan, a GSL manager currently presenting information sessions around the country agreed at the Albury meeting that any possible benefit to growers relies on the share price increasing substantially, and that if it doesn't they will make a large loss. An admission that this plan inflicts huge losses on investors. Cameron Rhodes, CEO, at the same meeting agreed that GSL make no guarantees whatsoever that the share price will improve. He cut off the meeting after 7 questions, perhaps because he didn't want it to become like the Melbourne session where management responded to angry questions with arrogance.

Natalie stated that GSL value the company higher than market value as the assets / share would be around $0.90. However, GSL's own figures show that assets have been stable around $2.00 / share for the entire period of the last 3 ½ years where share price has fallen from $5.03 to $0.30 in a steady downward trend. The last 18 months have been especially consistent.

This is a clear demonstration that assets have no effect at all on market valuation of the company, and to use them as justification of future share prices is ludicrous. This is especially true if assets/share will halve under this plan.

This scheme is only beneficial to GSL, by the huge extent of 18 times more revenue for almost no cost, but inflicts massive losses on investors who already have timber on the ground. GSL want them to take the strong and increasing certainty of their return and replace it with the substantial risk that the share price improves the large amount needed to get back to where growers are right now. ASIC cannot fail to see the implications of this to tens of thousands of growers. I have 5 woodlots but many have dozens and some more than 100. The effect will be similar to those investors in HIH.

Banks do not decide they need more revenue and seize investments by issuing shares with a 60% premium on price.

With regard to the contract for the investments, in my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation".

So each grower invests as an individual and is not bound by the decisions of other growers. There are no if's, but's, exemptions or other condtions. No partnerships or collectives are established. The decision of one investor to sell cannot be forced on another.

There is also that this scheme has to be fair in all facets, not just financial. The scheme allows individuals to still accept the scheme if the majority vote no but forces all growers to be involved if the vote is yes. To be fair this should include an option for individuals to opt out in this circumstance.

Under section 6 of the Constitution majority votes can't be taken for anything but early termination of the project, which is defined under Procedures of Termination as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This is a direct breach of contract.

This entire scheme is hugely detrimental to the interests of the investors and will realise losses of 60%, or more to those on higher tax rates, which do not have to occur at all as growers already own the timber which is already existing. This affects hundreds of millions of dollars owned by tens of thousands of investors.

The scheme also involves breaches of contract on two counts; forcing the decision of one grower on another when explicitly forbidden, and holding a majority vote for a purpose other than early termination of the harvest, in this case GSL seizing the harvest.

Many shareholders are angry and we hope and strongly urge ASIC to investigate this matter quickly due to the large number of investors and value involved, the devastating effects on those investors, including many retirees, and the fact that GSL want to push this all through with a vote on 1/12/08. At least please force GSL to postpone this scheme and vote until ASIC have investigated.

Thank you.


If you are concerned, angry, or just confused and need more time to look over it all then WRITE TO ASIC AND LODGE A COMPLAINT. go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288

Stick to the facts and figures, not too much emotion, and urge them to investigate. Ask them to at the very least force GSL to postpone the vote until those who are confused can have time to clear their mind and make an truely informed decision.

I have also contacted the newspapers in most capital cities in letters to the editor. Please everyone also do this. For most of them you can do it at their web sites.

Let's not sit by idly, let's get some action going!


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## irenebrisbane (21 November 2008)

I will be lodging my complaint today as well as writing to media.  We are retirees and this is impacting on our finances - particularly in such a volatile global meltdown - adversely, of course.  Many thanks.


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## Forenth (21 November 2008)

Remember the $2.00 net tangible assets being promoted in the 'information seminars'? I've just found a message from Jackob made back on 27/7/08 which I quote:

"GTP’s NTA (net tangible assets) is officially about $610m, or say $1.90/s (at 30/3/2008). 

Suppose that GTP could sell 1/10 of its assets in the first year, and what it could get would be ($610m*1/10) = $61m. (The 1/10 assumption is lenient, as most of GTP’s lands are for the 11 year woodchip schemes, and the size of them 11 years ago were only a small fraction of the present). 

Now, GTP has debts of ~$700m (at 30/3/2008), which needs interest payment about $70m a year. In addition, GTP has about $2.5 billion worth MIS projects under control, which need at least 2% of the total value as the maintenance cost, that is $50 m.

So, the total expenditure needed would be at least $70m+$50m=$120m, which is about twice of the $61m NTA sale results. Plainly, GTP would indeed go oblivion in such a way. 

Thus GTP’s $610m ($1.90/s) “NTA” is only a pie in the sky, which you can never get it. The problem in GTP’s NTA valuation is that it has hidden its liability for maintenance of the existing MIS schemes and service of existing debts in the future. I believe if these hidden liabilities were correctly included, the present GTP’s NTA should be negative."

If that's all true the share price has no backing at all and management are misleading us. This explains clearly the ENTIRE reason for their grab at our money. We know they're not doing well but wow. Cameron Rhodes must really be trying hard to get those performance bonus options issued at $0.00 that are listed in the memorandum.


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## drsmith (21 November 2008)

Based on the above argument the NTA backing is, technically speaking, real (to the extent that valuations on their assets are realistic) but they can't use these assets to finance the day to day running of the business or the cost of credit. This is where the revenue stream from harvesting of the MIS assets comes into play.

The simplest and most effective argument against this is section 12 of the 2000 prospectus as noted in Forenth's letter to ASIC a few posts above, assuming it is common to all the affected forestry prospectusus.


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## hodgy (22 November 2008)

Hi
I have 2007 Cattle and while I have not seen any discussion on the Cattle I assume the theory is much the same as woodlots. Is it?
Thanks to the forum contributors for some pointers.
I am pretty confused by this. I thought I had made mid a term investment in a managed investment scheme. If I wanted GSL shares I would have purchased them.  
I have decided to vote no and am finding it hard to understand how a majority vote could force me to relinquish my investment and then have to deal with the other implications eg. tax. 
I checked the Cattle PDS and it also has statements in the same vein. "The RE must carry out its powers in accordance with section 601FC(1) of the Corporations Act which includes act in the best best interests of Applicants and Graziers, treat Applicants and Graziers who hold interests of the same class equally etc". 
"No partnership is formed between the Grazier and the RE, or other Graziers."

Any comments appreciated.
hodgy


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## slim pickins (23 November 2008)

hodgy,

its basically like this, if this vote fails and i obviously hope it will, I will give you the same offer for your interst in the cattle project.

that is.... i will give you (if you want) less then a third of what you paid for your investment initially. i can pay you in cash or even GTP shares if you like.

after the deal is executed... i can guarantee you will be left with very very little. so my offer is open to nayone that is thinking of voting yes to this scheme. just vote no and contact me for the same deal.

cheers


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## David Mond (23 November 2008)

slim pickins said:


> I have just talked to my lawyer, and i am trying to organise a court injunction to prevent this vote taking place next month.
> 
> in case the injunction is unsussessful, i suggest any investor in MIS that is unhappy with this arrangement contact me to organise a massive damages claim against the company.
> 
> ...




Dear friend,

I am the Principal of David Mond & Associates.I spoke out against the proposal at the Melbourne meeting.Our accounting firm's clients has around $2m invested in woodlotas via myself and clients.

I am also director and part owner of Recoveries Corporation and my partner Leon Sholl is an investor and solicitor director of Rec Corp and the company also owns Mason black Lawyers,litigation specialists.
We are very keen to issue injunction proceedings this week. We are sending a letter to Cameron Rhodes to that effect tomorrow.

We need to harness all forces to unite in this purpose as it will minimize shared costs and provide substantial strength against Great Southern and its directors and advisors.
There also a number of Financial advisors who no doubt wish to participate in this application.

The issues before a court include:
1. This proposal is in contravention of the contract entered into by plantation owners with Great Southern."There are currently no provisions in the Project Constitution or the Corporations Act to allow the exchange of interests by all Project Investors in the 2002 (read same for all years) Project for GSL shares." page 4 Explanatory memorandum
2. There are loans outstanding against the plantation assets.These loans are based on the contract between great southern and the plantation owners as tree owners and not substituting shares for trees.Changing the underlying asset affects the loan agreement.
3.The tax payable on the shares brings forward any liability by 3-6 years.
4. There is no cash with the offer to pay back loans and the tax liability.
5. If we do nothing " your woodlots will be automatically acquired by a GSL group company" page 4 explanatory memorandum.
5. The plantations are the property of the investors. GSL has large debts to financial lenders and they are preferential secured creditors. On liquidaqtion,the shareholders would get nothing.
6. Given the current economic crisis,many investors will be forced to sell the shares to repay the debt and pay the tax.The share price will go to nothing and they will lose the asset of trees and be left with debts.
7.The plantation investors were never consulted prior to issuing the scheme proposal.Steven Cole says he recommends the offer in the absence of a superior proposal.
8.Mr. Steven Cole cannot in our view be considered to be an independant person as a Director of GSMAL.He and his 2 "independant" collegues sit with Mr. Rhodes and another director of GSP on the GSMAL board.Their fees come from Great Southern. The plantation investors have no representation.Mr. Cole and others at GSMAL have, we say,breached their fiduciary duty of care to the tree owners.
9.,Mr Duncan Calder of KPMG and KPMG have failed in their duty of care to plantation investors.
10.The offer was amended as the first offer was commercially a rip-off. Our view is that nothing has changed.

Please call me on 0418360349.

Kind Regards
David Mond


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## Forenth (23 November 2008)

To all,

I have sent the following to KPMG regarding their expert's report. After all, how can they continue to support this scheme in light of the current share price? We all know it will be lower than $0.285 by the end of the month, that's one thing I would bet on.


Dear KPMG,

I am deeply concerned that KPMG in WA have issued an expert's report on the proposal for Great Southern Limited to issue shares in GSL to investors in forestry and cattle projects in exchange for those projects which states that this is a fair deal for investors.

At the time of the report the share price was $0.435 and had been dropping for over 3 years, almost linearly for 18 months. Issue price is $0.50 to be made after 1/12/08. Last sale on Friday was $0.285.

The effect on the value of growers investments is obvious. In my case using GSL's own figures each woodlot of my investment, due in 2011, will average distributions of $3160 after expenses and deductions. This is close to my own estimate using the foresters reports and prices etc. Most of this value is already on the ground as timber since the project is 75% complete.

I will implement tax minimisation, at the very least via salary sacrifice of salary, so my maximum tax rate will be 16.5%. Overall I take home $2638 of this.

GSL want $0.50 for each share worth $0.285. They are capping the # of shares as 4958 / woodlot, so GSL pay $1413 pre tax for my $2638 post tax of standing timber. If I cannot be effective with tax minimisation in the remaining half of 2008-2009 I will pay $445 tax (@31.5%). Post tax I receive $968, vastly less than the $2638 I am already set to receive. This translates to $0.195 / share. Share price has to increase over 170% for me to just get to where I will be anyway, where is the assessed value payable as extra to me for this substantial risk?

These are real numbers which will devastate my finances and those of tens of thousands of investors, in particular the large proportion of retirees, some of whom have over 100 woodlots affected. Overall hundreds of millions of dollars are lost, the effect will be similar to HIH and I'm sure will gain the same media exposure.

KPMG and GSL state that assets/share are greater than $0.50, but share price has dropped from $5.03 to $0.285 with NTA being stable around $2.00/share. Clearly this has no relationship whatsoever to market value. How can this be claimed to cause it to increase?

Where is the earnings based valuation of GSL? This is the usual value of a company. Would KPMG buy these shares? Look at the share price and earnings and no one would.

How can KPMG as a corporate citizen continue to support this proposal as being in the best interests of growers? With these dramatically altered circumstances KPMG should feel compelled to withdraw support for this proposal and alter the expert's opinion report appropriately.

Thank you.


Also, everyone please respond to David Mond with support.


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## slim pickins (23 November 2008)

dear david,

you have pretty much hit the nail on the head with the outstanding legal issues in this matter. 

only a couple of things to consider... there could be an action against KPMG forcing them to withdraw their advice. and also clarification of the advice which states "offer should be accepted in absence of a better offer" that is just misleading and wrong.

second thing is the possibility of allowing the vote to go ahead cause it might actually fail. but that risks getting some MIS investors on board with the company's proposal, and a slow acquisition creep of woodlots, over the next year or so.

also even if an injunction is not granted the court should be asked to rule that the offer is not binding on MIS investors that voted against it. 

well apart from that you have it pretty much covered.

you are in victoria it seems, however the contract that i have entered into with GTP was in NSW i am uncertain if that has any juristictional consequences but regardless, i have a lawyer in sydney who will be doing a similar thing. he will be calling MIS investors and trying to get them on board in the class action this week. 

its the only way to keep the costs down. any MIS investors concerned and want to take acton in NSW should contact,
"Johnston Vaughan solicitors" and speak with Amil. he is a good guy and a very sharp litigator. his number is - 02 95876833

personally i dont care if you contact Amil or David, the law firm that handles the matter in each state should be the one that can organse the most people sooner and act in time. 

there is very little time left. monday and tuesday should be the days that MIS investors are contacted and retained as clients, tuesday night should be an all nighter, preparing the court work and that thing has to be filed in court very soon afterwards. just as an afterthought, isnt the only juristcition that can stop this vote WA where the vote is taking place or is this thing in the federal court because of the corporations act. its nto easy... the lawyers will have to earn their money this time


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## irenebrisbane (24 November 2008)

This is in reply to David Mond's comments and also Forenth.  We live in Qld.  Does David have jurisdiction in this state or should we look for someone local.  At the moment we do not know of anyone here who would be able to handle the subject at such short notice.  

Many thanks


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## drsmith (24 November 2008)

While at the local fish and chippery this evening I saw an article in Saturday's West Australian on this.

According to the article a former Great Southern director, John Hassen was trying to contact 1998 and 1999 MIS woodlot owners to advise them against approving this scheme. The article also revealed that he has woodlots in the both the above schemes.


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## brty (24 November 2008)

Hi,

I see the NTA of this company mentioned as holding up the SP, especially regarding land assets.
I wonder if the NTA of this land takes into account the rehabilitation of the land to be fit for farming?? In the South west of Victoria a good Dairy farm will sell for $6,000-$7,000 per acre, GTP bought many of these at lower prices.
Today, with the timber companies not buying, the price of good dairy land seems to be around $5,000 pa. 
However to grub stumps, remove/burn them and re-establish pasture, build fences and provide stock water, there is a cost of around a couple of thousand dollars pa, plus a time factor. 

A year or so ago, there was some land sold that was covered in stumps (from pine plantation) just after harvest, prices achieved were $1000-$2000 pa. Land in this area has not risen since. (if anything it is probably a bit softer).

My question is which valuation GTP have on the land assets?? the $5,000-7,000 or the $1,000-2,000??? It could make a big difference in what the companies NTA are.

brty


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## bv2726 (25 November 2008)

drsmith said:


> While at the local fish and chippery this evening I saw an article in Saturday's West Australian on this.
> 
> According to the article a former Great Southern director, John Hassen was trying to contact 1998 and 1999 MIS woodlot owners to advise them against approving this scheme. The article also revealed that he has woodlots in the both the above schemes.




Someone had this letter at the Melbourne meeting and tried to partially read it out and ask some of the questions from it. The people on the stage (i.e. the Directors) already knew about the letter and tried to snuffle out the question asker....who pressed on regardless.

I can't remember the question or the answer...


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## Forenth (25 November 2008)

John Hassen wrote to 500-odd investors in the same projects as himself, giving the reasons he will vote no and recommending that everyone get independent financial advice for their own circumstances. He was not only a pre 2000 GSL director but has also been a partner in Price Waterhouse.

In response GSL wrote to around 4000 investors, rewriting / editing his questions and then gave the same brief, meaningless answers with no substance which they've been giving us in meetings They even included his private financial information, which is outrageous.

The letters are too long to post here but are now in the public domain.

I have also received a similar letter from a concerned investor from Coogee who has the same project as myself. Despite GSL's best efforts he too has realised that $0.50 for a $0.28 (and still dropping) share with only speculation about it improving is an incredibly bad deal.

Where is ASIC in all this?


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## irenebrisbane (25 November 2008)

John Hassen did write to us as growers in the woodlots 1998 and 1999.  He simply reaffirmed what we had decided already, having perused GSL's explanatory memorandum, that we were being ripped off by their proposed scheme.  I find GSL's reference to his financial situation as beyond the pale and an incredibly unprofessional response to John's original letter to GSL.  This simply reinforces the calibre of the GSL directors/personnel in their frantic bid to get their scheme off the ground.

I think it has done them more harm than good.


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## Forenth (26 November 2008)

Great Southern have announced to the ASX the VWAP for shares is $0.2845. The document is available at:

http://imagesignal.comsec.com.au/asxdata/20081125/pdf/00906967.pdf

So they are continuing to push ahead with this madness, trying to make investors pay $0.50 for shares they admit have a market value of less than $0.29. BTW, last trade as of right now was $0.275.

They have made no adjustments to the offer to compensate for losses inflicted, just said that investors MIIGHT be able to offset their new tax liabilities if they take action in the next 7 months.

I encourage anyone to get some financial advice if you're confused and if you're concerned about how it affects you then contact ASIC and maybe David Mond or obtain your own legal advice.


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## Wally1952 (26 November 2008)

What are people's thoughts on the dividend payment? 100% fully franked. Looking back in dividend history, some years paid around the 15c mark. If I go the share option I stand to get around 42,000. At 15c say, that is $6,300 fully franked. Assuming they continue to pay dividends, am I thinking in the right light here? I know all the against arguments, and at the moment I am a bit unsure which way I will go.


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## irenebrisbane (27 November 2008)

You hit the nail on the head, Wally, "assuming they pay dividends".  All questions at the seminar that we attended that were aimed at future dividends were smartly knocked on the head by the directors/financial experts.


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## Forenth (27 November 2008)

Wally1952 said:


> What are people's thoughts on the dividend payment? 100% fully franked. Looking back in dividend history, some years paid around the 15c mark. If I go the share option I stand to get around 42,000. At 15c say, that is $6,300 fully franked. Assuming they continue to pay dividends, am I thinking in the right light here? I know all the against arguments, and at the moment I am a bit unsure which way I will go.




Since you asked, it sounds like you're hoping dividends over time will make up for the loss you'll take now. The following is only MY opinion: GSL have loans in excess of their assets and seem to borrow to have the cash to be able to operate and pay dividends. Even if they seize our assets in this scheme they will not provide enough cash to balance it out. Remember the 98 and 99 plantations are small, the 2000 is the first substantial one and its still a few years away, and still won't be enough.

Overall I see this company fading away but not for maybe 5 or more years, enough for our trees planted up to 2003 to be harvested. Under no circumstances would I ever want to have shares in them, there are MUCH better investments out there. Plus our plantations exist, they have value. Why should we take ANY extra risk just to try and get back to that value?

This is only my view about my situation and this question is exactly why the timeframe of the scheme is far too inadequate. Wally1952, please get some independent financial advice if you still have time.


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## Forenth (27 November 2008)

GSL have postponed the investor and shareholder meetings...

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00907714

They say there's more information to be sent out, but it would have to be amazing to change my opinion. They still intend to go ahead with this one way or another.

Nothing about the vote being halted OR restarted once new information or a revised offer is issued.


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## bv2726 (27 November 2008)

Great Southern have just released a statement (to the ASX) that the 1st December meeting has been adjourned...and they (the directors) will release more information.

More information is  : an updated independent experts conclusion and any change of the directors recommendations.

Can anyone else comment on this? I am puzzled. They (the directors) said (at the Melbourne meeting) that everything was rosy, you have all the information you need, KPMG think its a great idea etc.

Now this? What more information could they have? (or have they been hiding?) What is there to update? And it talks about or implies a change of directors recommendations. Thats the way I read it.

Anyone else?


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## Aussiejeff (27 November 2008)

bv2726 said:


> Great Southern have just released a statement (to the ASX) that the 1st December meeting has been adjourned...and they (the directors) will release more information.
> 
> More information is  : an updated independent experts conclusion and any change of the directors recommendations.
> 
> ...




They also announced that the Preliminary Full Year results to 30 Sep 2008 are to be released earlier than 1 Dec. Maybe the results are a bit unsettling and they don't want another "confrontational" meeting and are hoping the Xmas break will "soothe" shareholders before the shebang?

I don't hold, but am an interested spectator since my bro-in-law holds plenty. He bought in at 80c and refused to sell from $4.50 down to the present price "because the dividend is great and it will bounce back". Even he seems a bit glum of late....


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## gorillapolice (27 November 2008)

There is a possibility here that, in light of the adjournment, investors will be required to vote again.

If so, I would imagine there would be advisers who are out to seek the blood of GS given that many have already spent thousands of dollars advising their clients on these matters.

I'm not surprised - just in awe that a company like GS can't swallow its own arrogance here and realise how deep they're in.

I fail to see how GS will be able to sell another tax effective product again.


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## slim pickins (27 November 2008)

wow... i have just read the company announcement... and although i consider myself to fairly proficient in the english language i could not for the life of me work out what the announcement is trying to say. 

it sounds like convaluted jiber jabber. i have now read it about 10 times and it doesnt say anything except for some sort of an adjournment. some kind of delay.?!?!?!? doesnt say what is really being adjourned or who is affceted. they promise to disclose some more information but..... thats it. how did GTP employees ever get through year 10 english if they write like this. if you handed that "announcement" in as high school homework you would fail.

they are just trying to delay the inevitable.... they know which way the vote will go. baiscally anyone clever enough to have money to invest in a large number of woodlots is smart enough to know what is going on here.

those with a few woodlots here and there... thier vote will make no difference anyway.


and i think GTP has realised that they cant force people to convert their woodlots to shares so they are just trying to get as many woodlots from investors as they can. mainly the disorganied ones with little interest in the project..... i bet people with less then 10 woodlots wont even bother to vote. 

and why not! the company sees an opportunity to get something at a bargain price that it will sell for about 8 times more then it paid. they'll essentially pay $900 or so for a woodlot and sell it for $7000 in a couple of years time. many people will just say oh its too much trouble i just dont know... do what the direcors say.... even KPMG thinks its a good idea. 

of course the woodlots are worthless accoriding to the company. they are almost a liability better get rid of them because these trees might not even exist in this financial turmoil..... that is..... until GTP gets a hold of them......... once GTP gets a hold of the woodlots they are suddenly very precious and safe assets valued at $450 milion that the company will be able to sell to everyone and masisvely boost its revenues and pay off their $800 million debt.

anyone that likes GTP and thinks they are doing well... i ask you tha you take all th emoney you have, sell your family home if you have to and buy these fantastic shares.  just think of all the "franked dividends", your home will after all probably fall in value in the next few years. 

why not just leave us who own the trees alone. after all our trees are solid wood in the ground, insured, gorwing, and they will be sold to the japanese for double what we bought them for.

they pay no dividends, but they dont have to repay $800 million in debt to anyone, they dont make decisions and they arent going to go bankrupt. i cant say the same for GTP.

this company is worth $71 million as of right now. they owe $800  they spend somehting like ... not too certain but something like $9 million of director and mamagement salaries per year. correct me if i am worng... thats 12% of company net worth spent on salaries per year. 

and this company worth $71 million..... i mean you can buy it all for 71 mil.... everything.... land, direcotrs, all future growth, all their buildings and all their land... everyhting for 71 mil.  and they want our trees worth $430 million. 

well they clearly cant afford them so let someone who can afford to buy them. sell my trees on the open market thank oyu very much. if GTP wants them they can pay market prices. i know ill get more for them if i sell them as firewood on the side fo the road then the GTP offer.


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## slim pickins (27 November 2008)

oh whoops.... GTP is worth only $69 million now... thats a $2 million dollar loss in value in 10 minutes... at that rate..... oh dear. and i am loking at their PE ratio.... it says N/A... that means they have no profit. hmmmm.... 

the way this is going i think ill just buy GTP with the change in my pocket. 

when this is over they will never be able to sell any invesment to anyone. the shareholders know it. its game over for them. i think the directors of GTP..... if they open their office windows, they will just be able to hear the chruch bell toll.


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## bv2726 (27 November 2008)

slim pickins said:


> those with a few woodlots here and there... thier vote will make no difference anyway.
> 
> and i think GTP has realised that they cant force people to convert their woodlots to shares so they are just trying to get as many woodlots from investors as they can. mainly the disorganied ones with little interest in the project..... i bet people with less then 10 woodlots wont even bother to vote.




I am a little guy with less than 10 woodlots (in one year). 

I definitely will bother to vote. 

NO!


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## Grumpy Old Man (27 November 2008)

*Other Grower Options*

I have today done a bit of research into this issue.  There are a number of genuine export woodchip companies and operations in Australia purchasing hardwood chip and logs including (but not limited to):

1) Tasmania- Gunns;
2) WA - WAPRES;
3) VIC - Midway and Australian Paper;
4) NSW - Boral, South East Forest Exports (SEFE)

Institute of Foresters of Australia (http://www.forestry.org.au/) can provide contact details for qualified independent professional forestry consultants.  Their Registered Professional Forester scheme includes numerous General Practicing Foresters who can advise on such matters.

If growers collectively employed a forestry consultant to represent their interests, it should be possible to market wood to export companies independent of GTP if this is the desired outcome.

Good luck...


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## Longhaul (27 November 2008)

Yeah - good luck with that.

Could've sworn GTP owns the land, and is managing people's woodlots in drought conditions.

Anyone would think MIS holders own the whole shooting match (except for the debt of course ).

Whether or not you think your deal should be better, you are in it together with the company.


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## Grumpy Old Man (27 November 2008)

Longhaul:

Woodlot investors are customers of GTP - not part of GTP.

Woodlot investors dont own 'whole shooting match', only the assets of the MIS scheme.  Given that these are the ONLY effective assets given land is encumbered and GTP spent all the cash, why would we now want to be saddled with the debt mess that GTP management have created?

Big difference between a customer and a shareholder. Big surprise coming.


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## Grumpy Old Man (27 November 2008)

National President of Institute of Foresters of Australia is:

Name:   Peter  Volker 
Role:   National President 
Email:   peter.volker@iinet.net.au 
Division:   TAS
Phone:   03  6233 7444 

Good place to start...


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## Steven 8675 (27 November 2008)

Why hasnt ASIC or A Current Affair had somthing to say about Great Southern and the scam that seams to be unfolding?


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## slim pickins (28 November 2008)

longhaul,

so what if they own the land, as far as i remember MIS owners have leased the land. it doesnt matter who becomes the next land owner. they have to honour that lease as far as i know. 

i dont know about drought.... is the drought everywhere in australia? do trees stop growing in a drought? are the trees still knee high because of the drought? as far as i know Blue gum is a native australian tree that has evolved to grow well in australia and australia has droughts all the time. droughts are probably good for it.  excessive rain will probably kill the blue gum. even so.... worst case scenario the yield is 10% less then it should be.. so what. 

why doesnt a current affair report the story.. maybe it doesnt appeal to their viewers. its not quite on the same level as "that farmer still cant find a wife"...... and even if they did air the story.... many people would just say... hah... the whole thing stinks ...tax evaders and crooked directors, they all deserve each other. i hope that farmer finds a wife 

and i dont mean to insult anyone with less then 10 woodlots... i mean that investment is about half a years salary. not small at all, but where are the MIS investors that will vote yes to this proposal...... 

there are several categories of people that i expect to vote yes or abstain to this... and let me list them if i may... and i dotn mean to be crass although it might sound like i am, but these are the only reasons i would encourage people to vote yes

1) if you are terminally ill
2) if you are over 78
3) if you have just committed a major crime and have not been arrested yet.
4) if you are about to go bankrupt and this is the only way to get some money, and i mean the only way.
5) if you have already sold everything you own in order to buy GTP shares and you really really want more.
6) if your mum or dad, husband or wife are on the GTP board of the directors and you just cant bear to see them publically humiliated.
7) if your spouse is abotu to take all your assets in a nasty divorce and you want to ensure they get nothing. 

then please vote yes for your own good


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## mark_au (28 November 2008)

slim pickins said:


> longhaul,
> 
> 
> why doesnt a current affair report the story.. maybe it doesnt appeal to their viewers. its not quite on the same level as "that farmer still cant find a wife"...... and even if they did air the story.... many people would just say... hah... the whole thing stinks ...tax evaders and crooked directors, they all deserve each other. i hope that farmer finds a wife




What are you trying to say about our "flagship"current affairs programs, its not like their only interested in running "Puff pieces", they do serious stories.. like, umm, they interviewed britneys mum  ;-)


60 minutes has really lost its way........
sadly even the 7:30 report is getting a bit lightweight from time to time but its still a beacon of shining light


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## gorillapolice (28 November 2008)

Share price listed at $0.21 - you would be crazy to take this offer up given the shares are a near 30 cents below what they are offering investors.

This is a time delaying tactic designed in order to get investors who haven't already voted to vote yes by trying to provide them with more information that puts the offer in a better light.

But the longer they hold out the worse the share price is going to get, it's inevitable now, surely.


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## Forenth (28 November 2008)

Better make that price $0.20 as of now, and they want investors to pay $0.50. Any offer based on today's price would be out of date by tomorrow.

Include tax and the price has to almost quadruple just to break even with where the investment would be anyway. I'm a 2000 investor and why would I ever want to take that risk when my investment is 80% grown and has a strong certainty of the return?

GSL would have to offer a stunning premium to accept their new scheme, whatever it is. Gorillapolice could be right, maybe there is no improved offer and they're just renovating the presentation of the scheme. Trying to dazzle those who haven't seen past the thin layer of bright paint to see the underlying decay.

If they want me to vote again its still NO!


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## slim pickins (28 November 2008)

oh dear... 17% fall today. we are at 18.5c a share. that means that the very very remote possibility of this vote passing is already factored into the price.

when it turns out to be a no watch the short sellers have a field day. it will sink like a lead weight. 

why doesnt the 7.30 report do a story about it... must be political.... maybe they dont want to upset the shareholders, invesment funds. after all as a staunch capitalist i believe that companies should be abel to take advantage of the naive. its darwinism at its finest. 

i dont need KPMG to tell me anything. they can tell me the the sky is green till they go blue in the face. btu when i look outside if the sky is blue.... its blue.

it really reminds me of september 11, when the first plane hit... they told the people to stay where they are. these are professional first response teams telling people to stay in a building that was just hit by a plane... and believe it or not.... some poeple actually stayed. 

well the plane has just hit...  KPMG can say whatever they want... i'm getting out. 

its just amazing... it looks like you can pay an accounting company to say whatever you want. arthur anderson did that didnt they? whatever happed to them?


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## gorillapolice (28 November 2008)

slim pickins said:


> why doesnt the 7.30 report do a story about it... must be political.... maybe they dont want to upset the shareholders, invesment funds. after all as a staunch capitalist i believe that companies should be abel to take advantage of the naive. its darwinism at its finest.




There is no story because there aren't enough investors collectively waving their hands up in the air, wanting to be seen and heard.

Sure, there are numerous small separate factions doing their own little thing and many have individually complained to ASIC.

But aside from David Mond and one or two others who have tried to collectively round up investors to the masses to send a resounding message to a) Great Southern and b) the public to get some air time to voice what's really been happening - there simply just aren't enough people collectively stamping their feet and raving and ranting to get the message out.

Many advisers don't want to, they'd rather sit back and communicate with their clients directly and advise them to vote no but stay out of what has become a real **** storm.

The share price is toppling - even on a "great" day for the market (given current conditions).

The problem with this entire situation is not the proposal put forth by Great Southern itself but rather the arrogance of corporate fat cats who fail to recognize that a majority of their investors were actually born with a brain and some common sense!

Even now I am bemused to understand how the likes of Cameron Rhodes, Steven Cole and Phil Butlin failed to swallow their own egos and arrogance at the Melbourne seminar and understand that those attending were *not* there to be informed on their "New Great Southern" but rather there seeking blood.

Investors be warned. If you want to throw away what was (and should have become) a smart investment has now become nothing and the management of Great Southern are to blame.

Taking that into account, before you vote, consider this: Great Southern, in their information seminars, are proposing "A New Great Southern". What will be so new about it? Same directors, same board. The only difference is you won't own your trees.

...and at the end of the day, even if Great Southern fall, your trees will still stay in the ground.


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## slim pickins (28 November 2008)

gorillapolice said:


> Investors be warned. If you want to throw away what was (and should have become) a smart investment has now become nothing and the management of Great Southern are to blame.
> 
> ...and at the end of the day, even if Great Southern fall, your trees will still stay in the ground.




the trees are a fine investment... they are growing better then any blue chip share on the market right now. that is why they are the object of this corpoarte piracy.

it makes no difference if GTP fails or not. if they fail the management and sale of the trees will be taken over by the administrator. and later the management rights will be bought up my a more sensible forestry company. 


now regarding the delay to the vote.. i wonder if there is a provision in the corporations law that invalidates the already cast votes in case of such a delay.... could that be trick they are relying on?

alternatively.... they will just try to delay until the share price goes up to one dollar wich would allow MIS investors to get their money back with nothing to show for it for the last 8 or so years.

unfortunately (for them).... the share price is only going one way.. and thats down.... i ask you with each day that passes, is their ability to repay an $800 million loan getting better or worse. i think the value of the whole company ... now only $60 million is the yearly interest they are liable for.

i ask you... how long can a company last, when its yearly interest expense is the equivelant of their whole net worth. we shall know very soon. i suspect they will just delay them selves into an early bankrupcy. 

mind you.... if this thing passes... i can see their share jumping to about 35c and possibly delaying their bankrupcy by a year or so. 

if there are any MIS investors that will vote yes... i beg you to present an argument as to why you are going to do so. just for a laugh


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## gorillapolice (28 November 2008)

slim pickins said:


> now regarding the delay to the vote.. i wonder if there is a provision in the corporations law that invalidates the already cast votes in case of such a delay.... could that be trick they are relying on?




From what I have heard people who have already voted will not be required to re-vote. The adjournment is designed to sway those who have already voted to amend their no votes to yes votes (by providing them with 'new' information).

Needless to say, they're going to have to come up with something pretty mindblowing to get any investor who has already voted no to amend their vote given the $0.18 closing price of their shares today.


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## slim pickins (28 November 2008)

gorilla,

hehehehe yes i see.... it looks like nothing can extinguish hope. ah well... lets prolong the agony further.


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## Mad Cow (28 November 2008)

Howdy all. I have been reading your postings over the past few days, and it struck me that the postings are a bit one sided, as they mainly relate to plantations projects. So I thought I’d give you my input, as a cattle man, well at least I have 2006 and 2007 project droves, so that must qualify me as something, even if it is just plain stupid!

I have discussed the current situation for many an interesting hour with my spouse (“Cow Pat”) and my daughter (“Little Heifer”). We are left wondering where, or rather how will it all end!

The way I see it is as follows:

Firstly, all these so called “independent” reports around, are a laugh. None of them are truly independent. They are all prepared by people being paid by Great Southern or its subsidiaries, and they all have a vested interest in an outcome that suites the needs of Great Southern. For example, this is particularly true of the KPMG report. There fear is obviously if they stand up and tell Great Southern the truth, that their proposed  project sucks from an investor viewpoint, Great Southern are hardly likely to go back to them for “independent” reports in the future. Hence, “he who pays the piper, calls the tune” has never been truer than in this instance.

Now, what really gets me with all of these reports is their asset evaluations, and the implication that all the investors have invested in the projects is the asset value of the cattle. The way I see things is that presumably all of the $5000 per drove up-front did not just pay for the cattle assets, but presumably paid for the setting up of the project. Hence, to value the investment KPMG etc should not just be valuing the beasts of the field, but the “project” as a whole, which is a fully operational cattle enterprise, which we paid to setup, not GSL.

What really got stuck in my hoof this year with the 2006 cattle project was that Great Southern only sold 40% of the available cattle they should have sold. Supposedly to wait to get bigger bucks for the other 60%, but this was at the risk of possibly getting even smaller bucks if the beef price went down further. I have my own theory (conspiracy) on this though. Call it far fetched if you dare, but I reckon if I were Great Southern trying to pull off their scam I would have held onto the 60% of the cattle from last year until after the vote, in the hope of pocketing that 60% of the cash for the cattle in the event of the YES vote. My conspiracy theory does not stop there though, cause then this has the benefit on making it look as the returns are down for the first year, of the 2006 cattle project expectation, and allows Great Southern to claim a bigger shortfall than there should have been, if there should have been a short fall at all. That way KPMG can play the “shortfall fear” Tarot card in their ”independent” report’. Nice one!!

It seems to me, even in the presence of the “apparent” poor returns made this year by Great Southern 2006 cattle project, it is still tracking pretty close to where it should be at this stage in the project. I did not get this information from any of the “independent” reports I looked at. Indeed, the KPMG report told me I should not event consider comparing how the investment was meeting the original expectation. Strange that!

 If the "independent experts" think I want to take shares in exchange for my assets, at a greatly reduced asset value, have those shares fall dramatically in worth on the first day, be liable for 46.5% tax on the shares, and then loose all my money when the shares go to zero or I have to sell them at a price approaching zero to pay the tax, the “independent” experts must be “smoking dope”. 

Yes, you can be sure I’ve sent my NO vote in. I hope this delay does not mean I am going to have to waste time sending in more NO votes just to ensure GTP get the message!

You would have thought that all of the independent advisors who sold us the bum steers in the first place would have been in the best position to band together to fight on the halve of the little guys (that’s me you know), but I don’t see that happening any time soon. My advisors in GTPs pocket, he’s to used to raking in his 10% of sales. My advisor has been conspicuous by his silence during recent events! Ah well … He may not do so well this year, that’s for sure. Is there some central organization to which advisors belong, who is doing anything on behalf of investors in all this turmoil?

Well, I had better go, as the above is probably going to be too big when I try and put it up for display on-line. Just one final thought though. I was thinking the other day over a beer,  that because I have been giving Great Southern a hard time lately I would not put it past them, out of spite, tuning up in a cattle truck at my front door with my 228 steers, and telling me to look after them myself in my garden. Well, I have been thinking about this, and I reckon I could just fit them in, as I have a 650 square metre lot. Any body know if it is against the regulations to fit 228 cattle in a 650  square metre residential area? Of course, some of them are going to be looked after pretty well, as half the lot is taken by the house, so half of them are going to be in doors with Cow Pat, Little Heifer and myself!! But do you know, being very resourceful as I am, I have come up with the perfect scheme. Yep, I am going to start selling cow manure from home, yep, you heard me right, cow manure!! You know back in England, where I originate from, they always used to say about farmers, that there’s “money in muck”! Well, I think I can see know what they meant. Come to think of it, it kind of runs in the family, as Cow Pat’s uncle Harry used to keep pigs. But I think I will stick with the cows in the house!

Well I had better go. Keep up your good work spreading the word to vote NO on this issue.

PS: Oh, I almost forgot. Did anybody out there receive the mail out from Peter Gibbins recently under the banner of “Sentry Group”? Well, on investigating the privacy issues associated with this with Peter, I was actually dumbfounded to find out from Peter that he paid Great Southern to mail it out for him, and of course they agreed, as Peter is a strong supporter of the YES vote. I thought this was all a bit “covert” of Great Southern”, but Great Southern seemed to think it was all OK. What do you think?

Yes, I’m really gone now. Take care .. and stick together in the presence of adversity…

moooooooooo ...

Mad Cow


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## slim pickins (29 November 2008)

good post mad cow.  i also think that when all this is over we need to move to change these independent advisors. i mean what a nasty bunch. and KPMG....  if we publicise this, any audit signed off by KPMG will be worthless.

i would never buy a comanies share whose books were cooked by KPMG...... they are clearly following the path of arhtur anderson.


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## Forenth (29 November 2008)

Good to hear from a cattle man, you're in the minority but still being told to swap for the same lame duck.

Shares ended up at $0.19. At $0.01 I might actually buy a few and see if they get to $0.02 for a profit.

I received some new GSL info in the mail, I hope that's not the 'updated' info cos' it was just the same rubbish as before. It just whined 'aww go on, pleeeeease? You can trust us.' At the same time I was guarding my wallet.

There must be something else coming surely. Anyone seen anything?


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## Mad Cow (29 November 2008)

Howdy again!

I was wondering how many Great SOuthern investors are out there looking at these postings. It seems to me, the big advantage GTP has is that they have the money and the communication mechanisms to promote their viewpoint, better than the "little guys" do. Well here's your chance!

Hence, I am interested in finding out how many little guys are out there, and which side of the fence they are standing on the YES/NO vote.

Now, I am the first person to respect privacy, but on an issues such as this I figure is is time to make a stand and be counted. Not that I'm a schollar, but someone I'm sure in history said "evil flourishes when good men do nothing", or words to that affect. We all know what the "evil" I am eluding to here is!

Anyway, if you have the same interest as me as to the numbers of viewers and their current thought process do the following. Note: I apologise in advance to those people who think the voting process is private, and that I shoudl not be asking them to vote. Well actually, the voting process below will be private, in the sense that noone other than me will be able to see how you vote, and I am not interested at an individual level how you vote, just what the overall vote outcome looks like at this stage.


If you want to have your say do the following, if you do not want to have a nice day anyway:

Send an email to:

HaveYourSayOn_GTP_Offer@hotmail.com

with the subject line which ever is applicable to you as follows:


Your intend to vote YES:

Sugject Line:
I Intend to Vote YES to Great Southern's Proposed Restructuring Scheme  - YES

Your intend to vote NO:

Sugject Line:
I Intend to Vote NO to Great Southern's Proposed Restructuring Scheme - NO

NOTE: Any emails received as part of the above message will not be replied to, and the email addresses will not be used for anything or given to anyone.


I will post the result of this poll on Monday 1st December if not sooner, depending on the level of response.


Have a nice day .....


mooooooooooooo...


Mad Cow


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## Mad Cow (29 November 2008)

Howdy all,

I thought I had better extend the voting options, to cater for anyone who is still sitting on the fence, so I have added Subject Lines below for those in this situation, i.e. who don't know or plan to abstain.

If you want to have your say do the following, if you do not want to have a nice day anyway:

Send an email to:

HaveYourSayOn_GTP_Offer@hotmail.com

with the subject line which ever is applicable to you as follows:


You intend to vote YES:

Subject Line:
I Intend to Vote YES to Great Southern's Proposed Restructuring Scheme - YES

You intend to vote NO:

Subject Line:
I Intend to Vote NO to Great Southern's Proposed Restructuring Scheme - NO

You intend to vote ABSTAIN:

Subject Line:
I Intend to Vote ABSTAIN to Great Southern's Proposed Restructuring Scheme - ABSTAIN 

You are UNDECIDED: 

Subject Line:
I HAVE NOT DECIDED HOW TO VOTE re the Great Southern's Proposed Restructuring Scheme - UNDECIDED

NOTE: Any emails received as part of the above message will not be replied to, and the email addresses will not be used for anything or given to anyone.


I will post the result of this poll on Monday 1st December if not sooner, depending on the level of response.


Have a nice day .....


mooooooooooooo...


Mad Cow


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## irenebrisbane (29 November 2008)

With all due respect, Mad Cow, I don't know who you are; for all I know you could be collecting information on behalf of GSL.  I am a suspicious person; been around the traps long enough to not be wary.  Will be interested to see how many voters respond to your post.  It is all probably in good faith, but I'll give it a miss this time.


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## slim pickins (29 November 2008)

irene i would not be too worried about anyone collecting information. GTP will have all the names and addresses and which way each person voted anyway.

the names of people voting yes to this could only be useful to those selling some dodgy nigerian scam in the future...  to a scam artist such information certainly shows a persons naivety and suceptability to be tricked out of money. 

i bet i could milk at least 10k out of anyone willing to vote yes to this proposal.


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## drsmith (29 November 2008)

With some forums an anonymous poll can be initiated as part of a new topic but I don't think this can be done here.


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## drsmith (30 November 2008)

I take that back. It can.

The option of a poll is under additional options when starting a new topic.


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## Aussiejeff (1 December 2008)

gorillapolice said:


> Company announcements this morning
> 
> http://www.asx.com.au/asxpdf/20081201/pdf/31dylztrc7fvf0.pdf
> 
> ...




Most importantly - [size=+1]NO FINAL DIVIDEND[/size] on the back of an already paltry 3c interim!! 

Cripes. 3c for the year is not going to go down well. Especially with the company going concern statement essentially saying if (a) the Transform program doesn't proceed, they may fold and (b) if market prices for GSL products fall during the coming year, they may fold.

What a bleak outlook....

My Bro-In-Law is going to throw up this morning when he sees his "regular guaranteed dividend cheque" has just vanished in a puff of smoke...


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## brty (1 December 2008)

The other "or", is of equal importance....

"or should the 2009 MIS sales result be low.."

Given that they are trying to pick up other projects at a loss to investors, then why would anyone be crazy enough to buy one of the 2009 timber schemes???

As importantly, could any financial planner/adviser honestly recommend one of the 2009 schemes to their clients ???

Also something I mentioned earlier in the thread about the asset valuation, the rehabilitation cost of the land is stated as $795/ha in the notes to the accounts. When I read that I thought of the line of Darryl Kerrigan in The Castle, " 'tel 'em their dreaming".

brty


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## Forenth (1 December 2008)

They've also sold some land in Qsld for $23 million.

From the voting figures published so far the % of yes votes required from the still outstanding votes to get 75% of woodlots/cattle lots are:

1998 : 113.0 %, so already a confirmed no overall.
1999 : 104.2 %, so already a confirmed no overall.
2000 : 92.6 %
2001 : 94.4 %
2002 : 89.8 %
2003 : 86.8 %

2006 cattle : 79.6 %
2007 cattle : 78.7 %

If I got these wrong please say so.

They say the 1998, 1999 and 2000 projects look like being a no, while the others are quite possible, with the cattle projects being likely. The cattle are a possibility but surely all the forestry projects aren't looking likely.

They changed their opinion on the 1998 project to vote depending on your circumstances, but still somehow claim the rest are a good deal??? They also claim with the VWAP being lower than KPMG used in their appraisal this is now an even better deal due to lower tax payable?? What a STUPID, ARROGANT statement.

Latest price is still $0.19, I want to see KPMG buy them and find how they like it! My after-tax break even price is $0.755 as I have to pay tax not just now but again when they're sold, assuming they EVER go up. That's *360 %* of the share value today and that's not my risk to take. I own trees due for harvest soon. GSL can rack off.


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## gorillapolice (1 December 2008)

In addition to the absence of the final dividend, what's more alarming is the following:



			
				Cameron Rhodes (from ASX announcement 1/12/08 said:
			
		

> We are encouraged that the majority of individual investors in 5 of the 8 projects support our proposals and we are particularly delighted by the strong yes vote that has been cast for the two cattle projects which are both close to the 75% by value target.




So from this it sounds like Cattle will get up.

He goes on to say that in the absence of a material change to numbers between now and the adjourned meeting dates, the 1998, 1999 and 2000 Project proposals appear unlikely to be approved, then saying "This is probably not surprising as these projects are nearing completion" (Gee, ya think???)

What I find most alarming here is the fact that it seems that there seems to be a significant number of investors who have 'neglected to vote' - so it seems, anyway.


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## Guff (1 December 2008)

Another note, GSL may sell their loan book for 50 to 70% of book value.

This really shows they are desperate for cash!

Is there any way of stopping the sale of the loan book??  If/when GSL go down, investors would then have to pay someone else for the loans.

Sales of assets are likely to be continued to be sold at significant discounts to book value (eg the 23million sale at 11% discount).  All of these thingsadd up to a grab for cash to fund month to month cash flow needs.


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## bv2726 (1 December 2008)

How is this for a theory - and some wishful thinking.

I have some cattle. I have voted no, and wont let GTP take my cattle away from me. But it appears (from their figures today) that they may be able to get some cattle off people.

So, if GTP suddenly own whole heap of cattle...do you think they may "try harder" and get a better price for their cattle? (and me!...cause I am a "partner")

Well, its nice to dream...

I just cant understand it. GTP keep saying "oh its bad, the cattle, the drought, the prices etc" but they want it. So they obviously may get good money for it...

Hoping...


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## lcl999 (1 December 2008)

GTP have some massive debts, some in the form of convertible notes. See GTPGA and GTPGB.

If GTP still exists when they convert, the notes holders will end up with over 70% of the company. However as the notes are way under water, it would seem that the market is placing a rather low percentage chance of GTP surviving.

LCL


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## ardstar (1 December 2008)

Hi guys,

I have stumbled across this forum, and I myself recently invested in 2 woodlots as part of Great Southern's HVT scheme in FY2007-2008. After reading these latests posts I am now quite worried about my investment, as it is the first time I have ever invested in anything 'major'.

Is this change to GTP going to affect all investors, or investors of projects that are near maturity? Also if Great Southern were to go down, does that mean my woodlots are gone?

Sorry if these are stupid questions, but if there is anything I can do as a small time investor then I would be happy to help out, as by looking at that SMH article, Great Southern are really looking to rip us off.

Cheers,
Ardi


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## Mad Cow (1 December 2008)

Howdy all,

Just thought I would let you all know how I got on with the forum poll, whereby I asked people to respond to HaveYourSayOn_GTP_Offer@hotmail.com with YES/NO/ABSTAIN/DONT KNOW with respect to the planned Great Southern restructuring.

Of course, as you would expect, Great Southern beat me to it today, by publishing their proxy votes before I got my vote count in. I guess we must have had them worried we would pip them to the post with the poll results!

To tell the truth, my results were a bit disappointing, to say the least. I had been hoping to see one or two hundred votes cast through the forum, but I guess I overestimated the number of visitors such forums have. Either that or people had visited, but chose not to vote, which is their choice.

Well here is the count and voter preferences I received:

Total Votes cast = 4, as follows:

Vote 1: NO
Vote 2: NO (1998 forestry, where voter indicated he had also info on 60+ other people in the project where they were overwhelmingly voting NO)
Vote 3: NO (2000 plantation scheme, 6 wood lots)
Vote 4: NO (2007 cattle project)


Total: 4 x "NO" votes out of 4 votes cast, i.e. a 100% NO vote (well thats more like it) but I'm afraid it is not statistically significant!

Many thanks to those who voted. 

mooooooooooooo ...

Mad Cow


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## tally-ho (1 December 2008)

I'm a 2006 cattle investor and I'm not sure whether cattle owners realise how much their loss will be if they accept the proposal.

I invested in 15 droves, that's 60 pregnant cattle at $75000 +GST. I received a first announcement about the proposal in a letter giving me a value of my investment to shares (at 1.10 share price) of $244200. That sounded really good. The second letter said sorry that was an error of calculation, but your investment is worth $61050 in shares (at 1.10 share price).

At the meeting I still had the impression that the value of my investment would be $61050 with an accordingly higher amount of shares issued due to the recalculation done in view of the fall of the shares. It wasn't until later when I sifted through the 200 pages explanatory memorandum that I noticed that we would get a fixed amount of shares of only 5910 per drove. In my figures that calculates to a value of $16843.50 calculated at the current share price of $0.19.

It comes to mind that many cattle investors would assume they would receive the Dollar Amount they had received in a letter and might vote yes so they have been deceived.

I was enquiring about cattle prices and even for the slaughterhouse, an adult cow would at least bring in $660 (400kg@1.65). That's $39600 in this example, a much better offer than $16843, so KPMG cannot say that it is the best option.

But then I learned another deception. I received the statement of my cow stock today and it's only 54 cows. I called GSL and learned that the initial 60 cows for which I paid $75000 are owned by GSL and only leased by the investor. Are other cattle investors aware of this? I don't have the original prospectus anymore, but the short version is very deceiving, it even states 

"A stocking guarantee confirms that investors' droves will comprise at least 4 breeding cows after the first muster of the Project herd during the 2007 calendar year"  <that would be 60 cows in my example>

Also speaking to a female staff member at the Perth investor meeting, I was threatened that if we don't accept their offer there would be administration fees to pay next years to come.

I think if the cattle investors have voted yes, it was because of the deception of the letters and the threat of ongoing costs.

Cattle owners have lost at least 80% of their investment within 2 years! 

And they have invested $5000 for 4 unborn calves, which are calculated in the trading stock at $20 each (after they're born). So we got $80 worth of goods for our investment.

Cheers to Great Southern, the Great Con Artists!

Hope to hear more from other cattle project owners in this forum.


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## Mad Cow (1 December 2008)

The 2006/2007 cattle project PDS states what I have shown below. I don’t think this is saying they are owned by GSL, because as far as I know they do not own the cattle. I think it means GSMAL purchases or leases cattle for the project, and that all of the project investors have their share in these cattle, not GSL.

“Leased Cattle

Great Southern Cattle Managers PTY LTD (GSCMPL) a wholly owned subsidiary of GSMAL, will purchase or lease Breeding Cows for use in the Projects and the bulls required for joining.” (Page 20 in PDS)


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## Forenth (1 December 2008)

Dear Tally-ho,

What GSL wants to do to you sounds worse than the forestry scams. Go to ASIC and lodge a complaint. If you look back through my posts I have posted the details of how to do it online, page 59 or 60 on here. I 've complained twice and I heard somewhere tehy've had over 800 complaints now.

Tell them all you've posted and everything else you can find. Sounds like an immense ripoff to me...


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## tally-ho (1 December 2008)

Forenth said:


> Dear Tally-ho,
> 
> What GSL wants to do to you sounds worse than the forestry scams. Go to ASIC and lodge a complaint. If you look back through my posts I have posted the details of how to do it online, page 59 or 60 on here. I 've complained twice and I heard somewhere tehy've had over 800 complaints now.
> 
> Tell them all you've posted and everything else you can find. Sounds like an immense ripoff to me...




I have indeed lodged a complaint to ASIC online today. Your earlier info was helpful. I really think the problem is that cattle investors don't realise how much they will be losing.

I'm glad I found this forum, I think we have some power if we can create a big enough group and now we have some extra time. But how are other investors finding this group or info because they will be looking for keywords like "GSL Share offer" not the ASX code GTP.


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## gorillapolice (2 December 2008)

ardstar said:


> Also if Great Southern were to go down, does that mean my woodlots are gone?




No. No matter what happens to GSL, your trees will stay in the ground.
If GSL go down, somebody else should come in to manage the investments in their place.


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## irenebrisbane (2 December 2008)

Gorilla Police, tell me something happy: if GSL go down won't other creditors - e.g. banks, finance companies etc, have first claim on our woodlots and we get whatever is left over?  That's not right is it?! Please?


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## Forenth (2 December 2008)

Hi Irene,

My take on this is that we own the wood, GSL owns the land. We have a lease and management agreement with GSL to lease the land and for GSL to manage our trees.

If GSL go down then they're still our trees but the land would end up belonging to someone else. Any receivers etc would prolly find it in their interest to let the trees go to harvest if it wasn't too far away. I dunno what would happen if it was a recent planting.


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## Forenth (3 December 2008)

BTW,

On their website GSL have published more detailed results of voting so far. It gives the woodlots for and against and the constitution voting as well so I can update my previous post.

In the case of getting 75% of woodlots/cattle lots as a yes, GSL need the following % of yes votes from the votes still outstanding:

1998: 142.2 %, so already a confirmed no overall.
1999: 112.0 %, so already a confirmed no overall.
2000: 104.9 %, so already a confirmed no overall.
2001: 91.5 %
2002: 89.7 %
2003: 90.4 %

2006 cattle: 81.8 %
2007 cattle: 79.4 %

People who have already voted would have to change their minds for the 1998, 1999 and 2000 projects to be a yes. Not likely (woohoo!)

The 2001-2003 projects would also appear to be more likely safe than not, votes for these have been going about 50/50.

The cattle projects are still at risk but if votes go as they have been then they will also be a no. GSL will miss out by 5-8 %.

GSL are jumping the gun by saying they'll be issuing however many millions of shares. At this rate they won't issue any other than those who for some reason have made individual acceptances.

Close yesterday was 0.175. My after-tax break even price has increased to $0.77. That's 440 % of the share value today and that's still not my risk to take. I still own trees due for harvest soon. GSL can still rack off. I am unable to understand how KPMG came up with their break even prices... their numbers don't work for me. Anyone who hasn't voted should consider the implications to themselves and their circumstances, and get advice if they need it.


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## gorillapolice (3 December 2008)

irenebrisbane said:


> Gorilla Police, tell me something happy: if GSL go down won't other creditors - e.g. banks, finance companies etc, have first claim on our woodlots and we get whatever is left over?  That's not right is it?! Please?




Irene, good news is scarce at the moment but i'll do my best.

There is a restrictive covenant on the land which means that the trees belong to the grower until such time as they are harvested in accordance with the lease and management agreement. 

This is the case where the land is owned by GSL or leased to them. In a nut shell, the trees and harvest proceeds are ours. Unless we choose to be infected by mad cows disease and we give them away to GS for worthless shares…


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## wooduk (3 December 2008)

I have been watching comments from  everybody on GSP.Ihave woodlots in the 2003 and Ihave voted NO to this proposal.Iwould like comments onthefollowing andanything else that CONNECTS THE DOTS                          

1.does not your deed certificate state that gsmal manage the trees?
the certificate states an ARSN number and this number precludes you as the owner of the land remembering that gsmal is appointed by asic after they (gsmal)paid $5,000,000 for entering into the 2003 project as the proper entity
not great southern?great Southern leased the land,confused? yes I am and it is a worry fromastandpoint why other individual investors are not asking questions,who cares if they are mistaken queries getoff your butts and fight for what you invested in the long term for yourself andthe future longterm

2.Was not gsmal supposed to be independant at the Melbourne fiasco---I mean casino and I believe that it was stated that they did not need to have this road show


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## brty (3 December 2008)

Hi,

Just playing devils advocate here, but a couple of points that may be relevant.

If the buy back scheme fails, and that looks likely, then GSL is likely to fold (companies own admission).Should the land be sold off by an administrator, Does this mean that the trees on the properties must still be removed by set dates?? Does it mean that individual growers (or as a collective) will have to negotiate new contracts with different entities to manage and harvest their trees?? 

brty


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## doctorj (4 December 2008)

brty said:


> If the buy back scheme fails, and that looks likely, then GSL is likely to fold (companies own admission).Should the land be sold off by an administrator, Does this mean that the trees on the properties must still be removed by set dates?? Does it mean that individual growers (or as a collective) will have to negotiate new contracts with different entities to manage and harvest their trees??



My understanding is as follows:

Each scheme is a seperate entity that exists in its own right from Great Southern.  The schemes then appoint Great Southern Managers Australia Ltd (a wholly owned subsidiary of the Great Southern Limited) to manage and run the scheme.

Any changes to the length of the scheme are governed by the constitution and compliance plan for each scheme.

It isn't uncommon for a scheme to change its manager.  I believe GSMAL currently manages a number of schemes that were started by other companies (through either takeover or failure of the company).  Environvest comes to mind as an example.

Each scheme's board is responsible for ensuring GSMAL provide adequate services on an arms length basis on behalf of the scheme's members. Oversight on this matter is conducted by the compliance committee which always includes experts independant from GSL and its subsidiaries.  Periodically they will engage outside experts to visit each site to prepare a report on the quality of management of the (for example) plantation.

If GSL folds, it shouldn't be too hard to get somebody else to manage it.  Each scheme, by virtue of the terms discribed in the PDS, grants some manner of revenue stream to the manager and therefore the scheme itself is valuable.

In short, the scheme exists in its own right and it survives any changers of scheme manager.


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## brty (5 December 2008)

Hi DrJ,



> If GSL folds, it shouldn't be too hard to get somebody else to manage it.




who organises it?? who negotiates on behalf of the growers?? to get 'a good deal??'

brty


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## doctorj (5 December 2008)

brty said:


> who organises it?? who negotiates on behalf of the growers?? to get 'a good deal??'



The scheme's board (note this isn't the GSL board).  It is the duty of the Compliance Committee to confirm that the scheme's board acts in the best interest of GROWERS rather than GSL shareholders.  To help ensure this, two thirds of the compliance committee are external to GSL (they tend to be things like prominent Lawyers with experience in Agribusiness).

Essentially what will happen is if GSL folds, someone else will take over the management of it and run it completely per the original PDS given to growers.  Then all you need to worry about is whether or not the new manager has the sufficient skills to run it effectively - the compliance committee ensures this as well.

Final oversight is provided by the auditors who will review all scheme and compliance committee decisions (and the evidence for those decisions) every 6 months or so.  After all that, if you still feel you're getting the rough end of the pineapple, you can go to FICS who are an external dispute resolution body.  FICS is free and acts as an independant adjudicator.


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## brty (5 December 2008)

Thanks for the explanations DoctorJ.

Does the compliance committee have separate money from GSL, or is it paid from GSL funding to undertake its functions??



> someone else will take over the management of it and run it completely per the original PDS given to growers.




Why?? If, as a business proposition, I was asked to just take over the existing, I may argue that I want variations to what was offered 6-7 years ago as market conditions have changed. To think that the same arrangements are acceptable for a different body, who is under no obligation to take up the contract, is relying on a fair bit of hope. 

I think there are many unknowns in all of this, including the possibility that scheme holders will have to fork out extra money to make things happen (bring schemes to a conclusion) should GSL fold. If the compliance committee had no funding source, (funds tied up in GSL and frozen by administrators), then it too could fold. If anyone knows, please post.

brty


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## jiml (5 December 2008)

With the share price now at 14c and dropping between 1 and 2 cents a day, it seems unlikely GRT can survive as stand alone identity. Further, at the current, yet alone projected share price, scheme investors - plantation or cattle -  to vote 'yes' would be to effectively write of their assets. In my estimation, GTP is stuffed inasmuch without 'transformation', debt is unsustainable without cash inflow via new investors which currently seems unlikely. Hm


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## Teddy Bear (5 December 2008)

tally-ho said:


> I'm a 2006 cattle investor and I'm not sure whether cattle owners realise how much their loss will be if they accept the proposal.
> 
> I to have invested in the 2006 cattle project and for various reasons haven't voted yet with the main one being that I phoned Great Southern when this all started and asked what would happen if I didn't go with this and they said that once the project was wrapped up we would automatically be turned into shares.  This seemed like a forgone conclusion to the scheme and I did nothing being horrified with every further letter that I received as were you.  I do however have my voting form here which I would have voted for and am glad to have read your posting and will now vote against.  This is a rip off and I stand to be 25,000.00 to the wind - worst investment I ever made.  Can you advise how I complain to ASIC Pls.


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## jiml (5 December 2008)

Ted E Bare
My advice is they can't convert your cattle investment into shares without your consent. Whether the majority votes yea or nay is not binding upon individual investors. However, I suggest you seek advice to confirm this view.


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## gorillapolice (5 December 2008)

While i'm sure everybody has noticed but hasn't bothered to post it - the current share price is a whopping $0.14.

That would mean that in order for these shares merely to equal what Great Southern are offering them to you at ($0.50) the share price would need to increase by some 250% roughly. 

Oh, and that’s in current market conditions where we’ve got blue chip stocks like Rio Tinto who have plummeted by some 75% or thereabouts (no calculator in front of me, and for the life of me it hurts to calculate at the moment so I’ll go by rough figures).

To make things worse, this doesn’t indicate the smack in the face you’re going to get from Arnold Taxinator when you swap your investments for shares and realise a Capital Gain, therefore getting hit by tax – but hang on, if I remember correctly, wasn’t one of the big reasons of investing in projects such as those in question for tax effective reasons (if not the reason)?

Talk about pushing the proverbial up hill. In fact, talk about delaying the inevitable – putting this vote off an extra two months while the share price plummets even further is only going to deter people even more from voting and/or voting ‘Yes’.

So, to all 'Yes' voters out there - now's your chance to steer your ship clear from the iceberg that is 'Project Transform'.


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## cathadfab (5 December 2008)

My head is now hurting after about 24 hours of reading this forum and researching information online. 

I invested in 2006 cattle and also 2007 trees (which for some reason seem to be safe - who knows why at this stage?).

The reason i started this research so late in the day was yesterday i received a letter from a solicitor in Sydney Dennis & Co outlining a group action they wish to commence on my behalf if I wish to pay them a nominal fee. It seems to that there have been several letters others have received that haven't made it to my letterbox. 

Prior to this I had thought, that as so many have you have stated, that the people with massive investments would be seriously looking into the yes and no vote situation and that the chances were the vote would go the way that would be best for me. Lazy yes? lack of funds and time to get my own advice was the problem though.

My initial understanding of the offer was that GSL had taken into account that I had already received a tax benefit by joining the project and when i did my sums it became quite clear that what they were offering me was pretty close to my out of pocket expenses after receiving my tax relief in 2006 less a few dollars. (not including the interest on my loan)

I also am pretty certain that my financial planning representative was an employee of Great Southern and strangely I have not heard from him during this time to give me advice on what I should do. My accountant at the time put me in contact with him to finalise the deal. Is he not talking to me because he now has a conflict of interest? does anyone else have this problem?

Has anyone else been contacted by Dennis & Co? Does anyone else know what the results of a group action could potentially be? 

Being a small time farmer too, i wonder at the comment about the company holding back 60% of it's stock because the prices were low. We know in our business that you take the high prices when you can get them, but if you don't shift stock then it's not worth zip in a year's time. Not sure about beef and how it sells when it is 6 months to a year older, but for us we lose if we don't move our stock and produce even if the price is short. Would 40% at a good price, and 60% at a lesser price made a reasonable profit for the first or second year?

There are also other markets that may be interested in cheap beef that can't normally afford it. In Tonga turkey tails (yep...the turkey parson's nose) sell for incredible prices. Surely the opportunity could have been there to seek out other markets that may not normally be in the spectrum. 

With all that, for the guy that wants to put all his cows in his backyard, i have heard that you need approx 1 acre per 8 cows. You might be a bit squeezed for space. You might also have to worry about carbon emissions, but i'd love to come over and watch the backyard activity.

And this just sprang into my head...I recall being told before purchasing into the cattle project that the most likely outcome would be a return of around 27% on my investment. Was anyone else given such glowing reports on return? 

Lastly, i couldn't find the info on how to complain to asic anywhere. I blame my square eyes after reading all day. Can someone please repost and tell me what exactly i should complain about...or how to do it?

I apologise now for this obviously being from someone who knows nothing much to add value...Great Southern Cattle '06 was meant to be a nice little earner for me as part of my retirement plan. Now it seems like my retirement will be spent trying to navigate my way around a lot of cattle dung to even get my investment back in whole, let alone try and make a few bob to keep up with inflation.


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## Forenth (5 December 2008)

How to lodge a complaint with ASIC.

Go to www.asic.gov.au and click on 'contact us' for phone numbers etc. If you want to lodge a complaint online:

Go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288

Stick to the facts and figures, not too much emotion, and urge them to investigate.

I asked them to also at the very least force GSL to postpone the vote until those who are confused can have time to clear their mind and make an truely informed decision. Maybe this postponement is my fault! I think GSL's announcement said one reason was ASIC instructed them to.

Lodge complaints, the more the better!


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## Grumpy Old Man (5 December 2008)

Cadthab:

there is some discussion regarding the letter from Dennis and Co on the Hotcopper Blog.  

In regards to your trees, your rights are explained perfectly in the DoctorJ posts above.  

There is an international market price for woodchip.  The market value of the trees to investors will depend upon the market price of the day and required costs of harvesting, transport and port facilities.

If you have a few hectares, highly recommend contacting a Registered Professional Forester (RPF) via the Institute of Foresters of Australia.  They should be able to give you a feel for current market value of a 'generic' hectare of trees - and if you want to spend a bit more money, a forestry consultant can actually measure your individual woodlot and tell you what the market value of your trees would be - including any potential customers operating in the area of your investment.

Failing that, Forestry SA and CALM (WA) have some good generic information regarding the value of plantation blue gum in the Green Triangle and WA.  Also have staff that may be able to assist you.

Good Luck

GOM


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## doctorj (5 December 2008)

Grumpy Old Man said:


> If you have a few hectares, highly recommend contacting a Registered Professional Forester (RPF) via the Institute of Foresters of Australia. They should be able to give you a feel for current market value of a 'generic' hectare of trees - and if you want to spend a bit more money, a forestry consultant can actually measure your individual woodlot and tell you what the market value of your trees would be - including



If I recall correctly, you're also well within your rights to mosey on down to your woodlot with a chainsaw and chop down your own trees at any time and then do with them whatever strikes your fancy.


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## wooduk (6 December 2008)

Ihope investors are not totally depressed gtp bounced back to 15 cents,I am sure that something is legally cooking because it is very still ,todayS&premoved gtp from the asx 200. That is a signature that would have share holders depressed and well and trulely ticked off.That is good for MISinvestors as  it confirms to the NO votes and the subsequent postings that have been on ASFthat you are right about the price that the tree swapping for shares is a disaster.

If there is any court action on behalf of MISinvestors please let us know and what action it is ,meaning willit be liquidation damages and winding it up in each tree and cattle project or damages over alleged misrepresentationor flick the directors and the management .
letus know


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## Forenth (9 December 2008)

Anybody seen the 'updated' information from GSL yet?

This is purely hypothetical, but apparently under corporations law investors can change who is the responsible entity for a managed investment with a majority vote, much the same as GSL's vote. That would mean that if investors were in agreement then someone else, maybe Timbercorp or Gunns (hypothetical remember!) could be approached to see if they want to take over the MIS projects on the same terms as GSL agreed to. GSL would still own the land and the lease for the MIS projects would still be there, but someone else would manage, harvest etc. This would protect the projects from GSL.

Any lawyers out there?


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## irenebrisbane (9 December 2008)

Forenth, I haven't seen or heard anything from GSL since the seminar on the Gold Coast last month.  They've "gone to ground" as they say.  Probably trying to cook up another method of getting our investments.


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## slim pickins (10 December 2008)

hmmmm what can GTP say.... they have said everything already. of course they are concocting more tricks to compliment their scam. 

i mean they have said that the majority of the votes will compel the other investors to accept the deal.... apart from this being wrong and without legal basis, (as the investors rights arise out of contract law and not corporations law)...... they have not said anything about what constitutes a majority of the vote. hence,

the tricks they have uo their sleeve are the probably the following:

1) the delay of course is trick no1, giving the shares time to recover .. which they wont. i mean they could hit 19c and what then... back to 13c and lower.
but of course the shares will bounce a few % as the company has sucessfully tricked some naive people out fo their assets. 

2) the other trick wll be to argue that once the vote is a no, GTP will argue the majority will consist of the project investors at the time of the issue fo the project. and thourght this war of attrition they will slowly keep taking people trees over several years until a majority has indeed succomebed to their rip-of through various reasons.... for example there will always be someone despearte enought to need immediate cash. they will convert it to shares and take 10% of their investment if the need is that great. 

other investors will die and others will get divorced... eventaully the company will take the majority of the trees in this game of attrition and those that are steadfast, the company will just ignore them.... after all GTP wont care about the 30% who will not give their trees up under any circumstances. they wont risk legal action. 

GTP will remain liquid while it continues to take the trees away from people. once the trees are all eaten up by this monster the company will fold.

this could keep gtp alive for a couple fo years potentially. just enough for the direcotrs to pay themselves enough money and retire in comfort because everyone knows they will never get another job. 

anyone buying these shares or sellign their trees to nothing is just contributing to the GTP directors' retirement fund.

i would love to see how many people will become GTP investors this year  even if GTP gets 100 milion worth of trees for nothing... it will be a phyrric victory them.


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## gorillapolice (10 December 2008)

irenebrisbane said:


> Forenth, I haven't seen or heard anything from GSL since the seminar on the Gold Coast last month.  They've "gone to ground" as they say.  Probably trying to cook up another method of getting our investments.




Perhaps they'll try a Nigerian 419 email scam - that might trick a few investors?

I shouldn't be giving them ideas...


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## Guff (10 December 2008)

It really does look like GSL is toast.  The next couple months may see their debt levels rise even further and assets sold off -- they have started to sell land already to lease back to access some of the equity to pay bills and "reduce debt".

GSL will do everything it can to to delay liquidation (it looks like that's where they are headed), even sell its loan book for 50% if it must -- they even said that in their going concern statement.  If one or more of the project-equity swaps get off the ground that will buy them more time.

The only concern I'd have now as an MIS investor is whether (and I'm not saying they have actually done this -- but Palandri Management DID!!) they have double sold woodlots, or not correctly carried out their management obligations in actually planting trees.  Lets hope not.  Again that is not a suggestion or accusation -- I'm sure GSL hasn't done anything of the sort.


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## doctorj (10 December 2008)

The one concern that struck me this morning is that what if GSL board/management have a significant interest in the schemes?  Could other investors be railroaded into accepting the offer of shares if GSL mgt have a sufficiently large holding to swing the vote?


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## brty (10 December 2008)

Hi,

Just sighted this ad in properties for sale from Timbercorp, who are in similar trouble to GSL. (ie high debt no/little cash).

http://www.realestate.com.au/cgi-bi...der=&cc=&c=190783&s=vic&snf=rbs&tm=1228912579

They are trying to flog assets as well. At $171 per acre per annum for the lease plus cpi, then the yield on degraded land is only 3.42% assuming the ~$5000/acre valuation they have on their books.

The competition by these companies in selling this land with long term leases can only push the price down as they get more desperate.

brty


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## tally-ho (11 December 2008)

Re: 2006 Cattle

Investors have recently received their trading account. It shows an opening of only 2.2 cattle per drove instead of the promised 4 breeding cows.

I found a 4 page Project Summary that was handed out when I bought the investment and on page 3 under Project Features it states:



> "A stocking guarantee confirms that investors' droves will comprise at least 4 breeding cows after the first muster of the project herd during the 2007 calendar year."




They seem to have made a guarantee they did not deliver on. I wrote to the company and to ASIC again. Anyone else who followed up on this or looked into it?

Anyone has asked about what the mix/age of their cattle is? 

The average market price may be about $600 per adult meat cattle, Fresian heffers joined to beef bulls are selling for export to China & Saudi for $1850+gst I have been told.

Has anyone approached the company or succeeded in taking their cattle out, I'd be interested as I have a friend with 68 acres of lush green cattle fenced property who could agist them for me. If anyone has some feedback in this regard, I would welcome a private email to 

odywyss@iinet.net.au


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## Forenth (12 December 2008)

cathadfab said:


> Has anyone else been contacted by Dennis & Co? Does anyone else know what the results of a group action could potentially be?




I have also received a letter from Dennis & Co yesterday. It was very nicely worded and said it would only cost $825 per project if I wanted to join in their claim against GSL. Plus additional costs if any money was recovered but they would be seeking legal costs as well.

I thought we just wanted to halt the vote, but these guys are seeking damages for the poor performance of the projects, accusing GSL of misleading investors. From my prospectus the projects are at the bottom of the projections, which annoys me to a huge extent, but are performing within the limits. Yes, GSL got it wrong but to try and prove it was deliberately misleading won't be easy.

My project, 2000, is pretty certain to be a no vote and $825 / project seems a bit steep especially as I have relatively few woodlots. I can't help but wonder if these guys are just trying to cash in. After all, they can't promise anything will come of it, which is just what GSL said about their share price in the meetings.

Anyone else getting mail from Dennis & Co?


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## prawn_86 (12 December 2008)

Hey guys,

I haven't follwed this thread much, but if you are looking to take legal action, a company called IMF do class actions on a 'no win, no pay' basis if you want to look into that.

Also if you can get > than 5% (or maybe its 10% im not sure now) of voters to agree, then you can call an EGM.

Hope that helps a bit.

Prawn


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## cathadfab (12 December 2008)

Forenth said:


> From my prospectus the projects are at the bottom of the projections, which annoys me to a huge extent, but are performing within the limits.
> 
> It's interesting when you look at the performance indicator chart within the 2006_Beef_Cattle_Investment_update available on the Great Southern website. It shows the three preojection levels for when the cattle were being sold and overlaid are the KPMG forecasts. I question why when the KPMG forecasts are still within the three initial forecasts are they now being used to show that the project is not a good investment.
> 
> ...


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## Grumpy Old Man (12 December 2008)

If you really want to punish GTP, invest with someone else..

A competitor (Rewards Group http://www.rewardsgroup.com.au) is selling high value timber product.  They may be the only company in Australia already exporting MIS teak? - but I could be wrong on this? 

On the blue gum investment side, Macquarie Bank sell a product that may also be worth looking into - appears that for a price similar to GTP, you get the land plus trees - offtake agreements already in place with Australian Paper (rely on reflex!) for earlier products and Midway Ltd in Geelong and Portland who sell to Nippon Paper.

Anyway, have fun - and make your own mind up...


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## irenebrisbane (12 December 2008)

Forenth, we have received correspondence from Dennis & Co.  We have discussed this proposed class action at length and we will not be joining it.  Too many unknown variables in it: What constitutes "additional costs from moneys recovered" (e.g. %?).  "We will seek to recover legal fees from GSL".  Easier said than done.  For us, the number of our woodlots (1998, 1999) would not justify outlaying the initial cost plus the additional costs and possibly legal fees.


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## wooduk (13 December 2008)

is great southern(gtp) still linking up with lignor in 2009 ?, if you go to the web punch in        lignor  and  great southern plantations 2009


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## irenebrisbane (16 December 2008)

Interesting point, Wooduk; Great Southern are deafening in their silence on this or any other issue at the moment.  Maybe this is one of the reasons they so desperately want our woodlots; they have a contracted sale arrangement for next year.  I'm assuming Lignor are off and running.  Couldn't find anything later than 2006 on their web site.  Perhaps I'm not looking in the right places.


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## Forenth (16 December 2008)

The share price has been increasing in leaps and bounds the last few days. The ASX has asked GSL why its share price was at 0.17 and peaked at 0.36 one day before coming back by the close.

So who is paying a higher price to get shares and what do they know that most don't. I'm wondering if someone is trying to push the price up before the investor meeting so it looks like a better offer. Now who could that be? {wink, wink, nudge, nudge}. If that's the case it will collapse when they stop.

In their reply to the ASX, GSL have said they think they'll get at least one of the cattle projects and a significant number of individual offers. No mention of plantation projects. Perhaps they now don't think they'll get any majority votes. if so then HURRAY!


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## wooduk (16 December 2008)

Forenth said:


> The share price has been increasing in leaps and bounds the last few days. The ASX has asked GSL why its share price was at 0.17 and peaked at 0.36 one day before coming back by the close utable
> 
> suggestion--
> ask a friendly broker for afavour,and ask if someone is playing cfd,s-puts and calls or is it a spread,loose change from a share killing from another share trade
> ...


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## Forenth (17 December 2008)

The new information from GSL is now available for each project at asx.com.au. Search for GTP and click on the 'recent' link under announcements.

Its much the same old rubbish as before, 64 pages of numbers with an admission that if the vote had gone ahead 1/12/08 they wouldn't have got ANY project including the cattle ones. They've also admitted that (to paraphrase) they've managed the company into a debt position where they will have to sell assets if they don't get the projects, and they'll likely sell a cattle project in 2009 if they get one.

Who's been auditing these bozos while they've been collecting their paypackets and running the company like this? What a bunch of incompetents, their business model may have been ok in 1998 but didn't they update it for tripling land prices etc? If they keep going like this they'll have to do capital issues or beg for MIS investors just to pay existing investors / debtors. Wall Street just showed us where that leads...


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## wooduk (17 December 2008)

As Churchill said in relation to the Battle of Britain,Quote---It is not the end ,but the beginning of the end.

Does any one know what the number of investors is needed to put new management to replace this lot?

The plantations are viable and no I did not go in scheme to scam the ATO,Lignor has a deal thatcan use gtp gums,but where that is to date considering the latest announcement who would know. this date

I do not mind if gsp pays me as of this date in the absence of a better monetary deal or equivalent a nett sum of$25,000 after all expenses.
Based on my 2003 lots of $15000
I do not think so!


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## slim pickins (17 December 2008)

i have just read the supplementary explanatory memorandum from GTP.
it is a horrendus bunch of incomprihensible drivel. they list a bunch of totally irrelevant figures and reassert that the independent directors support this scam.

the report can be summed up as this: i paraphrase,

"as you can see from our report we are totally doomed. vote yes
we owe too much money. vote yes. 
we have lent people money that we will never see again. vote yes. 
we are operating at a loss of 65 million p.a. (our total net worth on the stock market) .... vote yes. 
we will probably never have a profit again, vote yes.
our interest payments are $80 million p.a., vote yes,
our share price is very low... vote yes
you will incerase your tax liabity with this scheme, vote yes.
you will get nothing out of this but because there is no better offer..... vote yes"

these is a better offer, keep your investment and dont take the shares. 

gtp will be hit by massive lawsuits by investors in the coming months exposing them to huge damages payouts. i reallly feel for the new shareholders if you feel you have been tricked by GTP you may have a legal case against them for trickery and deception. (not legal terms)


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## wooduk (18 December 2008)

BASED on the latest comments_ we need the fin  advisers who advised on the MIS INVESTMENTS to get to together and form a block or aform of advisory council:trust as an entity that can tell us to either get an independant forrester to evaluate and if less cost prohibitive and remove the trees and sell toanother entity where it may BE more profitable than wait for gsp to gouge the trees thatwe own under their management criteria .

Leaving it to gsp would be a disaster especially as the $80 million will soon reach $100 MILLION AND THEN WHAT?


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## slim pickins (19 December 2008)

Wooduk,

i dont think you can just take the trees, that would be breach of contract against GTP. they have management rights and they get a % of the overall sale. the trees are with GTP until the moment they go bankrupt.

one this happens the trees will either be transferred to an new manager or if one cant be fouund the trees will be cut and sold. 

dotn worry about GTP's 80 million interest repayments. that is the shareholders concern. however it would be nice to get some money in damages form GTP before they are bankrupt.

but that bankrupcy is probably a year + away especially since they will get some of the trees from some people. 

dont expect too much from the financial advisors who recommended this. they are keeping very quiet as they want to limit their exposure to liability when the mud finally hits the fan.

if fact for them its proabbly better if people just accept the offer so their investment can just die quietly. notice in the supplementary notice that anyone that acceps the offer automatically gives up any right to sue GTP for anything.

regardign the court carses.... its a tricky situation... a great deal of the legal strategy against GTP will rest on which way the votes go.

lots of people havent voted. its amazing how little some people care abotu their money


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## wooduk (19 December 2008)

I do not understand the apathy of investors,and I feel that most of the advisors have good intentions even though the scheme gives the advisors a $ incentive,but as an investor in these mis schemes this was on a long term basis and to see an investment that I  have put into another gtp tree plantation growing at afantastic rate it really piss's me off. Therefore as another vote does come on then I suggest that advisors should all get together and take these clowns on . Think of it this way--- would you let these jokers walk into your home while you are eating your tea and let them take the money out of your wallet and walk out the door.
The anology may not be correct and it is emotional,but I sure you get my drift,


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## slim pickins (19 December 2008)

wooduk,

if they did come into my house while i am eating my tea and go for my wallet i certainly would not call 911 or 000 or whatever.  i would dispense some old west justice.

gtp will get theirs for this. and the directors. the case that i am organising against them is subject to confidentiality so i cant reallly talk about it to anyone not on board yet but as i contact more investors it will generate more publicity. 

I'll be in australia in first half of january, to deal with this. at the moment my hands are a little tied. but I assure everyone that this will not end in them taking our forests. I will proabably be running this case myself since i am a solicitor. unless of course our good friends at Dennis and Co. manage to grab the bull by the horns in the menatime and turn this good.

by the way if there is a law firm that would like to employ me as a solicitor to run this thing or help run this thing, or even organise and expand the class action please PM me. I'll do it for minimum wage and for the duration of the case only. i have a very good strategy for dealing with this thing. a strategy many (including GTP) may not have considered.


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## fair go (20 December 2008)

*Vote "NO" for shares in Great Southern Plantations*

When I invested in Great Southern Tress plantations schemes 2001,2002, 2003,2004 I was told the following 

  That the investors owned the timber 

  The investors received 95% of the sale price of the timber

  The timber was not harvested until a tree was reached a minimum size      (estimated to occur between 10 and 11 years)

  We will not need to pay tax on the invested monies until the timber is sold

  The forecast although not guaranteed, was published between 6.2% and   10.2% pa return

  This forecasts values each $3,000 woodlot between $5,814 and $8,732

*Halfway though my investment I am now told *

   The value is timber is now actually valued by this proposal @ 3597 shares  @ 50 cents each being $1,798 (I have investments over the years of 2001, 2002 &2003)

 As today’s share price is 32 cents it is now revalued my average woodlot down to $1,150. 

 This represents a huge penalty of somewhere between 80% and 87% of the original published returns.

  If we accept this deal or worst still, if the majority accept this deal, then we all lock in a new value of around 1/6 of the original forecasts

  I note KPMG agreed at a fair valuation being the share price of 50 cents compared to the valuation of the timber.  Who has valued the timber at this very low dollar level and why should we accept this timber valuation?

Assuming that the timber is truly valued at this new low level then KPMG indicated the deal was ok @ 50 cents, then why would we accept a new valuation, of only 64 % of this dollar amount?  (ie today share price, at approx 12 noon on 17/11/2008)

 On top of all this, we will be now required, to pay tax, on average, 6 years earlier that our original investment, and for those that invested in more than one financial year then all tax years will be now be rolled into this tax year being 2008-09.  Some, if not many of us, may not be retired yet, as per the original timings, so we will pay the tax at a significantly higher tax rate.  We also will pay tax, without any related income in the same year.

 If you though that this was not bad enough, then many of us will need sell shares to help offset the tax payable and assuming that buyers will be short supply then the share price could fall significantly from the current level.  If this event occurs then it will further devalue this mess.

*This take over is proposed not by a 3rd party, but by the same organisation that set up this scheme, the same people that indicated tax offsets, positive returns, a fool proof scheme since we the investors owned the timber.*

  I believe the original scheme was a huge rip off, based on making a select few very wealthy, at the expense of the investors.  We are being asked to trust the same people again along with most, if not all, the benefits removed, from the original investors.

  Of course management recommend this transition, is in their interest, but not ours.

  We all need to vote NO and reject this proposal outright.

*Things have got worse during December 2008*

 Now since I first wrote this the share price has dropped to 12 cents this make a mockery of the indicative returns suggested by the independant experts ranging from 6.2% to 10.2%.  The share offer is now worth less than 10% of these indicative figures.  Someone please tell me when an indicative return becomes grossly misleading.  It is my belief we have well passed this point.

I clearly remember that at the road show (I went to three of them) That we were promised that the trees will not be harvested until they reach a predetermined size.  This was estimated to be between 10-11 years.  On the Great Southern road show, when asked this question I was informed by Cameron Rhodes That it is in the constitution that they will be harvested between 10-11 years regardless of tree size.

*I would like to know why if the trees are only 2/3 of their size why were we told one thing and the constitution another?

I would like a copy of the PowerPoint slide show on the 2001-2004 tree plantation schemes, if any one has one.  They were presented to thousands of potential investors and investors in all states of Australia.  Their may still be some finnancial planners who have a copy?* 

I was never told that the accountancy firm and the financial planners received a whopping 10% of all monies invested.  I was certainly never told of this by my accountancy firm 

Now I am a significant investor and I have lost a lot of money and whilst that is extremely disappointing It is now my belief that The financial numbers never stacked up and rip off schemes such as this need far better scrutiny by ASIC.  *

If ASIC don't have the powers at present to prevent schemes such as these then, we as a community, need to make sure they have through our polititians*


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## slim pickins (21 December 2008)

fair go said:


> *
> Now I am a significant investor and I have lost a lot of money and whilst that is extremely disappointing[/SIZE]*




well you havent lost anything unless you have accepted the offer. 

excellent post by the way.... well summed up. this whole thing is such a big deal... it appears that people simply havent grasped its significance. if this thing passes unchecked.. it will certainly create an unparalleled precident. 

its the collapse of the economic system. personal property, real estate, and other ownership interests will not be worth the paper they are written on.

investment will dry up. people will invest only in gold and guns (not a bad investment in my opinion), as it will be the only personal property that will be able to be protected against corporate expropriation. australia will resemble zimbabwe. people wil be begging in the streets. 

if this thing passes, i will be the first to open a company that will by popular vote create a class of owners subject to other peoples votes, and sieze those assets of people.

i'll move to the gold coast, buy the management rights of a small building then slowly enter into a pact with 75% of the owners to convert their appartments into shares of the management company. the remaining 25% will lose their apartment white the others will be directors of my company. when we have taken the remaining 25% of apartments, i will just return the original apartments to my new directors and the apartments we have stolen we can just divide amongst ourselves. easy money.

when they take me to court i will cite the case of GTP v investors and the court will just say.... you are free to go have a nice day.

GTP will be stopped!

ASIC's lack of action is distubing. i cant explain that. the governemt is labor so i dont think we can expect much from them except a budget defecit and more unemployment.


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## wooduk (23 December 2008)

SLIM READ THETASMANIAN TIMES AND THE MACQUARIE PRIVATE WEALTH STATEMENT VERY INTERSTING ON POLITICAL INACTION AND THA TAX ISSUES


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## novice-5 (29 December 2008)

hi,
unsure if anyonecan help, but i have woodlots with GTP and only just recieved (29-12-08) paperwork including voting form, supp-explanatory memo, and pink form we had loan to get trees back in 2001, with small amount still owed to GTP,
when i called 1300 number on memo was told that if i voted YES i would get 3520 (noticed someone had quoted around the 4900 earlier in thread) shares per woodlot price of shares 28.45c after checking up found that they are trading at 17.5c today, i am not too happy getting pushed into this corner by GTP, i tried calling David but could not get through on the mobile number given, if anyone can offer any advise i would much appreciate it,

cheers Peter.


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## wooduk (29 December 2008)

just got another proxyform ,this time a yellow one and a pink one for an acceptance, plus a folded A3 gsmal supplemetary memorandum for 2003 tree lots with stevey cole on the inside.

The date of memo is the 16th. December with important dates ofadjournment for shareholders and investors. 
-------------------------------------------------------------------------

My brief scan indicates that you have to vote again,and that the latest  document overrides any conflict from the previous explanatory notes put out in late october.

refer to 4th paragraph headed letter from gsmal independent chairman,then read the last sentence on the page tittled ,effect of this document.


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## boeingdriver (30 December 2008)

"My brief scan indicates that you have to vote again,and that the latest document overrides any conflict from the previous explanatory notes put out in late october."

Not so. If you read 2.6 of the Supplementary Explanatory Memorandum paragraph two.
Notwithstanding that paragraph I am going to send back the yellow proxy form voting yet again against both resolutions.

The grab for cash by Great Southern is breathtaking and audacious and is against the interests of the growers


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## wooduk (30 December 2008)

I read the same on hotcopper,but I am not backing down that you do not have to vote again, play it safe and vote,,,,still decoding this new doco=


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## ptony1948 (31 December 2008)

I'm glad this thread is here.  Makes interesting reading.  Would have been in the dark as probably a lot of tree owners are.  Initially before coming across this forum would probably have voted for abstained.  Am sending my form back tomorrow voting against it.  Keep up the good work.


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## slim pickins (31 December 2008)

ptony, 

dont forget to tell eveyone you know to vote NO as well!  i'm sure that this delay was designed to sow confusion into an already confusing situation. seems to have worked well for them so far.


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## wooduk (31 December 2008)

]



           I       AM VOTING NO_NO_NO AND STILL NO

                   THEM'S  TREES  IN THE AUSSIE OZARK'S  AZZ  MINZE:flush:


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## Forenth (31 December 2008)

Well isn't the Supplementary Explanatory Memorandum a load of the proverbial. 50 odd pages of more of the same rubbish.

Yes, old proxy votes stand as are, but I'm still voting no again!

Notice at the top of page 38 there are success fees mentioned of up to $3 250 000. So who are these fees paid to, I can't see who. It better not be anyone recommending this scam or that would be a conflict of interest. I wouldn't mind getting over $3 million to talk people into giving away their investments.

By the way, when did our individual contracts for investments ever come under corporations law? After all, that's what GSL say allows them to change our investment contracts to permit a majority vote. I reckon that's more of the proverbial. ASIC aren't worth their multi million $ budget.


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## Grumpy Old Man (2 January 2009)

Reading page 27 of Great Southern Financial Statements 30 September 2008 - appears that they are getting (even more) nervous...


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## Paraty (2 January 2009)

My first post on this forum - thanks for all your informed comments people.
To play it safe I also am going to send off the yellow form again voting an emphatic "NO - NO"


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## wooduk (2 January 2009)

Have a lookat this website
www.wotsnews.com.au/news/ Great Southern plantations


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## remoteone (5 January 2009)

I have also lodged a complaint with ASIC.
This is a con-job of the highest order. GS should put more resources into managing the projects rather than coming up with scams to try to save their arses.

Mines a NO vote. not because I dont want to convert to shares, but because of the grossly understated Project Value AND being forced to pay *$0.50* for shares valued at around *$0.17* !!!

What is ASIC doing ?
PLEASE lodge your complaint with ASIC ASAP !!!https://www.aussiestockforums.com/forums/images/smilies/banghead.gif


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## slim pickins (6 January 2009)

just reading their annual report. page 61 as they have numbered it.( not what the PDF document says.)

last paragraph....i quote

" he directors believe that there is a reasonable prospect of one or more of the scheme proposals, in particular the
proposals relating to 2006 and 2007 cattle projects, will be accepted and also that a number of individual offers will be
accepted. Should the scheme proposals for the cattle projects be accepted, it will provide the Group with increased
operating cash flows, it will enhance the balance sheet through the acquisition of cattle assets at fair value and it will
provide increased flexibility and capital management opportunities from the removal of the MIS project structures. If
successful the directors currently expect that one or more of the Group’s cattle properties will be sold in 2009."


hmmmmmm

so they intend to take the cattle projects and once they have them they intend to SELL the property. at a profit i presume.

wow, thats is! there they are tellign you that they are getting your cattle for peanuts. instant profit from onsellign it.


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## Forenth (6 January 2009)

Hey Slim,

Don't forget that they make a profit on everything from this scam. To pay for any of this they only have to add to their share registry, which must cost close to nothing in comparison to the asset. They're not actually outlaying any cash at all. When you do that then anything you acquire is profitable.

Also, why would any buyer of a cattle project pay fair value when GSL have been saying so clearly that they NEED the cash and are desperate? GSL will dump the cattle project at a bargain price and the cattle industry will know that by now.

So cattle project investors, not only do they want to give you stuff all for your recent investments but then they'll dump it when they get it.


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## Forenth (6 January 2009)

Here's another thought:

Since they need all the projects to vote yes just so they can survive a bit longer, and since they won't get all the projects, then...

This could well become an annual event, The Great Southern Survival (rather than revival). At the end of 2009 all remaining investors in projects from 2004 and earlier will be asked to swap for shares at a price triple the market value. Majority votes and individual offers. In 2010 it will be remaining investors in projects from 2005 and earlier, ad nauseum.

Sooner or later (more likely sooner) they'll run out of investors to fleece.


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## Guff (6 January 2009)

I read somewhere in their annual report that the company has setup an indemity for the Directors, hence the company indemnifies the directors in the case of legal action against them.

So, I guess legal offences that have been discussed here and by others will need to consider this first.


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## wooduk (6 January 2009)

what a rip,apart from some wankers that reckon this is good for them to take the share deal because this is the best that colesy reckons, that's it virtually,then why then is gtp still promoting mis schemes and why are they possibly going to hang onto the cattle and why can not the directors stand on their merits without gsp having to indemnify them against being litigated.
if it is true that the banks have got a caveat,how does the bank gaurantees kick in and save gtp-gsm,what about the debt escalating,big reason not to hand over your investment that you own for shares that will be taxed if youconvert to shares and then you are going to hang on and hope and pray that they will come back,and that is all you have because no body in their right would buy shares that are massively diluted----remember the so called clout if everybody exchanged for shares the investors would have 72% of share holding of a companythat has a debt ratio to assets that is escalating and a massive cashflow problem to the extent that staff are being sacked.can anybody tell me that what that entity in the report that got millions of dollars who they are plus the 4mill that was on aussie forum for one of the dictators === ooops imeant directors


if you read the report as others have reported there is a thread of intimidation on part by the company,with a weak gutless independant reprts from big name auditors and as shown at the roadshow a feeble dcf graph projecting a low return at the time of the grab,that pathetic year 8 simplistic graph with no substance and based on i believe the 1998 scam of trees


there reports are confusing and can be easily mis interpreted,and though there may be conjecture istrongly suggest and urge you to vote 




                                no no no no no no no 

                                just vote no no no no no     




 

tat is what i reckon your  shares will be worth


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## Investor1 (6 January 2009)

To all concerned Forestry MIS Investors,

I am a significant investor in forestry MIS and also have had many years experience in forestry.  I provide below insight from many years in the forestry sector.

It is important not to be emotional about the Great Southern offer and what is the current share price.

Should you vote “NO” have you really understood the issues?  

From reading the commentary of those that intend to vote “NO”, it is generally either because they consider the deal is:

1) too good for shareholders (easily managed for the benefit of MIS investors (see below)); or 
2) they consider they will realise more for their trees by Great Southern failing and the schemes harvesting the trees themselves;
3) you don't like the management.


Firstly, the MIS investors will own the majority of Great Southern if they vote “Yes”.  (See more discussion below).

But more importantly, as Great Southern indicates the proposal brings the following together:

Land 
Forestry management 
Sales contracts 
Harvesting capabilities 
Trees.  (The asset of MIS investors) 


From my years of experience in forestry, the first four are more important than the trees.  If Great Southern fails, the schemes will have to manage the first 4 themselves, but they will not own the land.  A significant risk issue should the trees not be harvested and sold in time.  Remember, the trees must be exported and cannot be sold locally as there are no local markets.

In reality, the schemes will find it almost impossible (that is if it is possible) to sell their trees for any real value.  The schemes will have to arrange a new manager to manage the trees until they are ready for harvest, establish markets in overseas jurisdictions (who will fund and do this?), will need for some projects to develop infrastructure (i.e. port facilities), will need to establish harvesting contracts and haulage contracts, etc, etc.  

Accordingly, the first issue is all the scheme investors will have to dish out more money to keep their scheme afloat.  But how does that work if not everyone wants to contribute more?  Who will coordinate the process?  The last person a scheme investor wants to manage the process is a receiver or company administrator that charges by the hour.

Secondly, the schemes will be dealing with many parties in much stronger positions than they are in.  The schemes will be dealing with professional forestry companies.  Don’t think owning a plantation is simple.  You would not consider running an iron ore mine as basic.  On top of that, the schemes do not own the land.  If Great Southern fails there will be new owners of the land.  How will the schemes interact with such new owners?  I have worked in a company which buys MIS land from failed scheme managers and inherits the trees for free from the MIS investors because the MIS investors thought they could market and harvest the trees themselves.  It is very difficult for scheme members to become an organised “plantation business”.  

If Great Southern fails, the schemes will have to pay a new manager for their services (i.e. additional fees to be paid by the current investors) and those new managers have little incentive to maximise benefits scheme investors.  If it is an existing MIS manager, that manager has priorities in selling their scheme investors’ timber.  If not a traditional MIS company, the new manager has an incentive to maximise their fees.  In addition, the trees may become worthless if the lease term expires prior to harvest.  

I note that a person commented on how Great Southern being a desperate seller may find it difficult to sell the cattle assets.  The forestry MIS investors may find it much, much more difficult selling their tree interests without owning the underlying land and if Great Southern fails.  Selling cattle at cattle auctions are much easier than selling timber direct to a handful of overseas buyers during a world recession.  Seriously, the forestry MIS investors are likely to walk away with nothing like shareholders if Great Southern fails.

BUT, even more importantly, the general view that is coming across is the shareholders are getting a great deal.  If that is the case, and Great Southern’s market capitalisation is $40 million, BUY MORE SHARES!!!!!!!!

Put simply, the MIS Investors have invested more than $1billion for their forestry interests.  The trees are worth what they are worth, either in the hands of Great Southern or the investors (subject to comments above).  If each MIS investor invested less than 5% more (based upon the current share price) they collectively could own outright the company and the MIS investors can take all the gains that the structure proposes for shareholders.

This logic is based upon the simple view (ignoring relative ownership valuations) that the combined value of trees and land is worth more than their separation.  There are other synergies including future carbon valuation benefits and operating cost savings.



In reality, the problem of the proposal is the benefits for MIS investors of the proposed structure have not been explained well enough and MIS investors have been distracted via the falling share price that is not based upon the success of the restructuring.  If the scheme is good for the shareholders, scheme investors should buy many more shares and vote “YES”!!!!!!

 Only vote “NO” if you know with certainty how you will sell your trees for the value you think they are worth or you think Great Southern will survive!!!!!!!!!   The tree valuation on which the share offer is based was determined utilising many assumptions.  The same values may not be able to be realised by the MIS investors acting in isolation of Great Southern.  Factors that can significantly reduce MIS investor returns are:

- Offtake prices for timber.  Only large managers can secure higher prices.  
- Ongoing plantation management fees.  Who will pay for these? 
- Timber marketing costs:  Who will pay for these? 
- Ongoing rent?  If new owner of the land. 
- Harvest costs per m3.  Only large managers can secure lower harvesting costs. 
- Transport costs per km.  Only large managers can secure lower transport costs. 
- Processing Costs:  Great Southern owns 50% of a processing facility. 


IT IS EXTREMELY HARD FOR A MIS GROUP OF INVESTORS TO SELL THEIR TREES AND REALISE VALUE WITHOUT A MANAGER!!!!!  HOWEVER, THE RESTRUCTURE GIVES MIS INVESTORS THE OPPORTUNITY TO ARBITRAGE THE BENEFITS OF THE RESTRUCTURE WITH GREAT SOUTHERN’S CURRENT LOW SHARE PRICE!!!! 

If you consider the scheme benefits shareholders and the offer price is to low for MIS investors, buy more shares.  But if you vote “NO” be absolutely confident how your trees will be sold for value for you.  

I advise:

- Don’t vote “NO” and realise nothing in the future. 
- Even worse, don’t vote “NO”, then have to pay a new manager to take over from Great Southern and then subsequently, realise nothing in the future (i.e. don’t realise a bigger loss). 

Voting “YES” is in my opinion the better option.  The real question is: should you buy more shares in Great Southern to benefit from a possible appreciation in the share price due to the increased assets that Great Southern will acquire? If so, how many more shares?

Finally, if you don't like the management, the MIS investors after the vote will be able to vote out the management and Board and replace them with a completely new team.

If you don't agree with the above, please explain how voting "NO" will add value to your MIS forestry interests.

I have shares in Great Southern.  But, I see the situation as potentially a win for MIS investors if they are also share investors.  MIS investors can by buying more shares be on both sides of the fence and possibly win as a shareholder if shareholders are the winners under the scheme.  

No commentary I have seen above indicates how an MIS investor actually wins if Great Southern fails and the MIS investor has to sell collectively their trees.

I see value in Great Southern in a few years time once Great Southern is significantly into its second rotation of plantation schemes.  In a few years time, Great Southern should not need to purchase as much land annually (i.e. it will be replanting on its owned land).  At that time, Great Southern should be able to repay its bank debt and begin generating positive cash flows.


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## Guff (7 January 2009)

Investor1 said:


> To all concerned Forestry MIS Investors,
> 
> I am a significant investor in forestry MIS and also have had many years experience in forestry.  I provide below insight from many years in the forestry sector.




Sorry, I smell a rat and don't think you're at arms length here - what is your connection to Great Southern??

There is no way you can say in your right mind that this is a good deal.  Firstly GSL has spent hundreds of millions of dollars (probably billions) in developing an unprofitable business.  They overcharged for the development of woodlots and STILL have not achieved it, basically what they have achieved is to run up debt and wipe out all the capital they raised on the ASX - now they want our money to help them continue to do the same.

A huge proportion of funds have gone into management and agressive commissions, you cannot simply say this is a good deal -- its like someone offering you a couple hundred dollars for your new car and telling you its all going to be alright in a couple years.

What that amounts to is 1) accepting your current investment valued today is nearly worthless, and 2) you really like GSL as a compny and you want to invest in its shares.

Accepting 1) may be one thing, but everyone has better things to do with their money than invest in GSL shares, IT IS BARELY A GOING CONCERN!! They're on the brink on liquidation because their cash flow is critical!!  If you accept 1) above then why wouldn't you simply go elsewhere and invest in a company that actually has a strong future?

The ONLY option is VOTE NO, GSL needs to go under and move to a new manager.  "Investor1" is simply a GSL employee, perhaps the forum mods can note the IP and this one can be traced as a misleading conduct by a director or employee.


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## Forenth (7 January 2009)

Investor1, it's really quite simple for me:

My trees after tax are worth over $2600 / woodlot when harvested as per the contract. That's using GSL's own figures (which I have reckoned are within the ballpark using the forester's reports, prices etc) and also using my own individual tax situation. By taking shares I will have around $400 / woodlot, due to:

- low share price vs the $0.50 price minimum GSL are using.
- less than 6 months to arrange any tax implications.

Its not a hard calculation at all. Anyone who disagrees with my figures (for the 2000 project) is free to query how I got them.

Everyone can see that once hundreds of millions of shares are issued to former investors who now have taxes to pay that the market will be flooded and the share price is most likely to drop. This has nothing to do with investor confidence but simply that a lot people with no other semi liquid assets now have to pay huge taxes. Remember this was to be ongoing income for a lot of poeple's retirements. A lot of investors will be destroyed by this. They have to sell. That's a forecast that's easy to make. Usual trade is less than 500 000 shares/day. What happens when maybe 500 000 000 shares are issued?

If GSL don't get the majority then they will still survive long enough to harvest the projects affected. It would be surprising if they didn't. I really don't care if they survive any longer than that. I invested years ago for my own reasons, and for my own reasons I want my return. I voted no because its in my interest. If it coincides with others' interests then we all vote no. If anyone believes its in their interests to vote yes then go ahead. The idea that investors will have to try to harvest and market their own trees is alarmist and unlikely for projects up to 2003. But I wouldn't want to have invested in 2008. 

These are comments I would expect GSL to put forward. Rather than work on any real merits of their scheme (of which I can't find any) they have been making comments of how if we don't vote yes then they will collapse and we'll lose everything, or cattle project investors will have to pay big fees if they vote no. GSL have been saying these things! 

They can run around like Chicken Little all they like, yes the sky is falling but it won't hit their heads until after our projects are completed. GSL will limp through to then thanks to selling a few things, maybe a cattle project or two, maybe some fancy banking agreements and also due to those investors who for some reason have voted for their individual agreements.

For me a no vote is the best thing.


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## Forenth (7 January 2009)

I forgot to add:

GSL will get some assets from individual investors even if they don't get any projects. But if the assets of the company increase this will have no effect on share value. Why do I say this? GSL's own figures show net assets / share have been steady around $2 while the share price fell from $5.00 to $0.17. With all projects being a yes this assets/share would fall to under $1.00. So why would getting more assets and issuing many more shares, diluting assets/share, actually cause share price to increase? It's already proven that it has no effect on share value at all.

Earnings based valuation is important. Since GSL basically have no net earnings they have no net value, which is reflected in the $0.17. Remember the first substantial project to mature will be in 2011 and even that cashflow is unlikely to be enough. Then the following projects are smaller and so even less helpful. But GSL aren't likely to get these projects anyway!

I don't see how getting a few assets, even those they can sell, will help GSL without major restructuring. Is the Managing Director worth his $800 000/year when the company has been put in this position? Maybe the directors can repay their company loans once and for all. Why is GSL loaning cash to directors when GSL has no cash? From the interest received they don't seem to be paying usual interest rates, but I bet GSL is. So it appears shareholders are subsidising the personal loans of directors. Now there's a restructuring that will increase company value.

IF GSL get their house in order and IF they EVER make a profit THEN it might be worth buying some shares, but until a healthy net profit exists then they aren't. This Project Transform isn't going to provide it, investors are just the easiest income stream to grab regardless of how it affects them.


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## Portfolio (7 January 2009)

Investor 1 - thanks for the shareholders view.  Of course you want the MIS investors to bail out the company.  Given you are a shareholder you should step back and take a look at your shares.  I think you have until the 19th of January to sell before you lose the lot.


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## Investor1 (7 January 2009)

________________________________________
Thank you Guff, Forenth and Portfolio for reading my views.

I am a shareholder, an MIS Forestry investor and have no connection with Great Southern as an employee or otherwise.

Two opinions have been expressed as to the future of Great Southern. One Great Southern will survive for several more years and the other, it is all over on 19 January 2009. If the latter view is correct, MIS investors begin considering how to market your timber and cattle for value without Great Southern. As indicated, MIS investors that have invested in more recent years may have even more to loose than shareholders. For example, building a port at Kangaroo Island, Tiwi Islands, etc. As I indicated, MIS investors have invested more than shareholders. But Great Southern currently owns the land.  Once the ports are build the parties that acquire the land from Great Southern after its failure will have the benefits of the infrastructure, not the plantation MIS investors that need the facilities in order to sell their trees.  No facilities and no timber sales.

Also, currently shareholders have about $50 million of market cap at stake, but collectively MIS investors have way over $1billion invested.

As an MIS investor, even with reading the valuation reports, do you really understand the timber market and how to sell timber?  Like equities, commodities have experienced significant volatility in recent times (consider the price of oil over the last 12 months). 6 months ago you may consider if you had interests in oil projects, your interests were worth $X, but today they may be substantially less.  Not all timber is worth the same, nor is its price always the same (like oil).  For example, location relative to markets impacts transportation costs and fuel costs impact transportation costs, etc.  So, what the valuation facts were in the past do not necessary reflect the valuation facts of today or tomorrow.  Particularly, if you don’t have the marketing capabilities to sell timber and particularly if you will have additional costs to incur!!!  Also consider the volatility in BHP and Rio.

In my view, Great Southern has potentially a very valuable asset in its very large forestry land bank. The other assets (cattle land and horticulture projects) have no interest for me. Sell them.  In my view Great Southern should never have entered into such projects and the cattle projects and horticulture projects are bringing everyone down in my opinion. 

The forestry land bank may become very valuable in the near future. Particularly, now that Australia intends to introduce the Carbon Reduction Pollution Scheme by July 2010.

I recommend you read the ABARE Report October 2008 "Analysing the economic potential of forestry for carbon sequestration under alternative carbon price paths."  It is easy to Google the report.  As the carbon price increases over time the value of the carbon in timber also increases.

Basically, Treasury sees in the future forestry as a carbon sink to significantly outperform many forms of agriculture and timber as an investment. Great Southern with its land bank is well placed to benefit under a carbon constrained world that imposes significant costs on carbon pollution.  Politically, a significant issue regarding MIS has dealt with the land use and it being acquired from traditional farmers.  A carbon regime will increase the transformation of agricultural land to forestry land. 

By unwinding the schemes, Great Southern shareholders (including MIS investors) collectively can own the net assets of Great Southern. The company can sell the horticulture and cattle projects. Offer the cattle and horticulture MIS investors the right to buy their land from Great Southern or together trade sale the assets.  

Again, it is my view the sum of the assets (land and trees and assets to be sold) is greater than Great Southern’s market capitalisation and the sum of the MIS investors’ interests, even if Great Southern’s debts are included.

As indicated in my previous comments, if people are so concerned with the management of Great Southern, after the restructure call a shareholders meeting and replace the Board and management. MIS investors will control the vote. All the high salaries can thereby be eliminated for the future.

THE BIG ISSUE is nobody really is coordinating the story.  Based upon the views expressed above, many later MIS investors will be burnt if Great Southern fails.  Collectively, potentially much more than Great Southern shareholders!  What are those MIS investor groups (i.e. annual groups, 2005, 2006, 2007, 2008) doing to maximise the future value of their investment?  Including considering how they will fund infrastructure for ports and ongoing management.  If they are not organising themselves now when many of you seem excited that Great Southern will fail, will these investors organise themselves quickly enough when bank receivers are appointed?

How certain are you that voting “NO” will benefit the vast majority of MIS investors, including yourself?

It is certain many MIS investors do not like the management but they can be replaced in the future.    

In addition, if Great Southern can be revalued overtime to reflect net assets (including the realisation of the trees for their value), MIS investors may receive over time their proportionate value in the assets via share appreciation.  That could result in the future gains being subject to the CGT regime rather than income tax.  This may provide for the CGT 50% discount on the gain or may enable the ability to utilise capital losses to offset the gain.  In this regard, if Great Southern is getting trees at a significant discount to value, Great Southern may increase in value by that amount.  

I guess the issue is whether Great Southern has any hope of survival.  

If it has none, then in addition to just saying vote “NO”, rally the troops now and determine your strategy of how you will sell your trees in the future.  Be certain voting “NO” does not mean seeing both Great Southern and the MIS investors failing.  Based upon my reading, many of those that recommend vote “NO” still consider Great Southern will harvest their trees.  Others, who see Great Southern failing, have not indicated how they consider they will realise value for their trees.


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## prawn_86 (7 January 2009)

I have no finacial interest in GTP, but why would anyone accept/buy soemthing for 50c when its currently worth 17c?

No economic sense. I would rather lose any invested money or at least have a chance of selling it myself then doing that


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## Guff (7 January 2009)

Investor1 -- you are still not getting the basics fact.  It would be FAR better to buy the shares at 17c or GSL raise further capital - why do you think GSL won't do that (again)?  Probably because that has happened many times before, and for much more capital raising than this.

Why not buy more shares you ask? Because the company is poorly run and the business model has not worked -- it is unprofitable.  Selling assets, and in this case aquiring trees as assets and selling those, plus the land is then un-encumbered and sell that -- will NOT make GSL profitable.  It is simply selling assets to meet cash flow requirements.

I'm sorry, the only thing to do is VOTE NO as far as I can see.  Even if we have to pay someone the management fee (we have to pay GSL management fees every year), it would be better to get another company to harvest and sell -- FAR better than paying 50c for a 17c share.


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## Investor1 (7 January 2009)

Thanks Prawn_86 for your comments.

Exchanging forestry MIS interests for GTP shares is not identical to paying 50cents for a GTP share.

After the exchange the GTP share will have an interest also in the forestry MIS interests transferred to the company.

I think this is an important point.

Let’s ignore GTP’s offer.

If all MIS investors vended their shares into a new company that currently had 2 $0.01 shares for 99.999999% of the shares post transfer, would that mean they were receiving $0.01 or less for their interests.  No, they are basically transferring an MIS interest in a scheme for a share in a company with the plantation assets. They would be receiving their proportionate interest of the value post transfer, not the value of a company share pre transfer.

As I indicated before, MIS investors will have the majority of the company post transfer.  Would their decisions be different if they had 99.9% of the company rather than 70+% post transfer?

MIS Investors are likely to need to be prepared to invest further money to manage their MIS investment should Great Southern go into liquidation.  The amount could possibly be vast (new managers, new contracts, infrastructure spend on ports and roading to enable harvesting, possibly new lease agreements, etc).  These costs generally must be incurred pre harvest revenues, particularly as to receive harvest revenues the trees must be harvested and exported.

These additional contributions may not even be recoverable from future timber proceeds if the MIS investors cannot manage the process well.

However, collectively, the MIS investors based upon the current market value of Great Southern could do an absolute take-over of Great Southern for circa $50 million.

The argument for voting “NO” proposed by Prawn_86 would indicate he considers the deal is too good for the shareholders and Great Southern is not receiving any appreciative value for the injection of the MIS interests.  If the deal is good for shareholders, become a shareholder and buy more shares.  Or the MIS Investors together do a take-over of Great Southern.  

In any event, the MIS Investors should consider themselves currently the majority owners of Great Southern based upon the offer being made by Great Southern’s management.  

MIS investors should recognise this situation (after the restructuring) rather than think they will loose their forestry interests.  

In the future, MIS investors will need to work together if they intend to sell their trees without Great Southern.  They will have to establish a leadership team and manage their plantations within the terms of their leases.  Would it not be easier taking control of Great Southern and replacing the management of Great Southern.  By taking control of Great Southern you access control of the land bank and timber markets established by Great Southern.

It is my view, MIS investors will have a better capability of realising value for their forestry interests collectively if they:

1.	Own the land
2.	Have access to plantation management
3.	Timber markets 
4.	Harvesting capabilities
5.	Etc.

I may be a shareholder, but MIS investors practically own Great Southern under the proposal and may by voting “NO” reduce the value of their own beneficial interest.  I think MIS investors will loose much more than Great Southern shareholders.  We are to be significantly diluted in any event.

Rather, than think it is us versus them, think of it as how to maximise value for MIS investors. 

Maybe, the solution is wait for Great Southern to fail and collectively try to buy the assets from the banks’ receivers.  However, I do not believe the MIS investors are organised enough to achieve such an outcome. 

Again, in my opinion combining the company and investors' assets adds value.  

I don’t believe MIS investors will really gain should Great Southern fail, particularly based upon the offer, the MIS investors are practically the majority owners of Great Southern.


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## Forenth (7 January 2009)

Investor1, what are your views on:

- Those investors who are at or coming up to retirement with large MIS investments and will have large tax liabilities to pay this financial year, and

- The effect on the share price if they have no other option but to pay this tax by selling their newly acquired shares.

In this instance they will no longer own GSL shares to benefit from any increase in share price. As Guff as said, any realisation of value from project acqusitions will only go to pay interest, salaries, and sustain cashflow.

You mention carbon trading. My understanding is if you plant a tree you get credits, you harvest a tree you lose credits, ie. only those trees currently standing have credits. If you simply cut it down and replant a new crop your carbon trading is stagnant. Relying on an unproven and still nonexistent carbon credit system as a source of increasing value is just that, unproven. Should we wait years to see if any value at all comes of it as value to GSL shareholders?

GSL said a lot of things when they were selling these projects. My prospectus talks glowingly about the future carbon market however years later there has been no value added as there is no carbon market. Whether its 2010 or 2050 investors shareholders can't rely on if's about what might happen, when they actually have timber on the ground. GSL promised a lot and didn't live up to any of them. Now they promise again and this time we can see the problems. Bad business model, bad management, no cashflow, undervaluing our investments and then charging 50c for 17c shares.

I prefer to wait for GSL to harvest my trees and then if at that time they have a profit I might buy shares, at 17c.

You say if GSL are getting a discount on the trees then GSL shares may increase by that amount. They're getting that increase from investors' pockets! We already own that value right now. Why should we risk it on the share price increasing substantially? By substantially I mean four times. KPMG's break even price of 40 odd cents doesn't work for me. The directors collectively have tens of millions of shares, they stand to benefit personally from our donation of value. Their promises about share price increasing have no basis other that speculation. They still have a bad business model, bad management, and will not have sufficient cashflow.

Without big changes within GSL they will survive to complete our projects and then who knows? Completing the projects is what matters to most of us who have to vote. At the investors meetings no one was asking how can we help the company or shareholders, they were asking where is our investment?

If carbon trading and land assets make shareholders rich then good luck to them, but that's a risk I'm not willing to take. My view is GSL shares won't make anyone rich other than those who get bonus issues. Even those dilute the share value.


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## Investor1 (7 January 2009)

Guff,

I understand your position.

I think it is better for MIS investors to take control of Great Southern (i.e. even without buying more shares).

After MIS investors have the majority vote, vote out the Board and management. 

It is practically better than appointing new MIS managers for each scheme post the failure of Great Southern.  The MIS investors also will have control of the land.

Great Southern's debt is high, but combining the trees with Great Southern's assets should enable the debt to be managed.

Trying to manage separate schemes without ownership of the land will be awefully difficult.  It is likely the lease terms will expire for many of the schemes prior to the schemes being able to appoint a suitable alternative manager.  Do you really know the cost of managing each scheme without Great Southern?

Take control of Great Southern and in time, replace the management team without the fear of lease terms expirying.


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## prawn_86 (7 January 2009)

This whole thing reminds me of the saying:

"If you cant dazzle them with brilliance, baffle them with bullsh1t".

Which appears to be happening here. If it was a good comapny thier shares wouldnt be floundering and have had heaps of rights issues etc. Seems to me management just want to keep their cushy overpaid salaries for a bit longer


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## Investor1 (7 January 2009)

Forenth,

Thanks for your enquiry.  You have made some very good points.

I will respond to them via a number of replies.

The first comment I would like to make, which seems to be lost in everyone's interpretation of the offer.

If the MIS interests collectively are worth $398.4 million and 816 million shares are issued, why will Great Southern's share price remain at $0.17.  That would value the injection of $398.4 million in additional assets as only incresaing the value of Great Southern by $138.7 million.

The share price today does not necessarily reflect the value of Great Southern post restructure.

If Great Southern received $400 million in cash today, the market would be valuing Great Southern at a different share price.


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## Grumpy Old Man (7 January 2009)

Investor1: 

1) You repeatedly suggest that a tree owner will have more market power as GTP are the landowner.  No matter who owns the land, I understand that the tree owner has the same rights - the scheme & scheme manager have the same obligations and powers irrespective of whether GTP survives or falls.

2) Every major plantation growing region in Australia (other than Kangaroo Island, Tiwi Islands) are already well serviced by export woodchip companies that offer competitive stumpages to growers - and almost all include harvesting operations and planning.  This includes two operators at Bunbury WA, four in Albany WA, one in the Green Triangle for hardwood (and two for softwood), two in Tasmania (5 mills), and one in Geelong, Eden, Newcastle and Brisbane.  To suggest that growers would have trouble marketing wood is simply ridiculous, and if as you suggest you have involvement in the industry, is also seriously misleading.

3) If a grower owns shares, rather than trees, and GTP fails, the grower loses everything.  If grower retains trees, then they have a marketable product that just received the biggest % annual FOB price increase in 2008 for over 10 years.

4) You suggest that there is no domestic processing of plantations in Australia.  Also ridiculous, and misleading.  Australian Paper own a pulp mill at Maryvale - within 100km of Great Southern's Gippsland estate (Reflex copy paper).  FEA own a hardwood plantation sawmill at Bell Bay, within close proximity of many of GTP's Tasmanian plantations.  Ta Ann have developed a rotary veneer mill in NW and SW Tasmania close to several large Tasmanian GTP plantations.  There is currently new investment in domestic mills in WA, the Green Triangle and N NSW in HW plantation processing facilties.

I do not own GTP shares, or woodlots, but have been following this thread and "doing my own research".  The sale of logs or chips from HW plantations in Australia could not be easier to arrange.  I am not so confident about Kangaroo Island or Tiwi Islands, but everywhere else GTP have trees is in existing plantation harvesting regions and there are companies like Gunns, or WAPRES amongst others, that I am certain would happily work with growers to resolve a commercial harvest and processing or export arrangement for most if not all plantations.

DYOR & dont believe this GTP spin.


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## Grumpy Old Man (7 January 2009)

Oh and I forgot Norske Skog in Tasmania and Albury, plus Visy Industries at Tumut NSW.

Sure there are others.


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## Forenth (7 January 2009)

Increasing assets of a company doesn't increase share price because those assets aren't making any money. Not yet. They're costing money to be maintained. They will only make money as they're harvested in future years, and the net revenue generated isn't that great compared to GSL's debt and low cashflow. If I recollect correctly they have interest payments greater than most project returns. These assets will be harvested and money used to keep GSL running, not to return to investors and not to reduce debt. It just disappears.

Also, to obtain these assets investors are not getting as much as they would as investors at harvest. Why be happy to be given $50 for a $100 investment just to hope that helps GSL in the future and then that flows back to me? Again my example: To help GSL with their cashflow I forego a $2638 post tax return for a $398 one (per woodlot). Then hope GSL don't spend it all when harvested just to keep themselves afloat. That does leave me with nothing.


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## Investor1 (7 January 2009)

Forenth,

Based upon your situation, I think you should seek advice from a financial planner or accountant regarding how you can manage your tax liabilities this financial year and in future financial years.  

They may also be able to assist you in determining what may be the required future share price for you to break even or for you to be ahead relative to holding onto the MIS interests and awaiting harvest (i.e. consider the logic raised by KPMG in their opinion).

From your comments, you may not be 100% certain as to which option is in fact better.

However, the lower the market trades Great Southern's shares, the more the market may be assuming Great Southern will fail in the near future which could result in MIS investors having to manage the process themselves.   Managing the process themselves may involve contributing additional funds in the near future.

If Great Southern survives into the future and, if the injection of $398.4 million in new assets adds value in Great Southern by even say $300 million rather than the equivalent of $0.17 per share (i.e. $138.7 m), acquiring additional shares may assist in an investor's return calculation and what could be a break even position.

Naturally, acquiring additional shares involves funding considerations and investors should seek advice regarding the same.

Carbon and trees is a complex issue, but Great Southern's estate may be able to generate significant credits and at $20+ per tonne that may be substantual.

If you are an MIS investor in more than one scheme, you could also consider voting differently for different schemes.  It seems to me that the longer before a scheme is to be harvested, the greater is the chance Great Southern will fail before that harvest time.


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## Investor1 (7 January 2009)

Grumpy Old Man,

Thanks for your research comments.

1)  It is important to differentiate between hardwoods and softwoods.  For example, the Norske Skog and Visy facilities process softwood and not hardwood woodchips. 

2)  It is important to understand the cost of transport and its interaction with stumpage prices.

3)  If there is only one or a few processing facilities near where a plantation is located, the plantation owner can often be a price taker, particularly when there is an economic downturn.  

4)  MIS companies such as Great Southern, ITC and Timbercorp have been developing processing facilities and export facilities.


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## Investor1 (7 January 2009)

As many of you consider a vote "NO" for tree investors is the way to go. 

What is the your view for cattle MIS investors and why?


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## Forenth (7 January 2009)

Investor1,
I have crunched the numbers regarding my situation, I don't require advice as its all straightforward. Voting yes will wipe out the large majority of my returns.

With regards to acquiring assets improving GSL's value, their share price is already independent of assets/share as already discussed. It reflects their lack of earnings. Any earnings from project acquisitions will only cover cashflow deficits and not add to shareholder value. 

I have little doubt that GSL will survive to complete several more projects after the 1998 project which is complete, or close to. So to me the question of investors having to harvest and market projects isn't likely, at least until after the 2003 project is complete. I do have confidence that GSL's management will sweet talk banks or someone else to let them live at least that long.

One question that GSL will have to ask themselves is: After this whole process in put to bed one way or another, what investor will ever invest with them again? What financial advisor will recommend a product that the manager then wants to seize and therefore ruin his/her reputation?

GSL have sown the seeds of their own end.


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## Grumpy Old Man (7 January 2009)

Investor1 said:


> Grumpy Old Man,
> 
> Thanks for your research comments.
> 
> ...





Hi Investor

Irrespective of the fact that you have missed the point - in your earlier message you suggested that there are no domestic processing facilities in Australia - notice that you have ignored FEA sawlog mill, hardwood sawmills already processing plantations in NSW and SE QLD, the Australian Paper pulp mills at Wesley Vale and Maryvale - and maybe check your facts a bit better in this regards to Norske Skog and Visy!  The Norske Skog facility in Tasmania processes both hardwood and softwood for newsprint.  The Albury facility and the Visy Tumut facilty use softwood for pulp production and hardwood for boiler fuel (admittedly the price is low).

In relation to transport distances and stumpages, this is true - and given that GTP have facilities only in Bunbury and Albany, it is difficult to see how within 2-5 years they can possibly hope to process the plantations they have established for export in Green Triangle, Gippsland, Geelong, NE Tasmania, NW Tasmania, Tiwi Islands, Kangaroo Island, Bundaberg and Lismore without utilising the facilties owned by third parties.  I imagine that the cost to GTP and growers of developing their own infrastructure in all of these places would be hundreds of millions of dollars, even if access agreements could be negotiated.

The grower is already a price taker with the GTP scheme anyway.  And they are completely at the mercy of GTP to negotiate on their behalf - and guess what, under the GTP model, the same company that manages the plantation, is responsible for harvesting, haulage, port management, shiploading and price negotiation.  

I understand from earlier comments that GTP charged something like 10% commissions on the way in.  What commissions and overheads will GTP take off the top in each step of the process of harvesting and export?  Not much I'll bet!!!

And I wonder what they charge their growers for this privelage where they do use their own infrastructure!???  

Admire your willingness to present the information that you have as it has certainly generated some interest - but for goodness sake, get real!


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## doctorj (7 January 2009)

I've always felt that GTP's real business model had absolutely nothing to do with trees or grapes or whatever. It was just a means to generate a cash flow to fund the building of a very large property portfolio. Any money made was quickly leveraged and reinvested in the acquisition of even more property.

This is great as long as the property prices continue to go up. The trouble is that land in parts of the world suitable for going trees is limited. In many parts of the world, they were the market for property, so while they were buying prices were going up. And they were keen to buy as long as they could arrange financing for it. Now financing is harder and there are no buyers willing to pay anywhere near what GTP did for land.

This causes refinancing to become more difficult and the danger that as land prices fall is they will find themselves in a negative equity situation.

The question is if GTP was unable to run a profitable business in their current form, how will the trees help? It'll help the net asset position, but from a profit perspective, the reality is many of the older schemes have yielded considerably less than forecast, with many schemes lucky to make their original investment back. There is a rumour that GTP 'topped up' schemes from production outside the land dedicated for the scheme to help boost returns and get the original investment back - this is nice on a scheme level, but if the trees were brought into GTP, it becomes a zero sum game (or even negative sum as I bet these supplementary trees are grown on more marginal lands and therefore yield even less).

I also can't help but wonder if this is a management buy-out by stealth. How much interest does the board and the senior management have in the schemes? What would be the % of shares held by related parties if the proposal went ahead? More importantly, are growers that are related parties allowed to vote on the proposal?

On the issue of land ownership, for the tree schemes, growers interest in the land is arranged by forrestry lease (though, I understand the terminology and form of the agreement varies from state to state). Would the lease survive the failure of GTP? I suspect this could even vary from state to state. 

Provided its not an issue, surely the schemes are sufficiently large to attract another manager - particularly in areas like the green triangle where necessary infrastructure is in place.


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## hodgy (8 January 2009)

Hi Guys Happy New Year !
So much angst. 
My financial adviser refused to advise me on this matter, even tho i pay a fee for his services and he receives a commission from Great Southern.

I have 2007 Cattle. 4 droves - small time.
No one seems to discuss the cattle much. I voted NO. However  I have been in Europe for six weeks and now understand the vote has been delayed till Jan.
This is a big pile of **** for me. I made an investment based on advice I paid for only to be told I was on my own.
So whats the best advice?
Rgds Hodgy


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## oldblue (8 January 2009)

Hi hodgy.

I don't know anything about GTP but my first move would be to demand my "advice fee" back from the "adviser" on the grounds of non-performance of contract. If you make enough noise you may at least get a small return, plus a heap of satisfaction!


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## Joe Blow (8 January 2009)

hodgy said:


> So whats the best advice?




Hi Hodgy,

It is illegal for anyone here to offer you any financial advice. If your current adviser wont advise you in this matter then I suggest finding another one who will.

Feel free to discuss the pros and cons of various options or scenarios but a forum such as ASF is not the place to be requesting or offering financial advice. It is for general discussion only.


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## Investor1 (8 January 2009)

Morning All,

I note everyone's comments on "Profitability". Profitability can turn around very quickly and I can comment in depth on that, but immediately:

Great Southern's bigger issue I understand is "cash flow".  

"Cash flow" in the short term may be dependent upon 3 things,

1) MIS sales
2) Asset sales
3) Project Transform.

Forenth considers Great Southern will survive until the harvest of the 2003 scheme trees. If that is likely, then I consider they will survive beyond that date.

Great Southern has a number of cash flow issues until it is into 2nd rotation use of its vast forestry land bank.

The issue for Great Southern in my opinion was it was not charging enough to investors, selling too many woodlots and then having to buy land in a very short period of time. That land had a significant cash cost to Great Southern and often they paid for land greater than the cost they were charging MIS investors (particularly after paying tax on MIS sales). Therefore, whilst in expansion mode they were significantly cash flow negative due to acquiring land.

Having said that, Great Southern now has a very large land bank and it would be very expensive for anyone else to acquire such a land bank, even if rural property prices were to fall substantially.  Ignoring other considerations and why in a few years time Great Southern may be profitable, if I was a large Carbon Polluter (i.e. possibly a power station, a steel processor, etc) I would acquire Great Southern in a few years solely as a Carbon Abatement exercise.   

In 2008, they restructured their forestry offering, to be similar to structures previously offered for many years by MIS managers such as Macquarie Bank and others. In my opinion, that structure was more tax and investment efficient for both MIS Manager and Investor.  That reason is possibly why Great Southern tried to adopt the structure.  But unfortunately the ATO issued a Tax Alert in the year Great Southern endeavoured to adopt the structure and the ATO did not make the alert easy to understand. Also, the ATO refused to provide a Tax PartIVA sign off on the structure.  Maybe, the ATO was concerned with the scale that Great Southern could bring to the adoption of that structure. It was also after the ATO decided to attack outright MIS which they lost in Court recently. That tax alert and the ATO's anti-MIS stance may have reduced Great Southern's 2008 forestry sales.

In any event, provided Great Southern can survive a few more years and continue MIS sales, Great Southern may have about 10,000 hectares per annum of land available for replanting (i.e. MIS scheme land harvested and available for replanting) without the need to purchase that amount of land.

If that is correct, Great Southern may improve its annual cash flows by about 10,000ha * $8,000 or $80 million per year. That cash flow may address much of their annual interest expense. 

By 2015, Great Southern's 2nd rotation available land may increase even further (i.e. estimated harvest of 36,000ha). From then onwards, it may have minimal CAPEX for land acquisitions and as such, may be generating significant cash flow. 

If Forenth is correct and nobody will be investing in Great Southern's products into the future (i.e. 2009), then it may default on its Bank covenants towards the end of this year. In which case, Great Southern may not be around to do any harvesting in 2010 and beyond.

It is my opinion that MIS investors and shareholders in reality should be working together to maximise the value of their various assets.

I accept Grumpier Old Man's comments, however the subsidising of sales revenue by Great Southern for MIS investors may be an example whereby Great Southern is actually working for the benefit of their MIS investors and not maximising margins at every level.  Vertical integration, particularly when dealing with your own wood may increase the value of stumpage for the integrated entity. 

Regarding local scheme investors acting alone without Great Southern in realising value for their trees, I provide this brief comment.  FEA (in whom I am also a shareholder) in Tasmania in respect of its saw mill can in some respects be considered a monopolistic buyer of wood in the region. FEA is also likely to process its Grower MIS wood in priority and also the wood it is committed to purchase under its long term wood supply agreement.  It may be difficult negotiating with FEA a highly profitable stumpage price for scheme investors’ wood, particularly if a prolonged world recession continues. FEA may desire to maximise its processing margins, particularly if demand for timber to construct housing in Australia continues to decline.  If the offered price to Great Southern MIS investors is not accepted initially, the plantation wood may not be sold.  If as a seller you have a lease end date and then you loose your timber (because you do not own the land), negotiations may not be overly pleasant.  Similarly, FEA and ITC have to a large extent control of the Bell Bay wood chip export facilities.  The price an independent plantation owner may receive for wood delivered there may be influenced by the plantation owner’s alternatives in selling the wood and the demand for wood chip from overseas.   The more plantations that Great Southern has near Bell Bay, possibly, the better for FEA shareholders.  I note ITC has entered into a long term processing contract with Great Southern’s export chipping facilities. 

Many other forestry regions within Australia do not have highly competitive timber purchasing markets. Throughout Australia, sellers of timber may have only a few buyers to negotiate with.  Again I state, if as a seller you have a lease end date and then you loose your timber (because you do not own the land), negotiations may not be overly pleasant.


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## Grumpy Old Man (8 January 2009)

Investor1:

again, you appear to be trying to mislead investors in relation to comments regarding Bell Bay.  

In the Bell Bay catchment (north of Launceston), there are two woodchip mills operated by Gunns, one woodchip mill operated by Artec and a woodchip mill operated by SmartFibre (ITC & FEA).  There is also a hardwood plantation sawmill operated by FEA.  These mills are all within 10km of each other.

So that is five mills actively and agressively competing for wood supply.  

Also, Gunns are proposing to build a massive pulp mill in the middle of these other woodchip mills that already exist.

How can you possibly suggest that FEA/ITC have a monopoly buyer position in that catchment?  

You need to do some homework on the industry.  Get real.


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## wooduk (8 January 2009)

Investor1 said:


> Morning All,
> 
> I note everyone's comments on "Profitability". Profitability can turn around very quickly and I can comment in depth on that, but immediately:
> 
> ...




              maybe gsp should sue the taxation dept,and recover what is lost in the 2008 plus the on going decline of the share price plus the litigation  that is proceeding plus the projected share price in this climate can not meet,plus the recommendations that ausie stock saidwas a good deal in the circumstances 

bythe way did aussie stock recommend  ABC and Timbercorp ?

            If you have the latest voting form then I SUGGEST YOU VOTE I know what I sent back and that is a big fat


                                           NO !!!!!!!!!!!!
    ALSO DO NOT I PAY CGT, PLUS WHAT IS LEFT I AM TAXED AT THE MARGINAL RATE ? if I accept this wothless deal


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## Investor1 (8 January 2009)

Grumpy Old Man,

I think it is excellent that you are presenting your direct and clear views on the Australian timber market and industry for the benefit of those MIS investors that need to make an informed decision on how to vote.

Accordingly, I would most welcome your views on the following questions:

In your opinion which structure is likely to realise the greatest stumpage after all costs for the plantion owner:

1)  Great Southern if it owned, harvested, transported and marketed the wood
2)  MIS Investors: if Great Southern owned, harvested, transported and marketed the wood
3)  MIS Investors:  if they owned and had to arrange with third parties the harvesting, transporting, and marketing of the wood?

Do you consider the fact the MIS investors may have a finite lease term as an issue for the forestry MIS investors in realising value for their wood?  Particularly, say the schemes that are to be harvested in 2010 and 2011.  Do you think it will be easy for them to realise the forecasted values in the valuation report?

Can you recommend a party or several parties that the MIS forestry investors should approach to assume ongoing management of their plantations should Great Southern fail?  Provide reasoning for your recommnedation.  

Do you think Great Southern MIS investors will need to contribute additional funds prior to receiving harvest proceeds should Great Southern fail?  If so, what additional funds may the investors need to contribute towards (i.e. new plantation manager cost, infrastructure costs of plantation roading, port facilities, harvest planning, marketing contracts, scheme adminitration fees, etc)?  How much is it likely to be?  For Forenth, how may that work if he has limited cash available towards maintaining his project interests?

What do you consider are the risks to MIS forestry investors should Great Southern fail?  Do you consider they should be indifferent?


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## prawn_86 (8 January 2009)

Investor1,

What other stocks do you have holdings in? As your analysis is very in depth and if it is that in depth for other stocks it could be useful for ASF members.

thanks

Prawn


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## wooduk (8 January 2009)

investor 1

               are you suggesting that gtp went under,that the investors would be gouged by another management team?

if that is the case,would not there be a fire sale and the land purchased would be sold off at a cheaper rate at distressed seller rate to recover monies?

think this over, my trees that I  own have a  carbon sink value,the coppice that gsp reckons that I am not entittled to have the option of on going in the coppice would still have a carbon sink value.

the point Iam making is why do we have to cop another manager,when if the price is right WE the investors take the trees AND LAND collectively and pay what WE reckon it is worth and get an agreed entity that may even be one of our investors and do it ourselves

this is  a concept  that big companies freak out at,the audacity of us peasants to contemplate this idea.

BUT there is more the investors can have more diversification and value with on going coppice that gtp have taken off us ,hey when the dust settles us retirees can run the show with very sharp toe-cutters(accountants) and start the investment portfolios ourselves


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## Grumpy Old Man (8 January 2009)

Investor1 said:


> Grumpy Old Man,
> 
> I think it is excellent that you are presenting your direct and clear views on the Australian timber market and industry for the benefit of those MIS investors that need to make an informed decision on how to vote.
> 
> ...




Investor1:

As per earlier commentary, ASF is not a forum for providing advice to investors.

However, when you suggest that the MIS owners would be 'on there own', my understanding is that the scheme manager RE and management rights would most likely be sold to a third party in the event that GTP were not able to fulfill this function?

In much the same way, I understand that ITC took over the role of RE for the APT growers in the early 2000's.  

In the case that growers had to vote in their own RE, there are numerous reputable consulting forestry organisations in Australia that I am certain would be happy to represent growers as an independent marketer for wood and logs.  The Institute of Foresters of Australia (http://www.forestry.org.au/) can provide a list of Registered Professional Foresters who could provide a service to growers.  Also the Association of Consulting Foresters of Australia (http://www.consultingforesters.org.au/) may also be useful.  Several larger consulting companies in Australia include

1) Poyry (http://www.poyry.com.au/);
2) URS Forestry (http://www.ap.urscorp.com/_business/index.asp?BDY=5);
3) GHD (http://www.ghd.com.au/);
4) Fifth Estate (http://www.fifthestate.com.au/)

I also understand that sales of wood to export mills and domestic mills by third parties happen all over Australia.  It would appear to be the exception, rather than the norm that export or domestic mills own all, or even part of the forest resource that they process.

The main reason seems to be that the core business of a processor is not growing forests and vice versa.

As to which model will provide the residual stumpage to growers - I imagine that this is normally dependent upon the location of the plantation in relation to the nearest processing facility.  This may or may not be via GTP.


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## Investor1 (8 January 2009)

Wooduk,

What I have been endeavouring to do is make investors such as yourself consider what would be your strategy going forward.

I am not sure why many of you are Great Southern MIS investors because you generally don't like the GTP management.

Firstly, Wooduk, in my opinion if you as a group were organised you would vote "YES" call a shareholders' meeting and implement changes.

I could provide ideas.

However, I generally don't believe the MIS investors are organised nor really understand the financial dynamics of the foretry industry (even if Grumpy Old Man would imply I know very little about the industry).

Would MIS investors organise themselves to acquire the land as well as incurr all the other costs?

Will the land really go for a fire sale price? What is a fire sale price?  Will all MIS investors in the scheme contribute the same amount of additional funds towards acquiring the land and ongoing management?  How will you agree on the new management team?

Your suggestion is likely to result in a change of relative interests for at least some MIS investors.  If Forenth is concerned with tax on $400 per hectare, how much will he contribute towards buying the land which is not tax deductible?

How will you as  group value the land? Can you compete with a large corporate that may want to use the land in the future for a carbon sink?   

IT may be easier Voting YES and sacking the management, or even once taking control of Great Southern structure an organised break-up and liquidation of Great Southern.

What I don't understand is, the offer provided to MIS Investors is to take "CONTROL" of Great Southern.  Therefore, you collectively are the management of Great Southern post proposal.

Maybe the real issue, on all sides of the fence is "VALUATION".

Maybe, very few people in this exercise unerstands a whole range of valuation issues, including understanding why Great Southern's share price is at 17cents.

How certain the MIS investors can realise the valuation numbers if they had to manage the process themselves?

There has been within the last year significant volatility in "Valuations" in what may be considered more organised markets than a group of MIS investors taking control of their forestry MIS interests.  Consider over the last 6 months the following valuations:

1)  Oil
2)  Aussie Currency
3)  Iron ore
4)  Shares (including GTP).

I consider managing your plantations is more difficult than you think, and probably will cost more than you think if Great Southern fails.  That is ignoring my views on how easy it will be for you to sell your wood for a high price.


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## Investor1 (8 January 2009)

Grumpy Old Man,

I acknowledge you know the timber industry.

I would be suprised if you don't have an interest of some nature in the sector.

Grumpy Old Man is correct, MIS investors should do their own research.  

I hope you MIS Investors can access some of Grumpy Old Man's real insight to the facts of your situation.

Either Great Southern will survive or as many have indicated will fail in the near future, including one person advising me to sell before 19 January 2009.

The question really is, how will you mximise your future wealth?

I wish you all well.


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## prawn_86 (8 January 2009)

Investor1 said:


> The question really is, how will you mximise your future wealth?





As someone with no current financial interest in MIS or GTP i know that my wealth can be maximised far better by NOT investing in either of these co's. Much better money to be made elsewhere, such as an assured return in the bank.

Management are really shooting themself in the feet imo, as potential new investor will steer well clear as its all 'ifs' and 'buts' and 'maybes' when in times like these people want clearly defined.


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## Smirkin17 (8 January 2009)

Hi Guys and gals......I am new to this website and noticed GTP.  While I have read the information below...most of it bad news, I would appreciate it if someone could provide their opinion on my situation.  

I purchased 8 woodlots in 'high value timber' project 8 months ago.  At the time, I was advised that if the seedlings are not planted within 12 months then the contract is void and I can receive my investment back.  Reading all the comments in  relation to GTP's current transformation, i was wondering if anyone was in a similar position, or had some view on what I should do 

Enjoy the comments


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## Forenth (8 January 2009)

Investor1 seems to have misunderstood my earlier comment. I am not concerned about tax on $400 per hectare, I am more than annoyed at GSL's proposal that I swap my $2638/ woodlot after tax value for a share issue worth $398 /woodlot after tax. Doesn't that seem like a rather large loss? That's got no if's, it would happen. I don't want to be a GSL shareholder, I would buy BHP before GSL. If I want GSL shares I would buy them now at 17c.Woodlots were supposed to be 1/3 of a hectare as well.

Investor1 seems to demonstrate the same changing of the wording of questions and then answering that different question, as happened to John Hassen's letter to investors which was then rewritten by GSL before they answered what were then their own questions. I believe John's questions went unanswered and some completely ignored, which were perhaps the most relevent of all.

I still ask: 

- What about those investors who are at or coming up to retirement with large MIS investments and will have large tax liabilities to pay this financial year, and

- The effect on the share price if they have no other option but to pay this tax by selling their newly acquired shares.


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## Investor1 (8 January 2009)

Forenth,

I cannot offer you tax advice.

I do wonder whether the tax deduction of your MIS investment was included in your consideration (i.e. did you have a large taxable income that year)?  Would you enter into a MIS project ever again, including this year?

I do not consider a GTP share with interests in many forestry MIS interests is the same as a GTP share without interests in many forestry MIS interests. GTP will be a different entity after the restructure and will be valued by the market after that date.

Your comments that the share price of GTP may be low because of many MIS investors needing to sell their shares indicates you don't necessarily believe the stated market price of a share at any particular time reflects its fundamental value at that time.   

Thus your implied views such an overhang may depress the GTP share price should also mean 17cents is not necessarily the long term fundamental value of GTP post restructure.  You may consider the market does not necessarily value companies at all times equal to their true fundamental long term value.


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## Forenth (8 January 2009)

Investor1,
Those are not the questions I asked and not answers to them.

I am not asking for any advice, on tax or anything else. I am asking for your views on share price as we have all been discussing for weeks. The current share price does not yet factor in any effect of investors selling shares as these shares have not yet been issued, if they ever are. The current share price reflects the overall average view of the financial market of GSL's value and possible future earnings. They don't seem impressed.

I am not saying the share price may be low as investors have to sell shares, I'm asking your view on the future direction of price if it is their only source of revenue to pay the capital gains tax they would incur. The shares issued could be 800 million, something like 2000 times an average day's trade. If a number of investors have an urgent need for cash then the effect on share price would be detrimental. You don't agree?

As for long term value that is something entirely in the eye of the beholder. I don't see any value realised from these projects ending up as long term value in the company. The cashflow deficits will use these up long before any second crop will be able to contribute anything. Second round plantings may not incur land purchases but still require all the maintenance costs that GSL have been saying in their plantation reports are so expensive. I would not be surprised to see GSL sell cleared land to keep funding themselves, as low as that price would be.


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## Investor1 (8 January 2009)

Forenth,

I have no actual view on what the stock market is actually thinking regarding the future value of Great Southern.

Comments, if I had a share that may have originally cost me $5, and the share price is now $0.17.  I would sell it and crystallise a CGT or revenue loss of $4.83 and therefore generate the ability to shelter many future gains.  I would have plenty of time to buy it back even if it began to rally again.  The capital loss generated could be worth over $2 to me.

If I was another investor in the same situation, I may not like to rally the share price too quickly, as I too may want to generate some capital or revenue losses.

Also, GTP is now not in the ASX 200, so many funds need to exit GTP due to the terms of their fund deed.  This overhang may depress price for a period. Maybe moreso than new MIS investor shareholders having to sell to pay tax.

GTP does seem to do more than 100% of its shares in turnover per year.  So a reasonable share of GTP's shareholders are traders and not necessarily long term capital investors.

GTP's Management and Board have indicated in their public documents they may not be a going concern by the end of the year and there are risks it will fail its Banking Covenants.

I think the risk of them selling less MIS has increased this year due to people's interpretation of the offer and the fact the share price has fallen, like so many other company' shares.


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## brty (8 January 2009)

Hi,

I've been a keen observer of this thread for quite some time, and I am chuckling away at some of the things that 'Investor' is saying..

such as....



> I think the risk of them selling less MIS has increased this year




Ya think?? A person would have to be mad to take up a MIS from a company that is screwing over investors in older schemes. Care to give the name of any FP or accountant that recommends them now???



> The issue for Great Southern in my opinion was it was not charging enough to investors




I think you mentioned $8000/ha somewhere else, yet the industry standard cost for planting is about $1500/ha. Yet elsewhere you acknowledge that the initial schemes harvests have been subsidised by including 'other' trees to give an adequate return.
Your arguments smack of someone with a great deal to gain by selling the 'yes' vote, and probably a lot to lose by a 'no' vote.

The price of land in the Green triangle has doubled in the last ~4-5 years because of the buying of the timber companies. Dairy country in this area will fall in price due to falls in the prices farmers will get for milk (20%+). With the timber companies trying to offload 'assets', land in particular, then the 'value of this land can only fall.

What you say is a good deal for MIS holders, is only a gamble. The choice is between swapping for shares, that might go to zero anyway, or hold on and sell the timber to another party to realize some return that will certainly be worth more than zero, and likely worth a lot more than ~$398 worth of GTP shares.

Also judging by what goes on around here, there is not much 'management' going on in the woodlots over 2 years old. (I live in the green triangle with quite a few of these treefarms nearby)

brty


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## sugar3157 (8 January 2009)

Hi I have just discovered this thread...I bought 9 lots of trees in 1999 at $3k per lot and they are supposed to mature next year. Does anyone know whether I will lose or make a profit on these. I do not understand what is happening to GTP...please help...thank you...


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## Grumpy Old Man (8 January 2009)

sugar3157 said:


> Hi I have just discovered this thread...I bought 9 lots of trees in 1999 at $3k per lot and they are supposed to mature next year. Does anyone know whether I will lose or make a profit on these. I do not understand what is happening to GTP...please help...thank you...




As to whether your woodlot investment will be profitable or not, I suggest seeking independent advice from a forestry consultant.  Institute of Foresters of Australia, or Association of Consulting Foresters of Australia can provide one for you (Google either one).

A majority of others on this site seem to believe that accepting GTP offer of shares for your woodlots would result in a signficant loss and that you should vote NO to their current scheme proposals.

But do your own research and make your own mind up.  I have no view either way - and your decision will (and should) be determined by your own personal circumstances.


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## Investor1 (9 January 2009)

:dunno:

Brty,

I actually am not sure whether I will end up better financially with a "YES" vote or a "NO" vote.  (I may at a later date provide details regarding my trading views).

However, I do honestly believe for the MIS investors they are better off that Great Southern does not fail and probably will make a better return via accepting the offer (I do consider the share price is likely to appreciate if the restructuring succeeds and some time in the future I am sure many other companies in the ASX will begin having an increased share price).  I do consider the offer was made at an unfortunate time.  I am not certain the shares would be trading at $0.17 if the offer was made 12 months ago.  

I consider Great Southern is not likely to fail until at least after June 2009, but that does not mean they will be harvesting the trees expected to be harvested in 2010. 

I wonder how many are voting "NO" with the expectation Great Southern will actually fail.  I don't believe they really know what that means for their MIS investment.  

I also consider the MIS investors should give KPMG at least a degree of professional respect and that KPMG may actually be providing a geniune opinion. Before anyone accuses me of being connected with KPMG, I have no connection with KPMG.

Again, I don't consider MIS investors should consider they are being screwed over when they are being basically offered 70+% of Great Southern for their trees. They are rejecting their ability to manage the business.  Yet, they generally consider they do not need Great Southern.  Maybe each of the Schemes should pre-empt the Bank receivers and offer to buy the land from Great Southern in advance.  However, I am not sure leadership has developed amongst the scheme investors. Otherwise, that person may be stating vote "YES" and lets sack the management.

Possibly, everyone's returns could actually be improved via enabling the harvesting revenues be distributed by way of a fully franked dividend from Great Southern.  It has a huge amount of franking credits available. 

Finally, a thought for Forenth to ask his accountant,
1) Take the KPMG market valuation assessment
2) Sell your trees to your wife. 
3) Taxable as income on market value
4) Your wife keeps the trees until the trees are harvested and realises future appreciation in the value as a capital gain.

Could such a concept improve your retirement returns?  Even better, could you sell your trees to a DIY Super fund?


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## wooduk (9 January 2009)

brty said:


> Hi,
> 
> I've been a keen observer of this thread for quite some time, and I am chuckling away at some of the things that 'Investor' is saying..
> 
> ...



Hayyyyy brty go easy on my tree investment,I like the place and the people are great and when I become a mini gtp I expect to be able to come there  
and sit in the shade of the blue gum tree.


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## Forenth (9 January 2009)

Investor1 said:


> Finally, a thought for Forenth to ask his accountant,
> 1) Take the KPMG market valuation assessment
> 2) Sell your trees to your wife.
> 3) Taxable as income on market value
> ...




My accountant is still laughing over this scheme. It could be some time before she can finally hold a straight face. Selling my trees to anyone at current market value, which is close to full value since the project is mostly complete, does guarantee that anyone will have all tax liabilities rolled into one year. That's just not going to work for me and as bad as GSL's scheme. Also any capital gain in value of trees will be minor from this point. This would only be of any benefit those whose projects are about halfway to harvest by giving them 2 different years in which to pay their tax.

If the belief exists that investors can't organise themselves to sell and market their projects to another agribusiness or mill if GSL fail (which I don't think they will), then does anyone believe they can organise themselves to vote out management if they become shareholders? One kinda excludes the other with a degree of certainty. Remember Cameron Rhodes (and perhaps others) have a 12 month severence payout. I wouldn't mind getting $800 000 to be told to get out. Either way he wins, but who would give him a job after the history of GSL?

GSL's share price has been falling long before any world financial crisis happened. It was falling during the boom times too. It reflects GSL's overall poor performance. This is also reflected in GSL's topping up of early project returns.

As for KPMG, they are paid by GSL. Does anyone believe that if they had decided to say this was a bad deal that GSL would have published it? Or would they have gone to another mob and another until someone said yes. I wonder what Price Waterhouse would have said as a former director of them has said this deal is crazy. That's John Hassen by the way, a pre 2000 GSL director as well. He's probably the most knowledgeable and financially experienced investor in any project and I've spoken with him personally. Everything we discuss on this forum is just a part of the problem, he can talk almost endlessly of the problems and losses this creates for investors. But when my accountant tells me the same stuff then I reckon its accurate.

GSL have some investors who have agreed individually, they think they'll get a cattle project to sell so they'll be around for a while. I believe GSL talking about failing and investors getting stuck in the mud is scaremongering such as GSL have tried to do in its literature and informations sessions. Anyone else at those sessions get 90 minutes of GSL diatribe followed by only a few minutes of investor questions before they packed up and left? Bit one sided just like the recommendations of their 'independent' directors who all have lunch with the rest of GSL's directors. The same as my wife and I are 'independent' when we have lunch.

I know what this offer is and when it looks like it and smells like it then I'm not going to believe GSL when they tell me its roses. Basically, this whole thing relies on a huge improvement in the share price of a company that has demonstrated its inability to do anything right or achieve any of its goals and forecasts to its investors, or provide value to shareholders either.


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## Investor1 (9 January 2009)

Hi Everyone,

I cannot help myself as at least some people seem to be reading what I write.

So further thoughts:

1)  Best Reason For Voting "NO" I have heard.

A friend of mine is in the 2003 scheme.  He initially wanted to destroy Great Southern due to the offer.  Anger, but I don't think really well founded.  He may have contributed the offer as the major reason for GTP's share price fall.

Anyway, his thoughts now are:

"Ideally, you want every other scheme to vote "YES" and yours to vote "NO".  "

I think that has sense.  He considers the trees are worth more than the share offer, however he does not consider he will be better off if Great Southern fails and his "Scheme" will have to manage the process themselves.

2)  My view as worst preferred option for an MIS investor of the following 3 options:

a)  Great Southern manages the tree harvest and marketing and I remain an MIS investor
b)  Exchange trees for shares.  
c)  Great Southern fails and the MIS scheme manages the process.

Option c would be my most least preferred.

Therefore, I may vote "NO" but I would minimise the amount I am slagging off the company.  I would like the company to survive as a minimum until after harvest date.

3)  I would not like to have been a client of Opes Prime.  What liabilities would MIS investors have to a liquidator of Great Southern?

4)  Grumpy Old Man knows more than me about the forestry industry in Australia.  Is he being helpful to enable you to make an informed decision?  Maybe not.  Regarding valuations, can he help you by giving you guidance on next year's timber prices?  Please, Grumpy Old Man provide some real commentary for these genuine MIS investors.  I note you commented how in early 2008 there was a very large increase in export timber prices.  Many things were looking good at the beginning of 2008, but are not necessarily expected to look great in 2009.  There are many variables in making a future valuation assessment of the value of plantations.  As my wife would say to me, "It is not always what you want it to be".

Grumpy Old Man, have you an interest in the forestry sector?  Or seriously, as you previously indicated, your knowledge is just because you liked reading this thread before I commenced contributing?

5)  Do I really think MIS investors are being screwed by GTP.  I am not sure I believe a person is being screwed when the offer is basically:

"take over my company and keep the value of the trees in the company you are taking over".

6)  For Grumpy Old Man who refers regularly to the Institute of Foresters.  One major issue for them is not many young people are applying to study Forestry at university any more.  I think if Great Southern fails and also MIS forestry sales across the board are low this year (possibly made worse by the likelihood of horticulture projects being again available), even fewer young people may desire to become foresters in the future.

7)  If Great Southern fails, rural employment cannot be particularly benefited.  Nor land prices.  Some in the rural sector may consider that is a good thing.  It may however not encourage Bank's to be overly supportive of lending to the rural sector in the near future.  I am not sure if I was a farmer I would like rural prices to fall, unemployment to increase and bank's to become less supportive.  For many it may be a bit like being a retiree and seeing their super balance fall because of falling share prices.  It also may be like seeing your house fall in value, if you lived in the city.    

8)  Who I consider may end up owning the MIS investor land?  Not MIS investors.  How will they manage a competitive bid for land?  Who will they trust to manage any further contributions they will need to make in order to bid for the land?  Amongst many other issues.

9)  Will lower rural prices significantly improve the likelihood of local farmers acquiring their neighbour's property if a neighbour is financially forced off the farm?  Maybe not. Lower prices for top quality farm land may encourage a lot more off shore investors searching for cheap rural land anywhere in the world. Particularly, if the Aussie dollar keeps falling.  Bank's may also not lend to the Australian buyers. Offshore investors also may have much more money to develop their farms in order to be worldwide competitive.  Competition in the various agricultural sectors may actually get worse for the smaller traditional Australian farmer.

10) People who I don't think are respecting the "Aussie Stock Forums"?  Those people who are neither MIS investors or shareholders and are not adding any valuable thoughts to this thread.  Stupid worthless comments makes me wonder how are they respecting the Forum or their fellow members. 

9)  Who will gain out of the situation?  Whether it is a "Yes" vote or a "No" vote?  Hopefully me.  But you don't anyway believe any of my thoughts.


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## Grumpy Old Man (9 January 2009)

Investor1 said:


> 1. Please, Grumpy Old Man provide some real commentary for these genuine MIS investors.  I note you commented how in early 2008 there was a very large increase in export timber prices.
> 
> 2. have you an interest in the forestry sector?  Or seriously, as you previously indicated, your knowledge is just because you liked reading this thread before I commenced contributing?
> 
> 3. For Grumpy Old Man who refers regularly to the Institute of Foresters.  One major issue for them is not many young people are applying to study Forestry at university any more.  I think if Great Southern fails and also MIS forestry sales across the board are low this year (possibly made worse by the likelihood of horticulture projects being again available), even fewer young people may desire to become foresters in the future.





Investor1:

All of the information posted by me on this site is freely available on the Internet via Google.  Not sure how perceived involvement in industry would make any difference anyway?  If you have any concerns regarding info presented regarding industry, feel free to check it. 

Who knows what the future price for export chip (or any other product will be)?  Historical information on commodity pricing is freely available via ABARE (www.abare.gov.au) - this includes hardwood and softwood woodchips.  Shows a rise in prices every year since 1999 - but will this hold true this year?  Your guess is as good as anybody elses.

In terms of forestry enrollments, not sure how that makes any difference or is of any relevance to this thread?


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## brty (9 January 2009)

Hi investor1,

From the annual report, explaining how GTP could become insolvent.....



> or should the 2009 MIS sales result be low




I quoted this several hundred posts ago.

I believe that the chances 2009 MIS sales being low is very, very high. I noticed that you have not replied about this aspect.
That in itself is a good enough reason for most MIS holders to vote NO.

brty


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## wooduk (9 January 2009)

just to break the theme a little bit,does anyone know what lignor ltd is getting from gsp?

I have noticed that gsp was to supply 200,000 tonnes of timber for value adding to make or process into timber structural beams and that a multi million dollar processing plant was or is to be used in Albany WA.

The latest I see is that the timber is now being sourced from another grower called ITC,reading this on the web I get the impression that this company Lignor can not get enough of the primary resources, that is trees and that they are or will approach independant growers,which I assume are local small growers.

The statement says that the future looks bright and this is 2009

So the question that I am asking,is gsp providing the 200,000 tonnes plus filling the order books that it has contracted for pulp with the Japanese.


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## Investor1 (9 January 2009)

Hi brty,

I refer to my comments earlier:

"My view as worst preferred option for an MIS investor of the following 3 options:

a) Great Southern manages the tree harvest and marketing and I remain an MIS investor
b) Exchange trees for shares. 
c) Great Southern fails and the MIS scheme manages the process.

Option c would be my most least preferred.

Therefore, I may vote "NO" but I would minimise the amount I am slagging off the company. I would like the company to survive as a minimum until after harvest date."


Restructuring may not require Great Southern to rely predominently on MIS sales into the future.

If Great Southern fails, what I am trying to indicate is existing MIS investors may have an additional cost should they desire to harvest their trees.

As Grumpy Old Man indicates, we can all have a guess as to the future value of timber.

Those that vote "NO" and don't understand the timber market risks may have to spend more money to manage their trees going forward.  They may also find out their trees will not generate them enough money to cover their additional funding.

brty, maybe if Great Southern is going to fail soon, as you imply, is take any money and run the best option?

At least Forenth has adopted a clear position, Great Southern will not go bust prior to his trees being harvested.

If you are in the 2003 scheme with a harvest date in 2013 are you also taking such a position?  How prepared are you to contribute additional risk expenditure to determine whether you will realise value for your trees?  How much are you relying on the valuation report, when you at the same time are not relying on the KPMG recommendation?

As Grumpy Old Man indicates everyone needs to do their research.  But, unfortunately, freely available research regarding future timber prices and plantation operating costs (harvesting costs, transport costs, processing fees are not that readily available), even on google.  Nor the costs of bringing the MIS investors together.

Again, how certain are the MIS investors about the real future value of their trees?  The valuation report was provided to them by the same party they don't trust regarding any other information.

Or should they take some money and run, if Great Southern is to fail within the next year or so?


In my opinion, the fact it seems Great Southern has generated such a bad PR position as a result of the anti Great Southern campaign, and MIS sales may be negligible, is even more reason to accept the offer.  Or quickly research what it means to them if Great Southern fails.  As I stated earlier, by all means vote "NO" but don't actively campaign to destroy the company until after you have received your harvest distributions (i.e. until after your trees have been harvested).

It is unlikely 6 months ago you would think oil would be about US$40 per barrel today.  I continue with the view, other than wishful desire as to a value for their trees,  the MIS investors have not really analysised the value of their trees to them should Great Southern fail.  I would propose the outcome may for many be a negative value relative to accepting the offer.  If Great Southern fails, they are likely to test their views by a request to fund more expenditure.  

I also think funding a law suit is not much value if you think the company is broke either.


I think my comments regarding:

"As I stated earlier, by all means vote "NO" but don't actively campaign to destroy the company until after you have received your harvest distributions".

By the No vote campaigners not adopting such a position, I think they are not acting logically and thus, don't think they are doing themselves any favours.


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## Grumpy Old Man (9 January 2009)

GTP released an information sheet on their website in 2008 called "Understanding Your Investment Returns".   (http://www.great-southern.com.au/Plantations_Investors.aspx)  

Having read this carefully, I believe their summary of the value of the trees is pretty good - in that it gives a range of possible outcomes for all the variables - certainly seems consistent with other information that is freely available.

GTP explained that the worst case scenario return to growers for their plantations would be $1630 - $4010 per woodlot by harvesting and selling the trees.  Best case is significantly higher.

Brty etc, what do you reckon the share offer is worth to you under the 'best case scenario'?  Realistically?

Could investors look at it as the difference in these two numbers (worst case stumpage less best case share value) x the total number of woodlots out there, as the amount that investors can afford to spend on consulting advice and representation independent of GTP?

Any estimates of this number from the peanut gallery?


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## Investor1 (9 January 2009)

Thanks Grumpy Old Man for your input.

There are also additional variables including a discount for time value of money and GTP's deferred management fee percentage, etc.

But that is a great starting point.

MIS Investors in assessing share price should also consider whether the injection of assets will actually add value to the share price, overtime.  This is the point KPMG may be trying to indicate.  It may not be the price on any particular day that counts, but the price the shares may trade in during the period from acceptance to what would have been the harvest distribution date.


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## Grumpy Old Man (9 January 2009)

Investor1:

You seem to be ignoring three pretty fundamental things:

1) Shareholders & not MIS growers are responsible for GTP debt (current liabilities plus interest bearing loans around $1.1bn at 30.9.08 according to GTP);

2) Share value is a function of the number of shares on market - current proposal would massively dilute pool of shareholders;

3) New shareholders - many of whom would sell to liquidate their new asset would push share price down further (for short to medium term anyway);

Ultimately 70% * $0 = $0

GOM


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## Investor1 (9 January 2009)

Grumpy Old Man,

You have disappointed me so much.  

You have been so technically correct until now.

I had so much respected your input up to this time.

Now, you let yourself down with 3 simplistic statements. 

I was going to comment on each of your statements in my lengthy way, but you have just disappointed me so much I am too angry to respond.


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## drsmith (9 January 2009)

Those three simplistic statements are very valid.

If GTP has got itself into a position where it needs the physical MIS assets, whose to say it will manage the value of those assets any better than existing shareholder capital. 

While the MIS assets in the hands of GTP would keep it alive for longer, the nature of the new relationship would in my view be parasitic.


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## brty (9 January 2009)

I do not own either shares or woodlots, I have stated such earlier on in this thread.

I do however have knowledge of the MIS industry and live very close to many 'woodlots' from various companies.

In this area (where I live) there would be no trouble selling the trees to be harvested to other companies.

The market is valuing GTP shares (the offer) much lower than the price expected at harvest, less all associated costs. As an investment, current MIS holders would be better off paying $400 to buy some shares in GTP and voting NO (gives a bit each way), rather than just voting yes.

Really investor, Why should someone give up $1600-$4000 value for just $400 worth of shares?? If you want $400 worth of shares, just buy them and keep the higher valued trees.

brty


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## Wally1952 (9 January 2009)

I know I haven't posted much here, but I am looking from the sidelines with great interest and reading every post. There were many of us from my employ that entered into this, and similar schemes, many years ago from advice given by a financial advisor. I was lucky, or unlucky as the case may be, I only bought into bluegums. Many of the others got involved with tea-tree oil, lemons, grapes etc and have been subsequently burned! I am relaying the relevant info that is posted here to my friends. I'm afraid "Investor1" they all have the same opinion as I do, and that is, they smell a rat! They feel you are pushing the "Yes" vote a little too strongly to be totally independant of Great Southern. I bought into GS and have 12 woodlots. It was to provide a few years of holidays for my wife and I after retirement. I doubt that is the case now. I DO NOT want their shares and neither do my friends. In fact some are getting so sick of this company they would be happy to see it go under! I would rather not see that happen, but as some say "they are a bunch of crooks"!


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## Portfolio (10 January 2009)

Investor1 said:


> Hi brty,
> 
> I refer to my comments earlier:
> 
> ...




Hi Investor,

I personally dont think you are a MIS investor.  The big winners out of this are the shareholders and employees / directors so i'm pretty sure your one or the other.  However if you are a MIS investor:

Option A above is not possible.  Great Southern will go under if it is not bailed out (if you dont believe me read the notes in the annual report under "going concern").  The banks will not touch them.  No investor would invest in any capital raising.  Surely you understand this.  

Therefore your choice is between B and C.  

BUT I would also aay that i personally think that this discussion is moot.  It wont get up.  GTP will go to the wall and someone will pick over the assets.  
Shareholders and Employees will be the losers - and so they should be as this is capitalism and the weak fail.  MIS investors will be ok - ok meaning that they will get their timber harvested (if only by the buyer of the land through a liquidation sale that needs to harvest the trees to get the land back to commerical use)  but now realise how bad a decision  it was to invest in MIS through GTP in the first place.


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## irenebrisbane (10 January 2009)

I think "Investor 1" just spat the dummy.  Methinks Investor is pushing the Yes vote a bit too strongly not to be aligned somewhere/somehow with GSL.


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## Fatcat (10 January 2009)

irenebrisbane said:


> I think "Investor 1" just spat the dummy.  Methinks Investor is pushing the Yes vote a bit too strongly not to be aligned somewhere/somehow with GSL.




100% agree irenebrisbane. 

Being a cattle investor I am ropeable with those grubs at GTP on so many levels . One thing is for certain, the company has no future whatsoever. How could any financial adviser with an ounce of credibility ever again recommend a GTP "investment"?


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## Investor1 (10 January 2009)

Wally1952 stated:

"Many of the others got involved with tea-tree oil, lemons, grapes etc and have been subsequently burned!".

I am pleased MIS investors are of the view and happy with the knowledge that GTP may go under.

I am still of the view that you have no idea what to do after that date.

I also do not think people understand that a share plus a forestry interest is not the same as a share prior to the forestry interest.

That is like saying a company with $0.17 in cash today and then someone puts in $0.50 of cash/assets for a share, and the new share issued is $0.17 cash.


Based upon your attitudes today, I wonder whether you made a more informed decision when you actually became an investor in the schemes.

I have no relationship with Great Southern (management or employee).

However, I have been involved in buying up failed MIS investor project land in the past. Probably will be again.  My experience, the trees often end up being forfeited to the new land owner.  The MIS investors often do not organise themselves, nor are they often prepared to inject additional money.

In my opinion, it makes so much more sense for the MIS investors to take-over Great Southern, sack the existing management (even if you have to pay them out redundancy payments) and take-over the land assets.

Unless, you are that much of the view, Great Southern cannot survive even with the forestry interests.

Anyway, maybe a deal will be done with the cattle investors and Great Southern will survive to harvest your trees.  

brty, if you read my earlier comments, I considered that if MIS investors thought the deal was so good for shareholders, then at $0.17 they should buy more shares and win by becoming a shareholder.

As scheme investors are so eager to see the demise of Great Southern, MIS investors should stop complaining and begin planning their future when they may need to go alone.  Even better, they should already be searching for their new MIS manager.  Have you?  


Regarding pushing the "yes" vote, maybe I honestly believe it is the right choice.  I have seen the aftermath of schemes with failed managers before.    

It seems to me emotion and wishful desire that the trees are worth alot is the reason for the "NO" vote.

In my experience with buying failed MIS land, we offered some investors a sizeable amount of cash a hectare to the investor land lessees.  Naturally, they did not accept it.  They assumed it was not value because we were making such a cash offer.  Let's say, I believe they wished at a subsequent date that they took the money.

I suggest you consider, what would you accept to sell your interests?

Also, remember, GTP's shares were not $0.17 when the offer was made.


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## drsmith (10 January 2009)

Investor1,

I won't speculate about the motivation behind your point of view but I will suggest a careful analysis of the information contained in this thread from page 57 onwards.


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## Wally1952 (10 January 2009)

Investor1 said:


> I am still of the view that you have no idea what to do after that date.




Honestly Investor1, many of the people I know that have GS MIS investments have really given up on this company. Many feel they have been deceived, originally thinking they had a good investment. They are bitter and are quite happy to see Great Southern go to the wall, I kid you not! All are certainly voting NO. What happens after if they do fold they don't care. They would not give the Directors the satisfaction of a win, and it would be a win for them if the vote was YES. The several I know that attended the meetings could not believe the arrogance of this lot!


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## wooduk (11 January 2009)

Investor 1

could please calculate what the current PE is,then just give me the forward projection you would expect if all participants agree to sell for the share deal


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## wooduk (11 January 2009)

wooduk said:


> Investor 1
> 
> could you please calculate what the current PE is,then just give me the forward projection you would expect if all participants agree to sell for the share deal




Apologises Investor 1, I would like to know from others in the forum also.

even from the broker especially.


 not even I reckon after the 19/01/09


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## ThePav (11 January 2009)

Investor1 - very amusing dummy spit earlier, not sure what inspired that but it did make you look silly.

I have been reading this forum for sometime and it seems to be getting a little bogged down in the YES v NO vote. From the information that has been released to date the trees offer is dead in the water, the required 75% is not going to happen. The cattle on the other hand is still to be decided with the 75% not yet achieved. Will this happen? This should be known at close of business on Friday when all the proxies are collected. Given the information released to date they will not get any projects over the line. We are just awaiting final confirmation of this.

What will happen next? The company is bound to tighten the purse strings significantly which will be to the detriment of all projects. Is a manager that is in financial crisis desperate for cash going to manage these schemes to the benefits of investors? Or is a new arrangement going to maximise returns? I think this whole situation could be a blessing in disguise. One issue that has become clear with the current arrangement is that there is a lack of accountability and poor corporate governance. No one is working in the interests of scheme investors and no one is being made accountable. 

A board that genuinely represents investors and requires operational managers to be accountable for their decisions is the only way these projects can maximise returns. The only way this is going to be achieved is if a new manager is found / created with the correct governance structures put in place. I am not sure how this is going to happen but it is what ALL GS scheme investors should be trying to achieve. Lets take control of our investment and distance ourselves from the GS wreck. 

As a note it continues to amaze me at how much the executive of this company are getting paid? I read the annual report with amusement again this year. I always thought that reward was meant to reflect performance. If this was the case they would be getting the minimum wage.


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## goodie3shoes (11 January 2009)

Clearly you would have to be insane,mischeavous or have a vested interest to support the YES vote and ,I suspect,Investor 1 is part of the GTP PR Group that has been appointed and is being directed by the two GTP 'head kickers' Rhodes and Butlin.It is interesting that the 'London Barrow Boy' who created this monster ,John Young sold a truck load of his shares when the company had its last stock issue.
The model is broke and never really worked.GTP paid too much for land and the running costs are ludicrously high.Not one of the many MIS schemes promoted by GTP have provided results consistent with promises or even matched the 'Independent' experts concensus.
You would have to be a fool to let these overpaid incompetants continue managing this or any other company.
Who,seriously could say YES to this proposal? A 1998 Woodlot investor is being offered $783 for his lot!! 4606 shares at 17c for something he paid $3,000 (plus GST and insurance).AND he will have to pay tax this year that will possibly be more than the $783!!
I am a 2006 cattle investor and I am offered $1,005 (5910 shares at 17c) I paid $5,000 (plus GST and insurance) for these cows.Plus,of course, I pay tax whether I sell the shares or not.WHY would anyone accept this pittance for our cows that we know can be trucked to the nearest abbatoir and get at least double?
But Investor I (or his puppet master) throws in the red herring suggesting that GTP have all the facilities,contracts etc and they are just about the only game in town for us poor wooducks.That is just garbage.There IS demand for woodchip and at good prices.GTP has contracts to this effect and the buyers are not going away.By the way,if you received the GTP shareholders blurb,the village idiots at GTP actually use this,strong demand at higher prices, as the rationale for sharehloders to accept.(The real reason for shareholders to accept ,as we all know, is to prevent the company going into insolvency and to preserve the ridiculous salaries for the management)
There is a line of companies waiting to move into the various management roles.With something like 20,000(?) MIS investors impacted,it is pretty clear to see that ,even if they charged us all $100 and retained the other fees GTP would rip out of us, all of us would be better off by a mile.
Don't accept this crap from Investor 1.His interests are not for us MIS investors.


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## Investor1 (11 January 2009)

Hi wooduk and ThePav,

wooduk, maybe you will be right and Great Southern will be less than $0.01 cent by 20 January 2009.

Interesting possibilities should that occur.

Would the management begin buying up shares at $0.001 after the vote?  I don't know, but I assume after the vote they would not be prevented from doing such.

At $0.001 cent could it be a speculative buy?

Can Great Southern be turned around?   

Can it survive as an MIS company with a change of management?

A change of business?  

Should the MIS investors join up with the company in the future to manage their forestry interests, or should they allow the land to be owned by one or more third parties and the schemes each try to manage the harvest of their trees?

Questions and questions.  

Should the scheme investors establish a leadership team to commence discussions with GTP or some other manager for the future?  Do they need to?

What will happen?  

Are there any people with strategies post the vote?

Regarding the Board and accountability, maybe there are few options for the Board other than to propose and recommend a concept such as Project Transform in its current financial situation?

Was Project Transform poorly explained?

Would I buy a few shares in GTP should it fall to less than $0.01?


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## ThePav (11 January 2009)

Hi Investor1,

Not sure what is with all your questions, where you are heading with them but I can only provide my opinion.

Project Transform was not poorly explained but rather poorly conceived. It is an idea that has benefits to only one party GS management.

The going concern issue has already clearly been stated by EY as part of their external audit report so this is it doesn't need any ellaboration. Auditors don't provide such opinions lightly.

The issue really comes down to the RE representing the scheme investors and maximising investor returns. GS currently operates as if this is a secondary concern. Understandably the currently priority of GS management revolves around cashflow and retiring debt. This is where the project investor come to the rescue. To maximise their own cashflow project investors should distance themselve from GS because they will just suck it all up to keep afloat.


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## brty (11 January 2009)

Investor1,

You have failed to cover the aspect that new MIS schemes are unlikely to occur successfully in all your arguments.

GTP themselves state that they are likely to go bust without them, as I have highlighted before.

Where do you see these sales being made and to whom?? Existing MIS holders are getting a return of only 20% of their investment, what would make new schemes have a positive return???

brty


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## dmor (11 January 2009)

I invested in the plantations in all the years from 1998 to 2004 except 2001 and 2002 and that is my only interest. An investment adviser suggested the investment.  I do not know personally any of the directors.

The 30 June 2008 balance sheet (page 9 of *Annexure 1*) in the Supplementary Explanatory Memo mentions "Interest-bearing loans and borrowings" of $782,269,000. 

On page 5 of (*Annexure 1*), para 2.6 under (d) borrowings there is mention of $105m of this debt being due in October 2009 and "..the ability of GSL to refinance this debt is uncertain.." 

The same para 2.6(d) mentions the possible sale of the cattle business as a way to reduce the borrowings. (to address someones point on the possible sale of the cattle business, of course if it was sold it would be to reduce debt which it may have to do based on the above comments in the Supplemenatry Explan Memo. 

Although I am as disappointed as anyone else my own view is that as an investor I am better off backing the company proposal since, if all goes well, and the share market recovers the share price will no doubt improve and the Company will be a much stronger company than it is now and I'll be laughing down the track. (as, in terms of the latter, it seems to me, is evident from reading the proforma balance sheet on page 23 of the Supplementary Explan Memorandum)

Sadly, I don't think the proposals will succeed in which case my own view is that the investors will be far worse off than they would have been otherwise.  

I understand the anger, I don't understand the rejection of what I think is an opportunity to salvage something. 

Someone in this thread said and I am not quoting it exactly, that they were amazed at the valuations. Well the reality is that things have changed, a lot. I would rather take my chances with the reconstituted company than be left with what I have now.


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## drsmith (11 January 2009)

I'll suggest that for the most part MIS investors are not angry at the proposal itself but at the possibility they may have no choice in relation to their own individual investment.

To me much of the argument presented by supporters is based on fear and blind hope with little common sense or logic.


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## turbo23 (11 January 2009)

"To me much of the argument presented by supporters is based on fear and blind hope with little common sense or logic."
Perhaps this is the case DR ... fear of being taken by the same people twice ... As they say take me for a ride (fool) once it`s your fault ...take me twice and it`s mine....
I really dont care what i get for my lots (as i invested the tax cut i recieved in a good market and did reasonably well )...
Since then however things have soured on many levels.... and as a consequence I find myself not being able to afford a tax bill on "percieved monies i will recieve" and absolutely no desire to invest in this mob... if you give me $10 for them at least then after tax i still have something in my pocket... (okay a loss ...but that has been dealt with ...as will my tax bill (maitenence aside)) ... If i have to sell these trees as firewood so be it as long as i get the cash (to deal with said tax bill)...

I do see Investors point about the company surviving.. (at least till after harvest)... But wish not to trust them again ....in any form.... especially when i distincly remember them having all the answers on the what ifs back then .... and how the land was specifically selected for their shallow water table to gaurd against drought....As if ...in hindsight I should of seen the writing on the wall .....but i trusted them.... my badNever again ... 
Perhaps my loss will be somebody else`s gain.... as these "imcompetents" (thanks Goodie)...will not be able to do this to anybody else...(is that anger? ...You forgot anger Doc).


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## Investor1 (12 January 2009)

Good Morning All,

The investment world seems to be changing.

I think managing your tax bill is something you may have all done before.

One of my thoughs prior to the vote.

Seriously what is the value of the trees.  If trees fall in value by 10%, 20%, 30% over the next few years, what is the impact on the value of the trees.  Demand for many commodities around the world seems to be falling.

I have noticed in the press lately that the price for metals may fall by significant amounts in the near future.  World recession seems to be on its way.  Demand for timber may also fall.

When the sale price of trees falls, other costs such as harvesting costs may not necessarily fall by the same amount.  For example, if timber sale price today is $200 m3 less costs of $150 m3 remainder is $50.  If trees fall to $180 m3 less costs of $150 m3 remainder is $30.

I am not sure what the costs are or the margins, but if the valuations were based upon 2008 export prices and they return to 2007 or earlier export prices, the valuation of your woodlots may be significantly less.

Also, a bigger seller often in the timber sector can secure better prices for timber and lower service costs (i.e harvest and transport costs, etc).

Before you vote "NO", really think what is the value of your trees?

Can someone say with grounds that they think the price of trees will rise over the next few years in Australian dollars?  Please give reasons, as it will benefit everyone on the forum. 


I can understand if you are unhappy with the management.  But if Great Southern goes under you will need to find new managers of your trees.  If you vote "YES" you can replace the management.

Good luck.


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## Guff (12 January 2009)

Investor1 said:


> Would the management begin buying up shares at $0.001 after the vote?  I don't know, but I assume after the vote they would not be prevented from doing such.
> 
> At $0.001 cent could it be a speculative buy?
> 
> ...




1. So what if the management buy up he shares at less than 1c, it is still insolvent.
2. You're free to buy up those shares  good luck with it.
3. GSL being turned around needs capital injection and a complete change of business, why not just invest in anoher company!  One that is actually already successful and has good management already in place.
4. GSL can't survive without massive capital injection, or without some capital injection and flogging off all of its assets at a big discount to book value - just to meet cash flow requirements.
5. Change of business... sigh, again why invest in GSL when there are other companies to invest in -- and MIS investors don't want to do that!  I certainly don't.


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## Guff (12 January 2009)

Investor1 said:


> I can understand if you are unhappy with the management.  But if Great Southern goes under you will need to find new managers of your trees.  If you vote "YES" you can replace the management.
> 
> Good luck.




Well, voting yes doesn't wipe out the fact that the company is insolvent and unprofitable.  I'm not keen on paying for the privilege to replace the management when it will be done once the company goes to the wall -- and that IS going to happen I'm afraid.

You're obviously linked to GSL and have a reason you see everything through rose coloured glasses.

Given you're so positive, I have some MIS projects for sale - how much will you pay?


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## wooduk (12 January 2009)

annual report december 29/08,page 25-gearing (nett debt/equity)

as of the 30th  sept 08 is 99%------Austock Securities research report 31/10/08 forecast it to be 69%.

Austock I recall from another source recommended ABC and Timbercorp

because of the shortfall in Trees 1 and Trees 2 the investors are entittled to a redemption payment,how many millions$$$$$ is that?


the land is encumbered$$$$$ by the banks,so Ithink gtp is running on empty. 

Ospraie hedge fund announced their withdrawal last year from gtp and I can be corrected,but have since gone under.


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## wooduk (12 January 2009)

thanks investo1 for your  thoughts, you have just confirmed that the                                NO   vote                  is the way.


I am not concerned how you think I came to this conclusion,as many comments other forum members have said it.

The gsp reports have said it,and I do not need your tax advisory unless you are an accountant,that you are independent and at arms length to this debacle and not an advisor ,to or for ,and or contracted to an entity that you will receive or hope to receive a financial reward and any other gift or gifts.


My opinion is my own based on thefact for starters that I invested for the long term and the trees are mine and not gsp 


the poor shareholder and the very small number tree investors who believe this BS are the one's screwed in the immediate future

MAKE UP YOUR MINDS-- I HAVE AND I  HAVE SENT THE VOTING FORM BACK 

                         WITH RESOUNDING    NO,NO,NO,NO!!!!!!!!!!!!!!!!!!

        THEY SAY YOU DO NOT HAVE TO VOTE AGAIN-- THAT IS GTP,


 I do not trust them,send in your vote NOW,and reinforce the NO  vote


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## Grumpy Old Man (12 January 2009)

Investor1 said:


> Good Morning All,
> 
> Seriously what is the value of the trees.  If trees fall in value by 10%, 20%, 30% over the next few years, what is the impact on the value of the trees.  Demand for many commodities around the world seems to be falling.
> 
> ...





Investor1:

if your argument that trees may fall in value, then how does this help GTP trade its way back into solvency?  I think your arguments may be counter-intuitive.

Wouldnt any fall in value of blue gum hits GTP shares in two ways?

1) If vote is successful, then GTP asset value and future cash flow is impacted by decreased woodchip pricing;

2) Any decrease in export pricing will probably directly impact on the attractiveness of GTP MIS projects - meaning further reduced sales.


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## Investor1 (12 January 2009)

GOM,

It is my opinion the future of GTP is not in MIS, unless the MIS product has better tax characteristics.  Maybe that will come in 2010 (or beyond).  I doubt they will do anything creative this year.

It is my opinion GTP should sell the cattle business and the horticulture businesses.  What could its debt levels be reduced to?

It is my opinion a larger coordinated organisation with levels of integration and combination of land and tree ownership can often realise more value than smaller less integrated forestry owners.

It is my opinion GTP's long term value, if it survives, is in its land bank.  Via a combination of carbon abatement revenues (post 2010) and timber revenues.  I consider "Carbon" will be a large issue in the future.  Treasury's indicated starting price for carbon indicates possible value.  

It is my opinion, amalgamating such a land bank in the future, should it be broken up because of the failure of Great Southern will not be easy.

I guess, I see value in the future as trees as a carbon sink generating carbon abatement revenue and timber prices sometime in the future (maybe not the next few years).

I am not convinced GTP will not survive.  In which case, Vote NO growers may realise value for their trees via GTP harvesting them, but not gains should land appreciate in value, nor as much by carbon abatement if the world accelerates its fight against global warming. 

If GTP fails, I have not read any evidence GTP MIS investors know what to do next or the value of what they actually have.

I consider that Project Transform may if it would be successful enable GTP to pay down its debts to a manageable level and could keep the land bank in a single entity.

MIS investors also would collectively have an asset that could be managed, subject to quality of management.  Subject to real value of the timber, Great Southern probably would have the ability to raise further capital to grow the business for the benefit of shareholders, subject to quality of the management and subject to the MIS investors exercising their shareholders rights to vote in the quality management.


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## Investor1 (12 January 2009)

One other thought, if there is no lease expiry date (i.e. you own the land), you may not need to sell or harvest your trees until the timber market and therefore timber prices improve.


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## Guff (12 January 2009)

"Investor 1", you have a vested interest which you are not declaring.

You are very optimistic about a terrible company that is ripping off everyone that put money into it.  Shareholders and MIS investors.

Please tell me how GSL will become profitable?  Capital raising will reduce *some*debt, how much debt do you really think will be retired -- can you see how much debt GSL has??

Will, in your analysis, GSL become profitable by selling its assets?  Or should be start talking about carbon credits etc.  Honestly, they have completely failed to run a pretty basic MIS -- why do you think they could run anything at all?


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## kam75 (12 January 2009)

I remember doing well out of this one (GTP) back in 03-04.  Had no idea of the fundamentals back then or even now.  Doing its best to stay above the 15c but the sellers have been in control of this stock since mid 07, and there's no sign of any accumulation yet.


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## ajj (12 January 2009)

If GTP were to offer a fair price for their shares I would be interested in buying them, but currently they want 50 cents a share for a something the market values at 17 cents today, regardless of the way they value my wood lots.

The way I see it, basically GTP are looking for a capital raising to retire debt to the banks and to improve their cash position. Most of the major banks have looked to secure new capital in these trying times, and they have done is by offering shares at 5-10% below the current price, why aren't GTP doing this? Instead of sticking the MIS investors with a stupid and unrealistic offer that won't get.


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## Guff (12 January 2009)

ajj said:


> If GTP were to offer a fair price for their shares I would be interested in buying them, but currently they want 50 cents a share for a something the market values at 17 cents today, regardless of the way they value my wood lots.
> 
> The way I see it, basically GTP are looking for a capital raising to retire debt to the banks and to improve their cash position. Most of the major banks have looked to secure new capital in these trying times, and they have done is by offering shares at 5-10% below the current price, why aren't GTP doing this? Instead of sticking the MIS investors with a stupid and unrealistic offer that won't get.




GTP has done this so any times previously and managed to burn up the entire capital, that a new capital raising will be almost impossible.  It would have to be mostly from retail investors as instituional investors ren't quite as silly.

Hence, "project transform" is really "project last chance"


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## Grumpy Old Man (12 January 2009)

Investor1 said:


> GOM,
> 
> It is my opinion the future of GTP is not in MIS, unless the MIS product has better tax characteristics.  Maybe that will come in 2010 (or beyond).  I doubt they will do anything creative this year.




Investor1:

Can you explain how the following paragraph is consistent with your comments?

"_Going Concern

The 2008 financial statements have been prepared on the going concern basis however, as detailed in note 1(b) to the financial statements, if Project Transform does not result in a successful outcome or should the 2009 MIS sales result be low or the sale of assets not proceed or, if required, should the ongoing support of the Group’s bankers not be forthcoming, then there is significant uncertainty whether the Group will continue as a going concern. Refer note 1(b) to the financial statements for further information."_


(GTP annual report Dec 08).


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## Investor1 (12 January 2009)

ajj,

I guess one of the problems for GTP and its Board was the share price was not so low when they originally made the proposal.  The last quarter of 2008 was not a great time for almost any company listed on a stock exchange, well run or otherwise.

Ajj, if the share price was lower, then there would be just more dilution.  But 70% is already a fair bit.

Similarly, if the proposal could turn GTP around, at $0.17, it may not take a huge amount of additional money by each MIS investors to buy out many of the remaining shares. 

The question I would like to know is, did the majority of MIS voters that voted "NO", vote that way thinking GTP may fall over and they will need to harvest their own trees, or they just thought the offer was not fair without being sure what actually is fair in today's economic environment?  Let's think what the RBA thought about the economy only say 6 months ago.

Did those that voted "NO" have any view on next year's or the following year's timber market price?  If so, how did they form their view?  Do those that voted "NO" just assume someone will harvest their trees in the future and distribute the value they think their trees are worth?

Do those that voted "NO" actually care how much their trees are worth?

Seriously, I think if the "NO" vote wins, a Growers representative group needs to be established  and they should commence discussions with GTP regarding the future management of the trees.

Guff, I have declared I have shares.   I have also seen the aftermath for MIS investors when managers fail.


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## ajj (12 January 2009)

Guff said:


> GTP has done this so any times previously and managed to burn up the entire capital, that a new capital raising will be almost impossible.  It would have to be mostly from retail investors as instituional investors ren't quite as silly.
> 
> Hence, "project transform" is really "project last chance"




Hence why if they want to offer the MIS project investors like myself an interest in their very impaired business, they need to offer a realistic price on the shares, (so we have control and can vote the directors out, hopefully with no golden handshakes). 

When a business is in a damaged state, raising capital from a "white knight" investor such as the MIS investors should be offered at a discount to them, to compensate for the risk that is being taken on. 

After all why is a MIS investor going to erode their position of being a semi-secured creditor to the business to buy shares at a premum of over 3 times the value of the share... That is just silly and why investors at voting No in droves...

Another throught, the NTA quoted in the GTP documents, talks about $1.44 a share before dilution of the MIS & cattle projects. If the share is such a dud, why don't the directors in the best interest of its share holders, wind up the business and liquidate it... Thus extracting the maximum value for its share holders.... If they do this now they may return something to its shareholders, they won't get the option later once the Banks start.

Why aren't normal GTP up in arms about this poor deal?


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## wooduk (12 January 2009)

to push the yes vote from a shareholders point of view,makes sense,why you may ask?

where would I go with my shares,with this appalling mess that is being rejected by the growers who own the trees and have a contract up till the 10th year then realising a cash reward that will be worth more than (4000 sharesX 17 cents).

the shareholders are the group that need to save themselves,and if they are not able  to,then it is all over red rover.the tree growers are not shareholders.

I recollect that the carbon credits may not kick in until 2015 for the agri-industry at the earliest,thanks Penny Wong.

if this proposal sees the light of day,then an extra 800 million shares,------------------------that is what a Zimbabwa $ is worth

                I have voted  NO AGAIN


----------



## ajj (12 January 2009)

Investor1 said:


> ajj,
> 
> I guess one of the problems for GTP and its Board was the share price was not so low when they originally made the proposal.  The last quarter of 2008 was not a great time for almost any company listed on a stock exchange, well run or otherwise.
> 
> ...




The Market determines the price of shares and only the market can. Hence if 17 cents a share is the market price that is what GTP should offer. After all they were willing to do a sliding scale between the price of 50 cents and 1.10 (would love to see that price again..)

In the case of the wood lots, GTP determined a value they were willing to pay in cash terms using an "independent advisor" what ever that means, and then proceeded to put down other conditions like the minimum and maximun price of shares. A fair captial raising is one where the market determines the price and then the vendor offers some form of incentive or discount on that price that allows the buyer to avoid brokerage etc.

In reading your comments I can't help thinking your comments are tainted. The dilution of ownership for the existing shareholders is sad, but they are shareholders and have elected up front to take the risk of being a shareholder. MIS project investors did not elect to buy shares, and GTP transition project is an offer for them to become shareholders that appears to be less than fair or balanced in its construction, and proobably has damaged GTP share price, because it looks sure to fail.

Most MIS investors would be looking a 2 to 3 years before their investment matured and the current economic environment is a short-term shareholder problem not really a MIS investor issue. MIS investor concerns should really be about was their enough rain fall for my crop to succeed and what will be the market for my product when it is mature...

Another flaw I see in the offer document is the pricing of the woodlots and the woodchip price. We see the magical figure of $208 per metric tonne quoted and used to value the woodlots, with no reference to the exchange rate and potential exchange rate changes that have since occured since that calculation was made, the $AUD has devalued nearly 30% against the Yen in that period, my calculation in today's terms suggests the per tonne price may be as high as $333 per tonne. Not to mention many of the input costs for harvest (diesel), transport and salaries, should be decreasing in this current econonmic environment. 

If GTP want its MIS investors to help rescure their company and have the MIS investors as part of their shareholder base sharing the companies risk, they need to build a deal that will work for the MIS investos, they hold the trump cards at the moment.


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## Investor1 (12 January 2009)

ajj,

If GTP's shareholders were diluted to 1% would it make a difference due to a $0.01 offer price?

Based upon the people writing for the "NO", it would not make any difference.

Accordingly, if GTP is going under soon, no matter what, what are the "NO" votes doing about maximising the value of their trees?

I concede I cannot change anyone's vote to a "YES".

But I am amazed how the "NO" vote army appear to have few, if any, plans for after that event. Other than maybe a beer or two!

The way I see it, shareholders have based upon the comments on this thread $50 million market capitalisation, but closer to zero based upon daily turnover, in the game. MIS investors have north of $1billion still invested.

In aggregate, I wonder who will lose more?

Who will be the winners? Maybe, some offshore timber entity?


I cannot see why a deal cannot be agreed. However, deep down, I think the "NO" votes do acknowledge that if they all voted "YES", GTP has a long term future. They could afterwards just vote the management out, even if it costs some money.

Wooduk, I understand forestry can elect into carbon from the beginning.  Other agriculture will not be forced in until 2015 at the earliest.

I also give up trying to explain what 2 + 5 may equal.  Or what 2 without 5 may equal or 5 without 2 may equal.  

Wooduk, I wish you all the very well.


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## Investor1 (12 January 2009)

ajj,

In Australia, we generally recieve our wood in Australian dollars.  The world price is usually based in US$ and that is the basis for discussions to agree the annual price.

Accordingly, ajj, you should consider doing your calculation also the other way?

Grumpy Old Man, can you provide a more accurate description regarding currency calculations.

Is ajj's assessment likely to be right?


----------



## Grumpy Old Man (12 January 2009)

Investor1 said:


> ajj,
> 
> In Australia, we generally recieve our wood in Australian dollars.  The world price is usually based in US$ and that is the basis for discussions to agree the annual price.
> 
> ...




I understand from the GTP and ITC press releases that the 2008 Australian hardwood price was $207.40 per bone dry tonne for blue gum.

I also understand that Hardwood export contracts to Japan are all expressed in Australian dollar terms.

The weakening Aussie dollar is likely to make Australian HW exports significantly more attractive in Japan compared with our competitors - however whether this makes any difference or not is anyones guess.


----------



## ajj (12 January 2009)

Grumpy Old Man said:


> I understand from the GTP and ITC press releases that the 2008 Australian hardwood price was $207.40 per bone dry tonne for blue gum.
> 
> I also understand that Hardwood export contracts to Japan are all expressed in Australian dollar terms.
> 
> The weakening Aussie dollar is likely to make Australian HW exports significantly more attractive in Japan compared with our competitors - however whether this makes any difference or not is anyones guess.




The price may have been negotiated in AUD, but with a 30% devaluing of the AUD, it can only mean upside next time around, subject to the recover of the AUD, and of course demand vs supply conditions, my issue is more with the fact that these items were not discussed in the GTP proposal document.


----------



## ajj (12 January 2009)

Investor1 said:


> ajj,
> 
> If GTP's shareholders were diluted to 1% would it make a difference due to a $0.01 offer price?
> 
> ...




Yet another reason for GTP to do what ever it takes to save its shareholders from a 100% loss if the company goes under. 

I am a MIS investor and I would vote YES if I could see a valid risk/reward for buying the GTP shares, but buying shares at 50 cents a throw when the market is selling them at 17 cents does not make sense.

If GTP want the deal to get up they need to revise their numbers, I think they will need to allow MIS investors to take a higher percentage of the business and given the poor share price raise a smaller amount of cash.


----------



## wooduk (12 January 2009)

from an investor point of view I suggest the following

1.investors ARE made up of individuals that were encouraged by the promotion that great southern plantations were and possibly still are a great LONG term investment.

2.In that mix of investors are advisers------ a LOT of advisers

3. ALL investors in the MIS schemes ARE disaffected at what gsp has put up

4.GSP management is responsible for this debacle.

5.shareholders are the POWER TO  CALL for extraordinary meetinge

6.investors have ONLY one course of action(unless you as an investor reckon it is the best for you)  and that is to 

                                              vote NO


7.So if it is suggested that the no vote is leading , and that is only speculating

would not that say that a LOT of advisers PO at being duped by this train wreck called transformation would not have analised this crap deal  and thought it if any good they (advisers) would tell you. After all look what Sentry adviser group did with one of its advisers


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## edliw (12 January 2009)

Ivestor 1

Regardless of your claim your posts have GTP spin and scare tactics all through them.
Deep down I think the No voters still mean NO. 2+5 will equal 0.
With the over inflated valuation of their assets, when sold will not cover their debt.
They will also have to find a new clients list because we won't be back to be screwed again.


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## ThePav (12 January 2009)

I have to say I agree with some of Investor1 points but I do think they are on the GS payroll in some shape or form 

Great Southern has no future as an MIS company - correct. If you see an advisor writing Great Southern business you know how to treat their advice. 

As I have mentioned before project transform is dead in the water and the growers meeting is essentially the final bell. What growers need to focus on is the future post the failed project transform. The failure of project transforms is essentially the end of this company. 

Now what is the best way to navigate the schemes through the Great Southern liquidation process? That is what needs to be the focus. Based on past history it is in the scheme's best interests to remove the current RE (Great Southern Managers Australia) ASAP and replace with a new entity that is independent of the insolvent company. This new RE is then in a better position to conduct this navigation process and deal with the receiver manager.

One point I disagree with is that MIS has no future. I think that with the right management and focus there is still a place for MIS. Investors are not after excessive returns they invest for tax planning purposes. There are many well managed MIS companies out there that will survive long into the future offering projects with positive returns. The industry has suffered from the corporate cowboy's chancing the easy funds and they are the companies struggling at the moment. The investment bankers do not make very good "farm" managers.

Great Southern became too greedy, its executive inflated their wages excessively and at the end of the day they performed poorly. The current global crisis had very little to do with this corporate failure.


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## doctorj (12 January 2009)

Maybe investor1 or someone else with a better understanding of the company than I can explain this to me, but if we all agree there's value in their land and the refinancing of the debt is the problem, why not shift the land itself into a fund?

GTP have the in house skills to do this, so the marginal costs would be quite low.  They'd be able to retain equity in the land through ownership of a % of the fund and the new cash would help them  with their immediate liquidity problem

GTP survives as manager of the schemes, the shareholders don't get diluted and the scheme holders don't have to worry about finding a new manager.
It seems like the obvious plan to me.  So much so that I can't believe they haven't already considered it.  Could it be they're in a negative equity situation with their land as well?  Or do they doubt their ability to market any scheme/fund now?  If one or both of these are true, does this impact anybody's vote?


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## ThePav (12 January 2009)

doctorj I am not sure you realise but finding a new fund manager is the best thing that could happen to these schemes, maintaining GS as the scheme manager would be disastrous, they are incompetent, they make George Bush look like an inspired genius. I am not 100% on the figures but they have raised around $2bn over the last 5 years and they are currently in a cashflow crisis, it beggars belief, to achieve that you must be turning everything you touch into ****. These guys sure have the midas touch. I think this company could get a cash injection of $500m and have all their debt wiped and they'd still find a way up **** creek again. Shareholders should be disgusted with the board for not making the management accountable. Anyone would think they were just along for the ride.


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## wooduk (12 January 2009)

doctorj said:


> Maybe investor1 or someone else with a better understanding of the company than I can explain this to me, but if we all agree there's value in their land and the refinancing of the debt is the problem, why not shift the land itself into a fund?




Doc J

is not the land encumbered by the banks,ANZ etc.as security on the loans?

I wonder if we could put a caveat on the trees that the land is on?


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## doctorj (12 January 2009)

wooduk said:


> is not the land encumbered by the banks,ANZ etc.as security on the loans?
> 
> I wonder if we could put a caveat on the trees that the land is on?



Surely not all the land and even if it were, if the transaction was structured to pay off the debt (and thereby releasing the mortgages), who cares?


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## wooduk (13 January 2009)

wooduk said:


> annual report december 29/08,page 25-gearing (nett debt/equity)
> 
> as of the 30th  sept 08 is 99%------Austock Securities research report 31/10/08 forecast it to be 69%.
> 
> ...




I am still interested in getting a reply to my 2 cents worth from this previous notice

any takers?


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## goodie3shoes (13 January 2009)

From GTP's point of view,it is probably not that critical if the NO vote gets up anyway.The company will simply accept the timber/cows from the YES voters,as is there right, and they should succeed in getting close to 50% of the total of the projects.
So,the poor sods who voted yes will have a thimble full of shares at 17c,the GTP management will be able to flog off the trees and cows of the Yes voters and retire debt,the GTP management will be able to continue unabated in destroying the value of the company, and the NO voters will continue on and get the rewards (or not).
I really would like the GTP management to give me some guidance on there current business model.It can't be in MIS and they are hardly credible rural managers.So,just where will any income come from?


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## Forenth (13 January 2009)

Its getting late, the time for debate is coming to an end quickly. If you haven't voted yet then you're almost out of time.

Its time to light the torches and start the hunt, lol. Parliament Place, Perth right? See you there!

All I want for Christmas is to become a GSL director (with bonuses and all the perks!). Just for a year or two...


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## sugar3157 (13 January 2009)

goodie3shoes said:


> From GTP's point of view,it is probably not that critical if the NO vote gets up anyway.The company will simply accept the timber/cows from the YES voters,as is there right, and they should succeed in getting close to 50% of the total of the projects.
> So,the poor sods who voted yes will have a thimble full of shares at 17c,the GTP management will be able to flog off the trees and cows of the Yes voters and retire debt,the GTP management will be able to continue unabated in destroying the value of the company, and the NO voters will continue on and get the rewards (or not).
> I really would like the GTP management to give me some guidance on there current business model.It can't be in MIS and they are hardly credible rural managers.So,just where will any income come from?




Hi i dont undersand about all this...
I have 9 tree lots in the 1999 issue and paid $3k per lot they are due to mature in 2010 ...can someone please tell me in plain english where my investment stands...
thank you...


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## goodie3shoes (13 January 2009)

Very simple Sugar,
if you think 5466 shares at 17c ($929) is a fair return for your $3,000 (plus GST and insurance) for your trees that will be harvested next year ,then vote YES.
If you have a modicum of understanding, then you might wait and harvest your plantation timber and vote NO. It is pretty simple really.
But this is my opinion.
Oh, if you vote YES, you will also have a substancial tax bill this year that may be greater than the value of your shares.
Then again, the shares might go up in value.Santa came in December too.


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## sugar3157 (13 January 2009)

Thank you for your straight answer...
When will this vote be done?
Hopefully the vote will be no and maybe I will get at least my money back...


----------



## bv2726 (13 January 2009)

I would like to thank Investor1 for all of his/her posts - they have provided a lot of very well thought out responses and have provided some excellent information and a lively debate. I have enjoyed reading all the responses - thanks to everyone else as well. 

(Before Investor1 started posting, this thread was going very quiet as everyone agreed on a No vote.).

For me, I have Trees and Cattle. It may be the case that I lose my Cattle despite voting no which will really really annoy me. I have already written off the entire investments from an emotional/mental point of view - now if I get a tax bill as well I will be really annoyed.

Looks like I was sucked in by the glossy brochures and slick sales meetings that Great Southern put on.


----------



## Investor1 (13 January 2009)

HI All,

At least one thing, the MIS investors consider now they need to plan for the future.

Seriously, the issue I have noted is you don't like the management. 

They can be replaced.  The MIS Investors will control the shareholding and therefore the vote.  You can always call a shareholders meeting, appoint a new Board and search for a new CEO, etc.

It is my view Great Southern with the help of MIS investors may be able to be saved and to go on.  I think the MIS investors are getting focused on today's share price and not the assets or the opportunities.

Even with voting "NO", the MIS investors can do one of two things for not much of an additional investment.

The investors subject to the vote have say $480 million plus in the current schemes and other investors that may be impacted in the future by GTP's failure say another $500m+.

If they invested a few dollars each (less than 5% of the offer), they may either take control of Great Southern based upon current market capitalisation and/or significantly move the share price upwards.  Then we would not be talking about a $0.17 stock.  If the NO vote results in the share price falling the dollars involved are even less.

If you hate the management, replace the management.

It is my opinion, combining the land with the trees is going to add value.

I can comment on many aspects of forestry, but if you own the land, in downturns you don't have to harvest your trees.  You let them grow on until times improve.  If you don't combine the land with the trees and you own the trees, you may need to harvest or the land owner may inherit your trees for free.  In bad times, can you sell trees at a loss after harvesting (probably yes).


If the vote goes bad, GTP shares may fall next week.  I may buy more shares.

As the question is who should be the people that manage your trees, it does not necessarily mean it cannot be Great Southern.  Maybe just a new management team.

Great Southern has other assets, as well.  Can its debt be managed?

How much of the debt can be repaid by selling the cattle assets?  What is the combined value of the cattle (MIS and Great Southern) and the land?


----------



## Investor1 (13 January 2009)

Hi All again,

One thing I do hope does not occur next week.

The NO vote prevails, the Insto's dump GTP, as it is no longer in the index.

Shares fall to say 5cents.  Market cap under $15million.  The management and friends of management buy big and take control of Great Southern.


----------



## wooduk (13 January 2009)

bv2726 said:


> I would like to thank Investor1 for all of his/her posts - they have provided a lot of very well thought out responses and have provided some excellent information and a lively debate. I have enjoyed reading all the responses - thanks to everyone else as well.
> 
> (Before Investor1 started posting, this thread was going very quiet as everyone agreed on a No vote.).
> 
> ...



it is not over yet,do not forget that there was a statement that in the constitution that they could use the corporate act and still knock off your investments,ICAN NOT CONFIRM THIS BUT IF SOMEBODY CAN PUT MY ANXIETY ON THIS MATTER to rest PLEASE DO?!!!

Other wise the legal crowd will have another job to do, like Dennis and Co have already

                   FOR THE RECORD I VOTED A BIG FAT--------

 NO


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## drsmith (13 January 2009)

Investor1 said:


> Seriously, the issue I have noted is you don't like the management.



If someone forced me to take $0.17 worth of share for $0.50 worth of asset they would not be on my Christmas card list. Lets not forget that this is what Great Southern's management is trying to do to it's MIS investors. To summarise this is nothing more than a transfer of wealth from the MIS holders to Great Southern itself.

GTP have today provided an update to the proxy vote.

http://www.asx.com.au/asxpdf/20090113/pdf/31fjzw5p61q680.pdf


----------



## drsmith (13 January 2009)

Investor1 said:


> Hi All again,
> 
> One thing I do hope does not occur next week.
> 
> ...



If you sell your shares this week then you won't have to concern yourself as to what happens next week.


----------



## wooduk (13 January 2009)

wooduk said:


> I am still interested in getting a reply to my 2 cents worth from this previous notice
> 
> any takers?




*I AM STILL WAITING FOR A REPLY ON WHAT AUSTOCK STATED ANY ONE?!!!

I AM STILL CURIOUS AS WHAT THE PRICE EARNING RATIO IS BASED ON 17 CENTS,THE ONE I HAVE IS BASED ON 28 CENTS AND THAT IS SCAREY.*


----------



## SDE (13 January 2009)

Has anyone read the updated KPMG Independent expert reports?

The IE still considers the proposal to be fair, despite the GS offer failing the convention set out in ASIC Regulatory Guide 111.10. Under this convention,
“an offer is ‘fair’ if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer”. 

Also, tucked in at the bottom of page 10 is footnote 5

“We note the adoption of the notional issue price (ie VWAP of 28.45 cents) as the basis for setting the value of the consideration received for taxation purposes has NOT been confirmed by the Australian Tax Office (ATO) and therefore there remains a risk that the ATO will seek  to adopt an alternative amount for its purposes”. 

Translated this means that the ATO could consider the issue price of GS shares to be 50 cents/share; tax at 46.5% in this scenario would be 23.25 cents/share.


----------



## Investor1 (13 January 2009)

Hi SDE,

Would you not argue the consideration received for the sale of the interests be more like $0.17 rather than $0.50 cents?


----------



## Investor1 (13 January 2009)

Hey, should the announcement today regarding the progress of the vote be interpreted as bad news?

I cannot understand how few trades have occurred since the announcement.


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## wooduk (13 January 2009)

Investor1 said:


> Hi SDE,
> 
> Would you not argue the consideration received for the sale of the interests be more like $0.17 rather than $0.50 cents?




In normal day today cirumstances possibly yes giving the benefit of the doubt.


BUT the management have a duty of care to properly inform voters and now do people who voted yes on this are they aware of this on this date 13th January 2009 ,thats six days to vote.

I do not argue about other peoples assets and we are not debating  or speculating .If the ATO is basing the ruling on 50 cents,i assume managemt had plenty of time prior to this date to inform people voting.


----------



## SDE (13 January 2009)

Investor1 said:


> Hi SDE,
> 
> Would you not argue the consideration received for the sale of the interests be more like $0.17 rather than $0.50 cents?




If it were $0.17 or the VWAP ($0.2845), then there wouldn't be a risk in the IE's opinion.

The fact that the IE has qualified its report suggests that there is a risk, and that that risk is that the ATO will consider the issue price to be $0.50


----------



## SDE (13 January 2009)

wooduk said:


> In normal day today cirumstances possibly yes giving the benefit of the doubt.
> 
> 
> BUT the management have a duty of care to properly inform voters and now do people who voted yes on this are they aware of this on this date 13th January 2009 ,thats six days to vote.
> ...




GSMAL directors rely on the integrity of the IE's report to support their advice to MIS holders.

The IE's updated reports have been published by GS (MIS investors informed, duty of care performed). It's up to the individual MIS investor to read and interpret (or get independent advice)


----------



## goodie3shoes (13 January 2009)

'“We note the adoption of the notional issue price (ie VWAP of 28.45 cents) as the basis for setting the value of the consideration received for taxation purposes has NOT been confirmed by the Australian Tax Office (ATO) and therefore there remains a risk that the ATO will seek to adopt an alternative amount for its purposes”. 

Translated this means that the ATO could consider the issue price of GS shares to be 50 cents/share; tax at 46.5% in this scenario would be 23.25 cents/share.' SDE QUOTE.
Extraordinary !!
In other words,should your tax rate be at the top end of the scale, then you MAY be assessed at 23.25c even though you only received 17c (at today's price) .You will actually PAY 6.25C more than you received to give up your timber or trees!! And we have the IE and the Independent Directors saying that this is fair and reasonable for all schemes bar one. You would think that this critical point would need to be clarified before a vote as it is very significant. 
Surely this alone for legal action against the IDs. We know ASIC will do nothing.
Maybe Investor 1 can provide the companies response.


----------



## drsmith (13 January 2009)

SDE said:


> Also, tucked in at the bottom of page 10 is footnote 5
> 
> “We note the adoption of the notional issue price (ie VWAP of 28.45 cents) as the basis for setting the value of the consideration received for taxation purposes has NOT been confirmed by the Australian Tax Office (ATO) and therefore there remains a risk that the ATO will seek  to adopt an alternative amount for its purposes”.
> 
> Translated this means that the ATO could consider the issue price of GS shares to be 50 cents/share; tax at 46.5% in this scenario would be 23.25 cents/share.



It would be interesting to know whether or not GTP have actually asked for ruling from the ATO on this.


----------



## goodie3shoes (13 January 2009)

It is clear from reading the original Independent Taxation Opinion from KPMG that tax is assessed at the VWAP.So ,probably, tax will be assessed on the 28.45c .So we could be paying 13.23c in tax for our 17c share.
My original figure was not correct.


----------



## Grumpy Old Man (13 January 2009)

goodie3shoes said:


> It is clear from reading the original Independent Taxation Opinion from KPMG that tax is assessed at the VWAP.So ,probably, tax will be assessed on the 28.45c .So we could be paying 13.23c in tax for our 17c share.
> My original figure was not correct.




From the look of things, this will only be an issue if there is a landslide of voting this week in favour of the proposal.  My interpretation is that the GTP Board seem to think this is unlikely.

Reading back through the prospectus, it would appear that even those who voted yes to individual offers, can still write to GTP 10 calendar days after the shareholder meeting and instruct GTP to withdraw their acceptances.


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## Investor1 (13 January 2009)

I assume whatever you are assessed on will be the cost base for the shares for tax purposes.  But you better consult your accountant or tax adviser.

So in the future or even this year, should the shares be sold for less than that amount, the amount of any loss may possibly be utilised to reduce the tax payable on either CGT gains or revenue gains subject to your specific circumstances.

Consult your accountant or tax adviser.  Possibly, for some of you, should a loss occur, maybe the sale of the shares could generate a tax deduction rather than a CGT loss.


----------



## SDE (13 January 2009)

goodie3shoes said:


> It is clear from reading the original Independent Taxation Opinion from KPMG that tax is assessed at the VWAP.So ,probably, tax will be assessed on the 28.45c .So we could be paying 13.23c in tax for our 17c share.
> My original figure was not correct.




I wasn't suggesting that your figure was incorrect. I am pointing to advice from KPMG contained in its updated 12 Jan 09 IE report.

I also note that the original taxation opinion from KPMG contained this qualification (page 3)

_"It is open to the Australian Taxation Office (ATO) to take an alternative view in relation to the determination of the market value of Investors’ interests in the Project, however we consider that the better view is that the market value of the interests in the Project will be equal to the
Consideration"._

Of course the usual, "no responsibility" disclaimer is provided (page 9)

_"We are, of course, unable to give any guarantee that our interpretation will ultimately be sustained in the event of challenge by the Australian Commissioner of Taxation"._

Which leads to the following question:

Is the consideration 50 cents/share (GSL's position), the VWAP (28.45 cents/share) or current market price (17 cents/share)?


----------



## SDE (13 January 2009)

Investor1 said:


> I assume whatever you are assessed on will be the cost base for the shares for tax purposes.  But you better consult your accountant or tax adviser.
> 
> So in the future or even this year, should the shares be sold for less than that amount, the amount of any loss may possibly be utilised to reduce the tax payable on either CGT gains or revenue gains subject to your specific circumstances.
> 
> Consult your accountant or tax adviser.  Possibly, for some of you, should a loss occur, maybe the sale of the shares could generate a tax deduction rather than a CGT loss.




Investors have already had their 100% write off on this investment. A second bite at the cherry Investor1?


----------



## cathadfab (13 January 2009)

Well...it seems i can't read fast enough to keep up with the posts but felt it was important enough to point out one little thing. Investor1 is entitled to have an opinion that is not in keeping with the general consensus of this forum.

We're all trying to work out what is right for us, and whilst Investor1 has strong opinions to vote yes, i think it is rather rash for any of us to assume that he is an employee/director of Great Southern, or any other assumption about his position as an investor we might make. Likewise for Investor1 to assume that GrumpyOlMan has some sort of secret knowledge...

At the end of the day, for him to vote yes is his choice. Whether we agree or not agree. And in some ways it is good to see another opinion, even if we don't like it. Who knows something he says may twig another thought that leads us all down the right path to understanding what is happening.

As for me, I own '06 Cattle. I can't comment on the trees at all, but am really worried about my investment in '07 trees after all of this. For me, it looks like my poor cows are going to be taken from me, whether i like it or not, and then sold off down the track to boost the company profit line. This appears to be happening whether i vote no or not. At least some of you have a bit more choice with more people choosing to vote no. 

My gut feel is that with the more recent investors, the investments were made in a time of boom, and out of need to reduce tax debts. Having received the tax incentives then the offer comes out just under even. For some people this may have got them out of a sticky situation a couple of years ago, and hey...what's a few dollars now that the situation has changed. I'm currently kissing my retirement plans goodbye as i watch all this unfold, as I'm assuming many other interested parties are. Beware though, it will be the investors that are not that far up the retirement tree that will cop a loss and be happy to take a loss this year, only to make it up in another year.

For the sake of this forum let's not forget that we're all trying to look after our own bottom lines, and for each of us that is a different scenario. In my humble opinion it would take a really silly person to sell shares straight after receiving them without giving the shares time to appreciate, if that is in any way possible. I do agree that there could potentially be a flood of shares onto the market within the next six months to cover tax debts etc. Being forced to take shares, I'm planning to at least ride out for a while to assess the market and  see if there is a small glimmer that i may come out better off than it looks like i'll be by the end of Jan.

If only I could go and collect my cows and take them home...


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## drsmith (13 January 2009)

Investor1 has stated that he/she is a shareholder in GTP.

If Invostor1 feels the need to lobby MIS investors to vote yes then the best advice I can offer is to sell his/her holding in GTP and invest the proceeds in something in which he/she has greater confidence.


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## cathadfab (13 January 2009)

Is it possible that as a shareholder he may be given information we are not given as investors? or does that information have to be made public?


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## ThePav (13 January 2009)

I am sure you all read the announcement today. They don't have 75% in any projects and it is highly unlikely that this position is going to change significantly between now and vote date. That means the proposal is dead!!! no more debate on the yes v no vote, it is dead, dead, dead. Because the offer was crap, crap, crap. Simple. 

Would Great Southern have been better off if the offer was successful? Read the financial report the company is a certified basket case of course it would have been better off.

Would scheme holder have been better off if the offer was successful? Not with the offer that was proposed. The numbers just don't added up, get out your calculators and do your own sums, the offer was ludicrous.

Would a combined company become a strong diversifed agribusiness company? Any company that is managed as badly as Great Southern is never going to be classified as strong. Eventually all the profits would be sucked out via the executive salaries.

What should be the next move? Growers should get together and get their schemes as far away from Great Southern and the GS corporate structure as they possibly can. This will help, to some degree, insulate them from the impending liquidation process. I think setting up a new RE would be a very simple process.


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## turbo23 (13 January 2009)

What should be the next move? Growers should get together and get their schemes as far away from Great Southern and the GS corporate structure as they possibly can. This will help said:
			
		

> Don`t think this is possible Pav .As it is still GTP`s land,and the contract is still in place .
> I think our best scenario is that GTP get the assets/proceeds from those people who voted yes ...(sugar hope you posted your vote off ...which everway...if not do so immediately) (feel bad for the cattle people that had no say)...and pray that they can indeed turn things around ,and become a going concern .At least till after harvest.(why do i feel I`m off with the pixies here).(thats right cause I own a few in the 2003 scheme)... no chance ... Hope I`m wrong
> Could be off the mark here though ! But works for me.


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## slim pickins (13 January 2009)

anther announcement?!?!?!.....GTP, do not ask for whom the bell tolls.... it tolls for thee  hehehehehe

gtp is doomed... doomed i tell ya. a "chicken little moment" is coming for the directors. and the shareholders.

i own the trees. i am fine. when GTP goes under, my woolots will be sold to another management company that will have to work in our best interests. there are plenty around and this will be organised by the liquidators. liquidators who will be paid by the sale of GTP assets. 

lucky i dont own GTP. those liquidators will be exensive. 

i own the trees and i bet if i sold them as firewood id get more moeny then GTP is offering. noone can take our trees, management rights will be given to the best offer so i am confident we will get a good return on the trees. especially considering that in 2 years time the economy will be booming.

as for GTP, well they have sooooo much debt and it will sink them. they will never sell any MIS again so its "hasta la adios" for them.

looks liek "investor1" finished the GTP training course in the enlgish language.... the ability to turn a word into a paragraph and yet avoid sayign anything. bringing up non issues and turnign them into arguments for voting yes.  

guys if anyone hoenstly thought the share offer was good, they would take the shares and keep hush hush to avoid everyone getting shares. you dont talk up shears before you buy them do you????

so he clearly has more shares then MIS. and i extend my condolences to him. 

worst case scenario..... noone offeres to manage the trees..... i will open a management company to manage the trees. mate they are trees..... you just insure them and watch them grow... its not your mothers tomato garden where oyu have to talk to them to see them grow  

its like making jack daniels whiskey on thise adds, you just sit there and play chess for 5 years. management companies that have grand plans and do too much go bankrupt very quickly. as we are seeing right now.

our land is leased till harvest so its no problem. 

as for negotiating a price and contracts.... lol... people we are highly educated investors and citizens of the 1st world. we have organieed functioning government, our cities have infrastructure and enough food to eat. one of the richest countries on the planet. i am sure we can organise the sale of timber to someone in japan or china or europe.

we arent sheep to be led around by some crook who tells us stories of gloom and offeres us peanuts for a very valuable investment. the same investment he will sell to get out of his won debt hole!!

i have more faith in any of you here today to deal with my trees then GTP. lets be optimistic about a post GTP future.


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## Forenth (14 January 2009)

There was an earlier post, which I can't find at the moment, referring to a 5 or 10% yes vote from investors to change RE for a project. So if it was required then we get a list of investors and write to ask them. eg. John Woodruff has a list of 17000 of the 42000 investors in the 2000 project and wrote to them.

Changing RE may not be that difficult. It would just have to be explained to investors clearly before the vote. Something GSL seem unable to do. Their 191 and 60 page explanations only made me wonder why if its a good deal why does it take more than 3 or 4 pages to explain. Of course the fine print on page 135 or so tells you why its not.

Also, in all those pages it does say that only projects up to 2003 were chosen due to the ATO requiring growers to have MIS investments for 4 years to keep their initial tax deduction. I read that as meaning the 2004 and successive projects will be targeted in future years. So if you're in them keep your eyes open!


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## Investor1 (14 January 2009)

Hi All,

I am so pleased that you as an MIS investor group have started thinking about what you should do next.

The issue you have is still fundamentally with the management.  (I.e. discussions to replace the responsible entity).  You can always replace the management if you get control of 50% of the shares.

I am not sure which MIS manager is in that much a better financial position than Great Southern.  Maybe not Timbercorp?

Regarding some views you can do a better job than Great Southern in managing your trees, I can accept that statement provided you are happy with your decision to invest in the first place with Great Southern rather than an alternative manager.  Consistently good decisions are required from now on.

Based upon individual acceptances, the MIS investors will be getting a significant shareholding in GTP.  Maybe they can arrange a change of management if that is required.

I think it is important for you to form a group of MIS representatives and begin to explore your options.

Maybe, taking control of Great Southern is an option?

Is Great Southern really insolvent?

Another question I have, how many of you have actually read the Scheme Constitution, Management Agreement or Lease Agreement, etc?


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## goodie3shoes (14 January 2009)

I recommend a read of the GTP 2008 Annual Report that was released on 29th December (funny that)
An appalling result with a loss of $63.8m (2007 Profit $71.5m).Dividends cut but remuneration packages increase.Financing costs up to $71m.A worthy read for those punters (like me,sadly) that are likely to end up with shares in a company that does not look likely to survive. But I may be wrong again.


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## Investor1 (14 January 2009)

Hey Guys,

Have any of you been following the news regarding the introduction in 2010 of a Carbon Reduction Pollution Scheme (CPRS) in Australia?  An impost on the use of carbon.

Have any of you read the rules that are proposed to apply to forestry?

Maybe it could add value to some of GTP's land.

Maybe some of you should have a read.  

I think many countries around the world are introducing laws dealing with carbon pollution, not just Australia.

Maybe someone can perform some calculations of the revenues GTP may possibly be able to receive from the introduction of CPRS in 2010.


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## goodie3shoes (14 January 2009)

Investor1, you are truly a dangerous and mischeavous piece of work. It is clear from the Govt's green paper that the Carbon Pollution Reduction Scheme will not come into force for agricultural products before 2015 at the earliest.Please read Page 14 of the GTP 2008 Annual Report for confirmation.
Investor1, I have no idea what your agenda is and this 'gossip site' must allow all views, but you have been nothing but deceptive and misleading and inconsequential in all your ramblings.


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## drsmith (14 January 2009)

cathadfab said:


> Is it possible that as a shareholder he may be given information we are not given as investors? or does that information have to be made public?



Listed companies such as Great Southern Plantations are required by law to make market sensitive information public.


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## Investor1 (14 January 2009)

I understand the Government will not mak a decision for general agriculture (i.e. cattle) until 2013 with a possible introduction date until 2015.

However, the Government stated position is forestry can elect in from scheme commencement.  

goodie3shoes you can check that up yourself.  If you read the first bullet point on page 13 it states:

"Participation by forestry in the CPRS is on an opt-in basis."


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## SDE (14 January 2009)

Forenth said:


> There was an earlier post, which I can't find at the moment, referring to a 5 or 10% yes vote from investors to change RE for a project. So if it was required then we get a list of investors and write to ask them. eg. John Woodruff has a list of 17000 of the 42000 investors in the 2000 project and wrote to them.
> 
> Changing RE may not be that difficult. It would just have to be explained to investors clearly before the vote. Something GSL seem unable to do. Their 191 and 60 page explanations only made me wonder why if its a good deal why does it take more than 3 or 4 pages to explain. Of course the fine print on page 135 or so tells you why its not.
> 
> Also, in all those pages it does say that only projects up to 2003 were chosen due to the ATO requiring growers to have MIS investments for 4 years to keep their initial tax deduction. I read that as meaning the 2004 and successive projects will be targeted in future years. So if you're in them keep your eyes open!




(I) Calling of meetings of members by members - 5% of members (CORPORATIONS ACT 2001 - SECT 252D)


(II) Removal of responsible entity by members (CORPORATIONS ACT 2001 - SECT 601FM)


Members of MIS are empowered by the Corporations Act


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## gavinabrown (14 January 2009)

*Dennis and Co Action Fees*

I am still trying to work out if there is any point in joining the Dennis and Co class action.  I voted No of course to the proposal, but wonder if the company goes broke if there is any point risking $800 just in order to become a creditor.

Does anybody know if the legal costs are considered tax-deductible.  As a primary producer, I would think that they are as I am paying money to deal with the failure of an entity that failed to manage my assets.  But I am no tax-accountant, and mine is on holidays at the moment.


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## wooduk (14 January 2009)

*Re: Dennis and Co Action Fees*



gavinabrown said:


> I am still trying to work out if there is any point in joining the Dennis and Co class action.  I voted No of course to the proposal, but wonder if the company goes broke if there is any point risking $800 just in order to become a creditor.
> 
> Does anybody know if the legal costs are considered tax-deductible.  As a primary producer, I would think that they are as I am paying money to deal with the failure of an entity that failed to manage my assets.  But I am no tax-accountant, and mine is on holidays at the moment.




There are pages prior to this that ask questions and answer some of your anxieties,but do not direct or answer your query,about Dennis and co

the point is this ,when the titanic went down,some people survived the sinking only to freeze to death in the icy waters,while others ---a monority 
got a seat in the liferaft.


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## wunna (14 January 2009)

*Re: Dennis and Co Action Fees*



gavinabrown said:


> I am still trying to work out if there is any point in joining the Dennis and Co class action.  I voted No of course to the proposal, but wonder if the company goes broke if there is any point risking $800 just in order to become a creditor.
> 
> Does anybody know if the legal costs are considered tax-deductible.  As a primary producer, I would think that they are as I am paying money to deal with the failure of an entity that failed to manage my assets.  But I am no tax-accountant, and mine is on holidays at the moment.




I'm a 2000 and 2006 plantation investor and like all of you I have voted No (twice!). As far as I know legal costs are NOT tax deductible and ATO sees as a capital enpense.


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## SDE (14 January 2009)

> worst case scenario..... noone offeres to manage the trees..... i will open a management company to manage the trees. mate they are trees..... you just insure them and watch them grow... its not your mothers tomato garden where oyu have to talk to them to see them grow




Slim

Sounds like you are in for a big year.

A few posts ago you were a solicitor who was going to run a case against GS. (Post 1262)

Now you are forest manager. 

I admire your multifaceted talents.

Good luck!


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## SDE (14 January 2009)

Investor1 said:


> Hey Guys,
> 
> Have any of you been following the news regarding the introduction in 2010 of a Carbon Reduction Pollution Scheme (CPRS) in Australia?  An impost on the use of carbon.
> 
> ...




The land and the trees have to belong to the same entity to get the carbon credits. As the land belongs to GS and the trees currently belong to the MIS investors, the revenue to GS will be nothing.


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## doctorj (14 January 2009)

Ladies and Gents,

Until recently, this thread has been one of the most robust discussions at ASF. The arguements for either side have been well researched, thought out and presented. People have largely stuck to the topic at hand rather than attacking the poster. 

Thanks to these high standards, shareholders and MIS investors alike have had the opportunity to learn more than they otherwise might through company announcements. 

Any posts that threaten that high standard will be removed for the benefit of all those mature enough to participate in a productive fashion.  We have already removed a few posts in the past few hours and will continue to monitor this thread closely.

Thanks for your cooperation.


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## ThePav (14 January 2009)

The notion of the scheme's taking control of GS would be an attractive proposition if the company was in a more sound financial position. Unfortunately this ship is grounded and it will take a king tide to get it floated again. The scheme's in isolation are a far more attractive proposition. 

Regardless of who managers the schemes these schemes have a legally binding lease agreement over the land. If the bank takes possession of the land and then sells this land to another party that party is legally obliged to honour the lease agreement so the ownership of the land is irrelevant. In fact Great Southern is currently selling such land to help keep the creditors at bay. This is a sign of their desperation. To sell land that is encumbered by lease you have to offer it at a huge discount as the purchaser is unable to do anything with it while the lease remains intact.

I believe project transform was designed primarily to gain access to the cattle properties to sell them to get cash to pay their $100m liability that is due in September. 

Any arrangements regarding carbon credits are still a long way off and highly  speculative. Owning land and trees, owning just trees, owning just land, who knows? I thinking the story of combining the land and the trees is convenient and Great Southern have decided to run with it as it works in their favour.

Also I would like to make comment on the 21% of voters in the 1998 project that have voted yes to the proposal. How could you? Wait 12 months and your sure to get a lot more than you are currently being offered. The only thoughts I have is that maybe it is a reflection management ownership. 

I know there are a lot of people that just blindly follow their advisors opinions and this could be resulting in yes votes. If you have an advisor that is pushing the yes vote my suggestion is that you need to look around for a new one.


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## Guff (15 January 2009)

I feel the sale of assets is a form of entering into further form of debt for GTP, primarily because of the MIS require the land to be leased back -- effectively the same as interest only payments.


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## Grumpy Old Man (15 January 2009)

ThePav said:


> Also I would like to make comment on the 21% of voters in the 1998 project that have voted yes to the proposal. How could you? Wait 12 months and your sure to get a lot more than you are currently being offered. The only thoughts I have is that maybe it is a reflection management ownership.




I agree with you Pav.  I can also imagine that GTP as a company in times of plenty, possibly re-invested in their own MIS scheme?  You could probably find this in their accounts if you looked hard enough I suspect.   

Would there be institutional investment in something like these MIS?


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## wooduk (15 January 2009)

SDE said:


> The land and the trees have to belong to the same entity to get the carbon credits. As the land belongs to GS and the trees currently belong to the MIS investors, the revenue to GS will be nothing.




you have to be kidding,when carbon credits were first being touted  Iasked gtp if I was entittled tothe credits,Iwas told you are not because you are only in it for a short time(10 years),it was indicated that it was a long term benefit and you do not own the land.


When the options on taking the coppice on the same lots if you invested after the first crop wre withdrawn you needed to remind yourself it was a two-way street,that is an option

by the way DOC,  I have noted your statement


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## drsmith (15 January 2009)

There was an article in today's (Thursday's) West Australian on this. 

I can't find it online but it was a more interesting read than the West's online article from Tuesday (13/1/09) which was just a rehash of GTP's ASX release.


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## brty (15 January 2009)

Just trying to sum up all the for and against arguments here, it dawned on me that what Investor1 is saying is that the shares are worth more than 17 cents.

This may or may not be the case. My arguments are/have been that they are not.

Assuming that Investor1 is correct and the shares do go to a much higher level and the company flourishes at some point in the future due to carbon credits/ new MIS/ high woodchip prices, then why would anyone buy them at ~68? cents a share when they can buy them for 17 cents??

and pay tax for the effort.

Sorry Investor1, you don't have any arguments to explain why this is a good deal for MIS holders, all you're really proving is why you think the share price is undervalued.

brty


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## Investor1 (16 January 2009)

brty,

You are starting to see the point.

If the share price is undervalued and if the Project Transform is good for the company and therefore the long term share price, the issue may be the MIS investor is short being a shareholder and long being an MIS investor.

At $0.17 share, the MIS may be able to buy up many GTP shares and any perceived loss they make on the MIS sale, may possibly be more than offset by appreciation in share price, even in an after tax sense.  

But in an after tax sense, the MIS investor may be improving their position if they buy more shares.  The share gain may be on CGT account and future gains may be able to be deferred indefinitely if shares are not sold.  If trees are harvested, less tax income deferral opportunity.  The current scheme seems to have a low actual assessable component and most of you can obtain tax advice to manage the situation.  Your future company may even be able to help.

If you value the assets of GTP and the value of MIS investor trees, the sum of the two may be more than them separated.

The issue may be, MIS investors are currently not big enough shareholders, or alternatively, the MIS investors consider they are not receiving enough shares for their interests.  The structure can be balanced by MIS investors buying shares at $0.17 and becoming shareholders.  BE ON BOTH SIDES OF THE FENCE.  HOW OFTEN DOES SUCH AN OPPORTUNITY ARISE?  However, it may not take much to make GTP shares greater than $0.17 if Project Transform was to succeed.

Currently, in my opinion MIS investors are loosing opportunity to improve their position and MIS investors destroying possible wealth.

I consider the MIS investors should do more research on the value of the assets of GTP and also their assets in today's environment.  

Replacing the management may be so much easier and cheaper than the approach being promoted generally at the moment.


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## ThePav (16 January 2009)

Investor1 I have to say I do share the same concerns as you regarding the asset valuations.

Investor1 why are you not out their buying shares? why isn't anyone out there buying the shares? It looks like about $1m worth of shares have been traded in the last two weeks which is nothing. The analysis has been done on this company. It has from what I can tell five major issues (apart from the management)

1. The current financial show a $68m loss. Trading losses with such high debt levels is a very very bad sign. This alone would be enough to have investors shy away. Until they turn over a profit any smart traders are going to keep away.

2. MIS sales have always been the driving force of this company, last year they saw a significant reduction in this area. The next round of sales will be even lower, partly due to project transform, partly due to the general economy. This is only going to drive this profit position down further from an already negative position

3. Asset valuations, MIS companies have a reputation for paying above market to acquire assets. I don't have any confidence in the values on the financial statements. 

4. No matter how you spin it the sums don't added up. I'll probably get my tax done in about 9 months from now, that’s when I will have my tax liability. To pay this liability I will have to sell my shares. Even if the share rises 300% to .50c (in a dead share market) I would rather take the risk with the project return.

5. Share offers like this inevitably drive the share price down in the short term. The market is not currently trading with large enough volumes to bring this price back up.

In my opinion the offer is too bad to consider. It is almost paramount to a donation and I am not in a generous mood.


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## bv2726 (16 January 2009)

The share price for GTP is "up" 17% today (on yesterdays close!). Is today the final day for acceptances?

I am a little nervous - I have Cattle and my project was at 68% acceptance. (With my NO in that). I don't want any shares. 

Anyone think that the share price going up so much today may indicate something (along the lines of yes, they are going to seize my Cattle and have some assets to sell)...

Just wondering. I wonder how long I have to wait until GTP issue a statement....


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## Jackob (16 January 2009)

BV,

I don’t think a 17% share price rise would represent any significance at present.  In my view, GTP will sooner or later go bust.  

GTP has to pay $80m p.a. for debt interest and needs at least $100m p.a. to keep the company running and to maintain the existing MIS projects, but its cash flow is drying up now.

GTP has $105 million in corporate debt to pay off in September 09, and if it could get the 75% “yes” votes for all the cattle projects, it might be able to sell the cattle land for at most $130m according to itself.

So how long would it last?

I suspect after the vote the share price would collapse to under 10c before any "yes" Cattle project investors could cash any shares.


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## drsmith (16 January 2009)

Confucius say's it's easier to be in a generous mood when it's someone else's money growing on the trees.


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## wooduk (16 January 2009)

Trading halt -price sensitive to project transformation  announced at 6:30 p.m. today at asx.

Probally give a clearer view at what the decisions investors will go from here and what gtp will do in the foreseeable


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## wooduk (18 January 2009)

ERNST AND YOUNG FINANCIAL STATEMENT 29/12/08'

VERY GRAVE STATEMENT IN REGARDS TO GTP CONTINUATION


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## ThePav (18 January 2009)

Hey Wooduk,

Have you only just picked up on that? It has been discussed numerous times on this board.

Great Southern are going down the tube and the auditors are covering their ****. Most people would have been able to put two and two together long before EY came out and pointed it out.

Vote day not far off. The cattle investors are the only ones who have to be concerned. Not sure why the YES vote is so high for cattle investors as they are well and truely getting ripped off. Must have been a few under the table transactions going on.


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## bv2726 (19 January 2009)

ThePav said:


> Vote day not far off. The cattle investors are the only ones who have to be concerned. Not sure why the YES vote is so high for cattle investors as they are well and truely getting ripped off. Must have been a few under the table transactions going on.





I was thinking about this - when GTP first sent me a letter they made a mistake for the Cattle investors. They said that they would give me shares for my cattle and it would be worth a certain amount. 

They used the number of heads of cattle (instead of the number of droves) and a share price of over $1. It was amazing...the figure that they offered at first would have meant a big yes vot for me.

Then they sent another letter later...apologies...blah blah blah. With a much lower figure.

Do you think lots of cattle investors didnt read the next letter and think they are going to get the first amount?

(Just a theory).


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## wooduk (19 January 2009)

ThePav said:


> Hey Wooduk,
> 
> Have you only just picked up on that? It has been discussed numerous times on this board.
> 
> ...






 DOH!on the auditors opinion,yes   QUACK!             
 JUST GLANCED  ,initialy thought it was another trip down the yellow brick road


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## Grumpy Old Man (19 January 2009)

So what happened today with the vote???  

Was supposed to be at 9am WA time?  No news at all on GTP site...


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## wooduk (19 January 2009)

Unconfirmed reports indicate,trees voted down and cattle crossed the line

no numbers----as yet,

what can be construed from this thin information needs to tempered with proper analysis

After hearing what is happening in the Australian economy today,I personally wish a constructive dialogue that either has the directors listening also to the mis investors besides the creditors

I am living in laa-laa land


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## edliw (19 January 2009)

This delay, I think it just shows the arrogance of the company directors. There has been adequet time for them to inform the market of the results.
How long dose one of these meetings take, even for Perth Time.


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## drsmith (19 January 2009)

Perhaps they need to inform the administrators first. They might have shut up shop for golf at 3.

Only joking


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## wooduk (19 January 2009)

edliw said:


> This delay, I think it just shows the arrogance of the company directors. There has been adequet time for them to inform the market of the results.
> How long dose one of these meetings take, even for Perth Time.




forum members,
               James Rowe requested a trading halt as stated in a 2page statement that has been posted on the asx as price sensitive. 

ASX has granted it and the company is in pre-open stance
ASX has indicated this position ( pre-open) until  Wednesday the 21st  at the start of opening at the latest.

KEEP


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## slim pickins (19 January 2009)

i am sweating away in my indonesian hotel room, thinking it must be just as hot under the collar for the GTP directors right now hauled up in their "fÃ¼hrer bunker".

why is there no time to issue a statement? are they are busy feasting, dancing, singing, while their world falls apart around them?

i hope the GTP headquarters are not taller then 2 stories. we wouldnt want people jumping out the windows at a time like this.

info pleeeeease


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## doctorj (19 January 2009)

slim pickins said:


> i hope the GTP headquarters are not taller then 2 stories. we wouldnt want people jumping out the windows at a time like this.
> 
> info pleeeeease



It is taller than 2 stories, but I don't think the windows open.  GTP headquarters was previously the home of former gold miner Sons of Gwalia.  I wonder who will be next.  If that building could talk...


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## ThePav (19 January 2009)

Maybe everyone that voted YES had a moment of sanity and attended the meeting in an attempt to change their vote to NO?

You'd expect an announcement early tomorrow morning. They were confident with the cattle in there last announcement but they only had 68% that is still some way to get to 75%. Probably no point speculating as we'll know soon enough. Either way they are doomed, cattle will only keep the company afloat temporarily. Not sure cattle investors realise that though.


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## wooduk (19 January 2009)

doctorj said:


> It is taller than 2 stories, but I don't think the windows open.  GTP headquarters was previously the home of former gold miner Sons of Gwalia.  I wonder who will be next.  If that building could talk...




HEY!
      A bit of decorum,as a valued mis-adventurer----investor sorry,
I take this momentous occassion in seeing the shares to increase by an average of 4.7083333333333333333333333333333333333333333333333
per month when they hit 75 cents in 12 months time(KPMG or BUZZ box) said so!

It must be the heat and smoke from my forest estate.

P.S. Sons of Gwalia,rings a bell ?------------ OH!  yes 
                    Dennis and Co.

666


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## Forenth (20 January 2009)

Don't forget 75c price was if all the schemes were approved. If only cattle (at best) were a yes then the price not making 75c is OUR fault! All those who voted no put your hands up, hehehe.

I can see that argument being used as the excuse for the price failing their forecasts. Its the perfect back door for them. After all, GSL directors are only paid millions in total, how can they be expected to get anything right on those paltry numbers. Its not Macquarie Bank after all


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## bv2726 (20 January 2009)

GTP have issued a statement to the ASX - the Cattle projects have both reached the 75% mark.

The 2006 project was 75.8%. 

I cannot believe that now I am going to lose my cattle and get given dud shares and have to pay tax even though I said no.


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## Fatcat (20 January 2009)

bv2726 said:


> GTP have issued a statement to the ASX - the Cattle projects have both reached the 75% mark.
> 
> The 2006 project was 75.8%.
> 
> I cannot believe that now I am going to lose my cattle and get given dud shares and have to pay tax even though I said no.




They really are grubs. Surely no financial planner would ever touch them again. (Storm??)

What is the end result on number/value of shares to be issued to the cattle "investors"?


----------



## ThePav (20 January 2009)

Thankfully the trees didn't go over. We need to arrange an new RE ASAP before the ship goes down. I think the winegrape projects should also be looking at a new RE.

I have to say I feel sorry for the cattle voters that votes NO that really sucks for the others well I can't help but think that perhaps you deserve each other. You need to start taking ownership of your poor financial decisions and now you need to swallow your bitter medicine.


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## wooduk (20 January 2009)

bv2726 said:


> GTP have issued a statement to the ASX - the Cattle projects have both reached the 75% mark.
> 
> The 2006 project was 75.8%.
> 
> I cannot believe that now I am going to lose my cattle and get given dud shares and have to pay tax even though I said no.




I believe you have re course,Dennis and co,

curious as to how many individual and gtp institutional investors made up this vote?

Also the punters that voted for this will get a rude shock unless they wake up
and realised that the intrinsic value is not there for them and reverse their vote before the cooling off period expires


----------



## Forenth (20 January 2009)

Interesting that 75% or more cattle investors voted yes but less than half that took the individual offer. Less than half of the yes voters were happy to say yes but didn't want to go it alone?

Well that might keep the banks off GTP for a while. Thanks to the cattle the plantations will be harvested as per the contract. To all the cattle project NO voters I am really sorry, they have inflicted the losses and tax on you.

I still wonder how an individual investment contract can be torn up by one party and the investment seized against the wishes of the investor, all under the guise of corporations law? Aren't they separate sections of law? That would imply that ANZ or Colonial First State can seize investments against an investor's will if they can sway enough OTHER individual investors.

HOW DOES ASIC LOOK THE OTHER WAY? Surely this is EXACTLY the situation they were supposed to stop?

PS. In my plantation prospectus it says twice that GSL is under no obligation to buy back investors' woodlots. How's that for a misleading implication!


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## wooduk (20 January 2009)

ThePav said:


> Thankfully the trees didn't go over. We need to arrange an new RE ASAP before the ship goes down. I think the winegrape projects should also be looking at a new RE.




i am open to any ideas,but at the moment rhodes has stated he respects our decision and we be bussiness as usual.

what this means is that you and me  and others will need to be more vigilant and more proactive in 

1  getting in writing that the contract will be honoured as an MIS investor,

meaning no shfty bussiness in changing co.constitution to grab trees

2 remember colesy said it was in the best  interest of investors

3 actually go and see the lots ,I have asked the locals and gauged the feel from them

4 we also started on this forum, as individual investors now maybe its time,to get properly organisd, the tree eaters will be back my feelow hobbitts


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## slim pickins (20 January 2009)

indeed the tree eaters will back soon. id say in a years time... i have no doubt they are going to carry on with the project "eat trees" they will slowly pick off the easy taregets. the tremilally ill, the old the lame, so they will slowly try to acquire the magical 75% of the years' investment. 

until everyone relaises that 75% of MIS means squat. i mena why 75% why not make it 88% or 73%

i think we knwo what ASIC is. its a straw man in a corn field. its there to tell foreign an local investors there is regulation. there isnt in terms of protecting from corporate fraud.

there is no doubt the courts will uphold the sanctity of the contract. there are some constitutional law issues here as well. when its all done. gtp will be buried and i can see right now that laws were broken in ths whole afffair.

noone is above the law.


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## Forenth (20 January 2009)

They did say only tax law stopped them from including projects from 2004 onwards. So in 10 months the 2004 investors will be getting their explanatory memorandum.

Slim, don't destroy GSL until the 2000 harvest is complete. I need my distribution!


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## wooduk (20 January 2009)

Forenth said:


> They did say only tax law stopped them from including projects from 2004 onwards. So in 10 months the 2004 investors will be getting their explanatory memorandum.
> 
> Slim, don't destroy GSL until the 2000 harvest is complete. I need my distribution!




as 2004 tree hugger,Iwill do my utmost Forenth to realise your dream or go down screaming

I am voting      NONONONO


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## slim pickins (20 January 2009)

Forenth said:


> They did say only tax law stopped them from including projects from 2004 onwards. So in 10 months the 2004 investors will be getting their explanatory memorandum.
> 
> Slim, don't destroy GSL until the 2000 harvest is complete. I need my distribution!




hehehe, i have no doubt they are preparing the explanetory memorandum right now. i can see it now.... "dear investor, what better way to cut your capital gains tax than by eliminating your capital gains. by voting yes, you can do just that!!!" 

i dont have to do anything to destroy GTP. the directors will do that all by themselves. but i think all those that have suffered a loss, real or imagined should be able to take a chunk out of this beast, both before and after insolvency.

am i alone in thinking that watching trees grow is not that hard? am i alone in thinking that selling woodchip is not that difficult?

you can buy and sell woodchip contracts on the chicago mercantile exchange. its not rocket science. just because the traders wear expensive suits and talk funny dont mean that they are any more sophisticated then a khazakstanian fruit wholesaler.

and who will turn the wood into woodchips.... well our federal governement is busy swellign the ranks of the unemployed, soon we will be able to find despearte day labourers with signs "will work for food". 

if a new managenet company takes it all over, its no problem!..... if they dont...... its even less of a problem!!!


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## drsmith (20 January 2009)

ThePav said:


> I have to say I feel sorry for the cattle voters that votes NO that really sucks for the others well I can't help but think that perhaps you deserve each other. You need to start taking ownership of your poor financial decisions and now you need to swallow your bitter medicine.



No one deserves to have such a fundamental change in their investment forced upon them by the decisions of others.

As has since been noted Great Southern could try again so MIS investors (in the later schemes in particular) should not necessarily count themselves as being out of the woods before their trees are harvested.

One possibility is that Great Southern could run this buyout on an annual basis in an attempt to creep towards the 75% threshold.


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## wooduk (20 January 2009)

slim pickins said:


> hehehe, i have no doubt they are preparing the explanetory memorandum right now. i can see it now.... "dear investor, what better way to cut your capital gains tax than by eliminating your capital gains. by voting yes, you can do just that!!!"
> 
> i dont have to do anything to destroy GTP. the directors will do that all by themselves. but i think all those that have suffered a loss, real or imagined should be able to take a chunk out of this beast, both before and after insolvency.
> 
> ...




Nothing is going to save great southern  what you are seeing are the death rattles of a badly managed company .

If I was a director I would  hurry the process up so I coulld pick the carcass over with my gross payout when the fire sale starts


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## Investor1 (21 January 2009)

Slim Pickings,

Tell me how you sell woodchip?

Consider what is happening to BHP and RIO regarding selling even easier commodities.  Also consider the amount of the cut they will experience in coking coal for 2009.  The falling Aussie exchange rate relative to the yen and USD is not helping that much.

BHP and RIO can cut production until the world markets improve.  They can preserve their resource assets for better days.

MIS Investors have a finite time under their leases to harvest trees if Great Southern goes under.

You should begin your research regarding the spot timber market.

You should also research why GMO (US funds manager) likes trees.  One point they make is, in downturns, if you own the trees and the land, you do not have to cut the trees down.  

Good luck if you have to sell your trees in a down market, because Great Southern goes under.  Considering reading all the press, I am not sure there is any sector that is not expecting decreased demand for product.  Like the decreases in prices for other commodities, the reduction in prices for timber may be significant.

If you accepted the Great Southern offer, there would be no set harvest date.  The trees could keep growing until the market improves.

Seriously, I think the MIS Investors should fund an independent valuation report based upon expected 2009 and beyond demand and prices of their trees from an advisor such as URS Forestry or Poyry (Grumpy Old Man will confirm their suitability).  I am sure the market price for timber is likely to fall during 2009.  Maybe then the MIS investors will come requesting a new deal from Great Southern.  

If you think that will never happen, maybe the MIS investors should begin requesting to buy the land from Great Southern.

Seriously, if the free on board price of timber falls, it is not the harvesting crews that take the full extent of the loss.

If you understand what is happening to the margins in mining for BHP and why many mines are closing down (i.e. stopping production for a while), you may understand the similarities between timber plantations and mineral mines.  Plantations can also become uncommercial when the timber prices are depressed (i.e. it costs more to get the trees to the mills than the mills are willing to pay for timber).  However, you wait until the markets improve and you re-open a mine or commence harvesting a plantaion.

Really think about the issues.  You still have time to accept the individual offer to swap MIS interests for shares and then shares for some cash.  It is not that I think Great Southern is going under, but I am not sure trees harvested in 2009 or 2010 will generate net profits for plantation owners after the cost of harvesting and transport.  Even if Great Southern is in existence, the fact the MIS scheme remains means the trees must be harvested at a specific time no matter what.  If that was a corporate decision it would be regarded a very poor business decision.

I guess many of you also wished you sold more shares 12 months ago, but you thought their value was so much more.  Even Aussie bank shares are falling.  When will they stop falling.

Can anyone tell me how many shares in the ASX 200 are higher than they were 12 months ago (provided they were in the index 12 months ago)?


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## Investor1 (21 January 2009)

Dr Smith,

I know how you feel about being forced to sell when it is not your decision.

I cannot tell you how many times I have had to sell my better shares when there has been a take-over and the 90% compulsory acquisition rule came into play.

What are your views regarding ASX listed share take-overs?


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## ThePav (21 January 2009)

Investor1 you're the least objective poster that I have ever seen and that includes all the professional posters working on behalf of companies. Now you are spruiking the individual offer, hilarious. Throw in a set of steak knives and I'll consider it.


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## brty (21 January 2009)

Hi,



> Australian Eucalyptus chip export prices have more than doubled the past six years and are currently US$167/odmt FOB vessel in Tasmania for native species and about US$187/odmt for plantation wood chips. Australia, which is the major supplier of hardwood chips to Japan, currently supplies 34% of the Japanese total import volume.






> Export prices for both pine and Eucalyptus wood chips have gone up substantially in 2008 in Australia as a result of increased demand in Japan and a tighter supply of wood chips throughout the Pacific Rim region, according to the Wood Resource Quarterly.




Investor1, if there is no demand for the woodchips, then why does GTP want the trees??

bye


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## wooduk (21 January 2009)

AFR 21/01/09,page 43

Quote paragraph--- (grat southern will pursue the sale of its extensive cattle operations under plans to slash debt and improve cash flow,but remains saddled with its unwanted plantation assets after efforts to buy out investor stakes in the operations failed).

Further paragraph down states about $88 million of cattle assets would be exchanged for 176 million shares in the company under the proposal including the current level of acceptance on the plantation projects,it would issue a total of 299 million shares.
If my maths are right then the cattle deal works out at 50 cents a share,but add the 123 million shares from the plantations that said yes then a lower figure comes to about rounded up to 30 cents a share.

On that basis,when these shares are put on the share market,it will be like an abbatoir and the cattle shares and trees will be pulped to mince meat.


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## drsmith (21 January 2009)

Investor1 said:


> Dr Smith,
> 
> I know how you feel about being forced to sell when it is not your decision.
> 
> ...



When a listed company takes over another and aquires any remaining minority shareholders under the 90% compulsory acquisition rule these investors are getting like for like (shares for shares).

Project transform is different in that there is a fundamental difference between the two investment types (commodity and shares). The risk profile is completely different. It is more comparable to a bank forcing deposit holders to exchange their money for shares in the bank.

There is also the difference in the compulsory acquisition threshold (75% vs 90%) but even if these thresholds were the same the change in investment type noted above remains.


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## Investor1 (22 January 2009)

Compulsory acquisition can be shares for cash, not just shares for shares.

Regarding demand and prices for pulpwood, like demand for oil, demand for coal, demand for copper, has highs and has lows.

If you don't chop down trees at the time of lows, you can harvest in times when prices are up.  MIS schemes have limited choice as to the timing of when the trees are harvested.

Great Southern if it owned the trees can hold off sales until times and prices improve.

Just like RIO and BHP cutting production.  The world price for their commodities are falling and stockpiles are rising even with their massive announced cuts in production.  Imagine the implications should they say we will not cut production.  They are saving their resources to sell when markets are better.

Regarding bias, I really do not care which way you guys proceed. I just feel you know what I am writing makes some sense and you just don't want to accept you may have made a mistake.

Ignoring woodchips, consider sawlog timber.  Sawlog timber is generally used for houses.  If housing construction falls, do you keep chopping down the same volume of timber.  If so, the mills, the hardware stores will have to discount or they cannot sell the product.  Prices decline.  The value of timber declines.  The value of plantations decline.

Use common sense, think of what commodity other than possibly gold is rising at the moment.


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## bv2726 (22 January 2009)

Investor1 said:


> Dr Smith,
> 
> I know how you feel about being forced to sell when it is not your decision.
> 
> ...





Investor1 - the ASX listed share take over rule of 90% is a rule that has been there in black and white for a long time by the ruling authority, and applies to all ASX listed companies.

The "GTP we get 75% scheme acceptance votes and then we rustle your cows" rule was something that the directors of GTP (or some shifty advisors) made up on the spot, and now they are going to take my cattle without my permission. 

There is no comparison here.


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## wooduk (22 January 2009)

wooduk said:


> AFR 21/01/09,page 43
> 
> Quote paragraph--- (grat southern will pursue the sale of its extensive cattle operations under plans to slash debt and improve cash flow,but remains saddled with its unwanted plantation assets after efforts to buy out investor stakes in the operations failed).
> 
> ...




Cameron  Rhodes is quoted by AFR that the cattle operations provide the most short term benefits because they are very liquid assets in terms of the cows themselves and our(gtp) land holdings.
The forestry projects were always about the long term and the fact we have a high level of individual acceptances provides additional future cashflows andearnings for the business

Should I feel more relaxed knowing that gtp will not need my investment to subsidise the demise of MIS investment any further ?????


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## drsmith (22 January 2009)

Investor1 said:


> Compulsory acquisition can be shares for cash, not just shares for shares.



Compulsory acquisition cannot be shares for cash so I'll assume you mean cash for shares.

Cash would represent a lower risk profile to MIS investors than the timber so that would be in their favour. 

In any case Great Southern did not offer cash as an option. If they did the scheme would have received a more favourable resopnse from MIS investors overall.


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## brty (22 January 2009)

Investor1,



> Use common sense, think of what commodity other than possibly gold is rising at the moment.




Answer woodchips.

Reason, because the US lumber industry is in freefall because of the housing slump. Exports of woodchips as a byproduct of the lumber industry have crashed causing prices to rise. If you really knew what you have been spouting on about, you would have already known this.

Also, just changing the standing trees use from woodchips to sawlogs is not a simple, or the correct option. The tree spacing is based on them being harvested at a young age. Selective thinning would be needed to keep the remainder (this would be an expensive way to harvest). The trees that remain have been fast growing, leaving problems with the quality of the cut timber. Bluegums are nowhere near the preferred timber type for hardwood sawlogs. 

Your option of just leaving the trees standing shows a lack of understanding about basic forestry practices.

brty


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## Grumpy Old Man (22 January 2009)

Investor1 said:


> If you don't chop down trees at the time of lows, you can harvest in times when prices are up.  MIS schemes have limited choice as to the timing of when the trees are harvested.
> 
> Great Southern if it owned the trees can hold off sales until times and prices improve.





I cant help myself...Investor1, are you saying that MIS is a bad way to invest in plantation ownership because there is no control over harvest deadlines?   Doesnt that appear at odds with GTP business model?


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## gorillapolice (22 January 2009)

As I understand it from previous PDS', GTP can at its discretion delay harvesting 10% of the plantation due to depressed prices or poor growth with the balance available for the same option as long as a (corum) 75% of the investors agree.


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## Investor1 (22 January 2009)

brty,

I never said change the regime to sawlogs.

I was only referring to the fact, sawlog prices (being timber) can fall.  You use the word "crashed". 

I am pleased you consider that will not happen to woodchip prices.


Grumpy Old Man,

Regarding investing in plantation ownership, the Federal Government introduced new tax provisions from July 2007 to encourage investment into plantations.  When more of the new incentives are incorporated into new generation MIS projects, the MIS structures will probably have an advantage over other alternative structures, including old style MIS products.  Having said that, I am not aware of many other investment models that are resulting in significant establishment of new plantations in Australia.  In addition, not all MIS product offerings have restricted harvesting periods (i.e. some products offer flexibility in when the trees are harvested).

drsmith,

I am not completely sure regarding company schemes of arrangements, but I think they are becoming more commonly used instead of take-overs and I understand they have a 75% vote test.


----------



## Investor1 (22 January 2009)

gorillapolice,

I don't know the answer.  Can the investors decide to extend their lease if GTP or the landowner does not want to extend the lease term?

Maybe the Bank's receivers have received an offer for the land and the new land owner does not want to extend the lease term to the Growers.  Maybe the new owner is a forestry company that is happy to assume ownership of the trees if the trees are not harvested prior to the expiry of the lease.


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## drsmith (22 January 2009)

Investor1 said:


> drsmith,
> 
> I am not completely sure regarding company schemes of arrangements, but I think they are becoming more commonly used instead of take-overs and I understand they have a 75% vote test.



It's not something i know a lot about so perhaps it's something we both should leave to others.

My response to one of your comments from the previous page is awating a further response from yourself if you have anything further to offer.



drsmith said:


> Investor1 said:
> 
> 
> > Compulsory acquisition can be shares for cash, not just shares for shares.
> ...


----------



## Investor1 (22 January 2009)

drsmith,

I have no connection with GTP.

But, I gather at least currently, GTP could not offer a cash offer for interests.

I would not be surprised if new structured offers would be made to investors in future years.  They may have improved tax profiles (i.e. swap on 1 July rather than in February), or have cash components.  But I assume cash will be only offered by GTP if they had free cash or they had a buyer to acquire the plantation once the scheme was unwound.


----------



## Fatcat (22 January 2009)

Investor1 said:


> drsmith,
> 
> I have no connection with GTP.





I don't believe anyone on this thread believes that for a second. The laughable way in which you try to defend GTP's outrageous proposal blew your credibility about 100 posts ago.


----------



## Investor1 (22 January 2009)

Fatcat,

I think the proposal makes sense.

I think the timing of the proposal could not be worse.  I can understand why people consider they are not getting value, particularly if they cannot shelter their tax on the transfer of their forestry interest.  For those that can manage their tax and have a long term view on capital growth from GTP shares may do better.

For those that think GTP will go under, all I say selling your trees may not be as easy as you think if GTP goes under.

I also have little faith in stock prices at the moment.  I note regulators have concerns with short selling of financials.

I have no connection with GTP. If I was connected with GTP, would I constantly say, once you have majority shareholding, Vote the Board and management out?

I am interested in GTP as I hope to make money from trading.   The NO vote have not expressed any substantive reason for voting NO other than GTP is going under or GTP's management are not nice people.  I am expressing only my thoughts.  I actually don't care what the MIS investors do.

I actually would like the NO voters to provide some real information I can use in making my trading decisions.  They have not convinced me that GTP is going under.


----------



## drsmith (22 January 2009)

Investor1 said:


> drsmith,
> 
> I have no connection with GTP.



Where have I suggested you have a connection with GTP ?



Investor1 said:


> But, I gather at least currently, GTP could not offer a cash offer for interests.



True but it was you who defended GTP's shares for trees on the basis that takeovers can involve cash for shares.



Investor1 said:


> I would not be surprised if new structured offers would be made to investors in future years.  They may have improved tax profiles (i.e. swap on 1 July rather than in February), or have cash components.  But I assume cash will be only offered by GTP if they had free cash or they had a buyer to acquire the plantation once the scheme was unwound.



An obvious and necessary path for GTP will be have further bites at the MIS capital. I expect it to be an annual event for as long as it keeps the company afloat. It won't do much for future MIS sales however so GTP will be heavily reliant on revenue from the future transfer of MIS assets for running the business and to service debt. Unless the MIS no voters change their minds on mass GTP can only expect a trickle of MIS assets over the next few years from this approach.

Once the proceeds from the cattle investments are exhausted the GTP mothership is going to sink and bailing out the water with a teaspoon is not going to change that.


----------



## SDE (22 January 2009)

drsmith said:


> An obvious and necessary path for GTP will be have further bites at the MIS capital. I expect it to be an annual event for as long as it keeps the company afloat. It won't do much for future MIS sales however so GTP will be heavily reliant on revenue from the future transfer of MIS assets for running the business and to service debt. Unless the MIS no voters change their minds on mass GTP can only expect a trickle of MIS assets over the next few years from this approach.
> 
> Once the proceeds from the cattle investments are exhausted the GTP mothership is going to sink and bailing out the water with a teaspoon is not going to change that.




You are absolutely correct drsmith

The jewels in the GS forest crown are the 04, 05 & 06 projects. All up, woodlots totalling almost 280k. (98-03 forest projects total just 153k by comparison). The numbers fall away significantly for the 07 & 08 projects.

Might involve some scare tactics that worked with the cattle projects, like billing for inceased costs, etc.

Is anyone out there willing to start a movement to get an new RE?


----------



## gorillapolice (22 January 2009)

Investor1;

You make some very contradictory statements.

You have stated that:-



Investor1 said:


> I also have little faith in stock prices at the moment.




Then why would you consider voting yes and taking the GTP shares?

You also state that:-



Investor1 said:


> For those that think GTP will go under, all I say selling your trees may not be as easy as you think if GTP goes under.




This may be the case however I sight the case of Australian Plantation Timber Ltd. This company was publically listed (as GTP), planted trees in WA and the Green Triangle (same as GTP) had significant debt (same as GTP) and subsequently was forced into liquidation by its lenders.

For the record the Shareholders which included financial advisers and growers (same as GTP) lost all their money. The Growers however continued to have their trees managed and harvested by ITC. They subsequently received returns from their trees.

Why would this be any different in the GTP case? Keep in mind that GTP or whoever is the Manager is entitled to 5.5% of the Gross Sale proceeds from the eventual harvest. This is a lot of money for managing trees which, once older than 4 or 5 years, requires very little spent on them.

You keep forgetting that this Company and its management have been extremely derelict in the way it’s managed its projects. How can you think that owning shares is any better when the same people are running the company and controlling the assets?

One of the key research fundamentals of Company’s is to look at the Management and their ability and achievements. This lot could not run a Carnival.

They have used MIS investor’s funds to acquire assets only to insult them by attempting to by their investments back for a 10th of their initial value.



Investor1 said:


> I actually would like the NO voters to provide some real information I can use in making my trading decisions.




Here you go, buddy, hope this helps:

*stock⋅brok⋅er*
   /ˈstɒkˌbroʊkər/ Show Spelled Pronunciation [stok-broh-ker]
–*noun*
_a broker, esp. one employed by a member firm of a stock exchange, who buys and sells stocks and other securities for customers._


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## SDE (22 January 2009)

Investor1 said:


> I think the proposal makes sense.




For whom, Investor1?

An exchange of assets at roughly 65% discount for the MIS investors, plus bringing forward a tax liability by several years certainly doesn't make much sense IMO.

The big winners seem to be the high salaried execs at GS. Are you sure you are not a PR spinner for GS?


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## wooduk (22 January 2009)

SDE said:


> You are absolutely correct drsmith
> 
> The jewels in the GS forest crown are the 04, 05 & 06 projects. All up, woodlots totalling almost 280k. (98-03 forest projects total just 153k by comparison). The numbers fall away significantly for the 07 & 08 projects.
> 
> ...




YEP as atree hugger in 03,04and05 ,I am more than happy to be in the frey.
GOM and you other forum pretorians are correct,I have been going to the referal's that state anticipated price forecasts and this continual barrage of the credit crisis as the excuse ,sorry the MAIN xcuse is crap.

It was either an exercise in deception to rort the ATO,or it was sold to advisers by one of the 29 gtp salespersons that either did not know what the company would do  if their financial incompetence surfaced as the disclaimer does not detail what would happen.
So why put a disclaimer ?

The point is this ,up till 2007 the reports gave no significant demise and now drinks all around at gtp HQ as they have delayed the doomsday --for how long?

Let's get 'em


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## ThePav (22 January 2009)

I honestly cannot conceive how anyone can interpret the offer as being in their best interest.

From my discussion with forestry professionals Blue Gum's do not continue to grow after 10 year so their is no point keeping them in the ground any longer. Keeping them in the ground just results in additional ongoing insurance costs and other associated maintenance costs. The woodchip price has remained largely unchanged over the last 15 years and has infact had a droped in real terms, it is hard to imagine that this will change much particularly with the current economic circumstances. So really getting them out of the ground at the 10 year mark makes the most economic sense.

What investor1 seems to ignore is that Great Southern has assets but no cashflow. MIS sale are their major source of cash, that is the issue. If they can't turn over a profit with $315m in sales how are they going to do it with $150m? They are doomed. Their current strategy is to sell these assets so they can continure paying themselves a small fortune. They just hope they can sell these assets faster than their debt repayment requirements.


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## turbo23 (23 January 2009)

Say what you like but Investor1 makes very valid points and like it or not he gets you thinking.... I think he was the first to suggest "you wanted every  second year to accept as long as it wasn`t yours" well it turns out a bit better than that .... those that want it get it and those that didn`t  don`t....Except the cattle but correct me if i`m wrong but cattle people were still paying through the nose..... for GTP`s ineptitude.... (don`t think i`d fancy that either).....i Just hope GTP have enough fire power now to turn this co. around  (atleast till  my trees are harvested)...not sure all the dillution they suggested wouldda been good for them ...(did they expect it ?)
at least for now they are a viable enitity  ...
As far as future MIS sales income go ..... well "there`s one born everyday"..(isn`t there?)(isn`t the Niarobi or Gambian e-mail still making money) as well as greedy F. planners.,.... won`t be me......(but this is what i worry about)... but I live and die by my decisions and pray I make the right ones(seems i haven`t here but this aint over) hope others are prepared to do the same (consider the risks)I won`t die here .... live to fight another day ...and at the end of it i will be 1 hell of an experience wiser ...fwiw
Cannot the tax losses relised be overcome by selling losing shares and buying them back again?(who aint got them ?)


fingers crossed for everyone
t23


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## Forenth (23 January 2009)

We have all realised how incompetent GTP's management are. The business model doesn't work anymore and they aren't updating it except to take over the investments they were contracted to manage for others. I wouldn't mind picking up millions of dollars of assets in return for typing a few more names on the share registry. Where else can you get something for literally nothing? It has cost GTP close to zero for what they've got, its not like they were actually going to pay cash for the trees/ cattle they were after.

GTP's management style can be summed up by this:

Despite the world financial crisis, GTP's debt levels, the low Aussie dollar, the stagnant woodchip price and the very low returns from investments, GTP management will still all get good increases in their remuneration packages and Rhodes won't be paying for his own lunches.

They'll acknowledge there has to be belt tightening. but its you and me who they think should do it, not them. Sack a few office staff but how many directors does it take to run a company into the ground?


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## ThePav (23 January 2009)

I don't understand the mentality of people when they say as long as GSP is around long enough to harvest my trees. Now lets look at the harvest process. GSP hires harvest contractors to cut the trees down and then uses a contract haulage company and a contract chipping company to continue the process and then uses a export agent to arrange the shipment. Now can you please tell me why GSP is a required part of this process? 

Like many people have mentioned before it is the business model that is broke and until this is changed pouring cash into this company is like pouring into a bucket full of holes. As you may or may not be aware this business model rely's on MIS sales and these sales are evapourating. $80m in cattle assets not much when you are looking at $150m loss in annual MIS sales. As you can see there is already a short fall of $70m.


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## Taltan (23 January 2009)

Seems to me there are a lot of predictions here but ultimately GTP fate will be decided by their bankers. Given GTP huge land holdings I would not be surprised if they survive, One cashed up opportunistic land buyer and they would cross the line. If that occurss than the shares would be worth more than the MIS schemes expiring at a pre-determined date. Currently its all about cash flow and I am not sure why MIS investors are so confident selling timber in a market where GTP can't sell land.


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## turbo23 (23 January 2009)

ThePav said:


> I don't understand the mentality of people when they say as long as GSP is around long enough to harvest my trees. Now lets look at the harvest process. GSP hires harvest contractors to cut the trees down and then uses a contract haulage company and a contract chipping company to continue the process and then uses a export agent to arrange the shipment. Now can you please tell me why GSP is a required part of this process?
> 
> Well what I`m thinking is as long as i get cash for my trees and not something that i wouldn`t have in a fit (and would leave me with a tax bill).I`ll live with it
> And correct me if I`m wrong but aren`t all growers in the same plantation all tied together ? Procceeds are split according to the amount of lots you held .(better returns if you`ve been badly effected by die off)Surely it would be far more economical to negotiate in bulk than the individual grower doing it themselves (a few here and a few there).
> ...


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## ThePav (23 January 2009)

Taltan what you need to remember is that MIS investors were given an offer it is this offer that needs to be considered. The offer was pultry and even KPMG changed their recommendation for the 1998 and 1999 projects, effectively saying you'd be better off not to accept the offer. 

Again the issue isn't really how much can the MIS investor get for their trees it is how much can they get compared to what they were offered by GSP. I'd be happy to sell up my investment if the offer was more attractive. This offer was so far from attractive it was rude and arrogant. You don't have to think that far back and they were basing their offer on a $1.10 share price, that is only 600% higher than where it currently sits - arrogant.

Sure I have revised my estimates down and am hoping to receive about $2.5K per woodlot, from what I have been told is realistic and is about where the 1997 and 1998 payments will finish up. As dissappointing as $2.5K is it is infinitely better than the offer that GSP proposed.


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## Investor1 (23 January 2009)

Hi All,

Will not write too much just now, I have a lot to say for the future.  But I thank turbo23 for acknowledging my comments.

We must all remember GTP started the process when its share price was significantly higher.  The offer made sense, if the world equity markets did not tank during this period, its shares probably would not be $0.17 at the time of the vote.  I have no doubt GTP did not expect that when it revised the offer to have a $0.50 floor.  tell me seriously how many company's shares had a good October 2008, the time of the revised offer.

I bought some Macquarie Office Trust today at $0.20.  It has probably fallen comparable to GTP over the last 18 months.  All these NO voters, please tell me a stock worth picking.  I wonder if any of you ever had some Macquarie related stock.  Tell me a good management today.

Convince everyone that you can make good calls.

By the way, I looked at the World Bank website today.  They see the world price of timber falling significantly over the next 12 months and staying lower for a few years.  When selling wood internationally, consistency of supply can help secure a better price.  Schemes going alone probably cannot offer that.

Regarding finding an alternative forestry manager, I suspect ITC want to look after their clients first, Timercorp maybe will sell their MIS investor's wood first, FEA: what do you think?  Gunns may buy your wood once their mill is in place.

I still think it makes more sense buying out GTP.  I actually think their assets are worth more than their debt.  Their market cap is low and you can always sack the management.


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## drsmith (23 January 2009)

Investor1 said:


> I bought some Macquarie Office Trust today at $0.20. It has probably fallen comparable to GTP over the last 18 months.



Mac. Office pitched it's recent capital raising at a similar level to the share price and it was not forced on any of it's unitholders. Beyond that there are specific threads for discussion on Macquarie and it's satellite funds.


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## SDE (23 January 2009)

Investor1 said:


> We must all remember GTP started the process when its share price was significantly higher.  *The offer made sense*, if the world equity markets did not tank during this period, its shares probably would not be $0.17 at the time of the vote.




Thanks for your correction Investor1. 

However, GTP's price decline is not solely related to world equity markets tanking. GTP's current value is the sum of its future cashflows discounted back to today's dollars. As GTP's cashflows in the foreseeable future are likely to be negative, today's price may seem a little generous.

At 17 cps, this offer was never fair and did not make sense for MIS investors.


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## Grumpy Old Man (23 January 2009)

Investor1 said:


> Hi All,
> 
> Tell me a good management today.





I like the management of Washington Soul Pattinson (SOL).  They have not suffered anything like the volatility of GTP.  They sold a big coal interest in QLD to BHP Billiton last year and now have huge cash reserves waiting to invest in failing companies assets.


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## ThePav (23 January 2009)

Investor1 said:


> Hi All,
> Convince everyone that you can make good calls.




I believe voting NO was a good call and will pay dividend going forward.

You have put forward many arguements that are superficial and loaded with assumptions and predictions. This offer was a little more black and white than the picture you have been painting. 

Great Southern told me my trees investment was going to be a great investment. But they new full well it wasn't a good investment. They had started to commence harvesting of the older projects by then and had good estimates of a number of other projects heading towards harvesting. Now they are trying to sell me another story and I start to wonder what is it that they are not telling me? What is hidden behind the curtain? They want to rob me again that's what I think. The MIS investors don't know any better, give the financial planners a few back handers and they'll do whatever they tell them. It's a greedy world and Great Southern are the epiphany of this greed.


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## tinytim (23 January 2009)

Hi all,

In deciding what to do about the very average performance of management with this company to say the least, and seeing my cattle investment go down the plug hole, I called ASIC to find the best course of action.

May I kindly suggest that any of you with complaints officially first complain to Great Southern Ltd and GSMAL (and we all know that will get you absolutely nothing), and then upon not receiving satisfactory responses, complain directly to ASIC.

My sources within ASIC tell me that if enough complaints are received, they WILL investigate breach of ethical duties including absence of appropriate disclosure and accuracy of the 75% majority votes for the cattle projects.  'Serious breach of directors' duties', and 'misleading conduct' are phrases that are appropriate.

Additionally, I have evidence of the companies propaganda from not more than 12 months ago maintaining the likelihood of up to 25% IRR.
The representation of this type of return by management when they are aware that this will not be the case, is to say the least, a serious breach of directors' responsibilities, and extremely misleading in every case.

Thoughts?


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## ThePav (24 January 2009)

Hi TinyTim,

I think you are onto something. The clear angle would be misrepresentation but this does need evidence. If you or anyone has documentation from Great Southern or one of its employees representing a return that is not achieveable then I'd suggest that you send it through to Dennis and Co plus ASIC. This is a clear breach.

I'd also suggest that the original letter that appeared to go to the cattle project investors suggesting a payout 4 times higher was definitely misleading and could have potentially altered the final vote. I'd be sending this to Dennis and Co and ASIC as well. If one voter thought they were going to get the original figure that was sent out and voted yes based on this thought, this could determined if the 75% was achieved or not. The 75% may have been achieved under false pretence. I think ASIC should require Great Southern to conduct another poll for the two cattle projects with voting information to be presented more clearly. God know how anyone could vote yes if it was presented clearly.


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## Forenth (27 January 2009)

For those who are interested, how to lodge a complaint with ASIC.

Go to www.asic.gov.au and click on 'contact us' for phone numbers etc. If you want to lodge a complaint online:

Go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288

Good luck to all those affected.


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## wooduk (27 January 2009)

Forenth said:


> For those who are interested, how to lodge a complaint with ASIC.
> 
> Go to www.asic.gov.au and click on 'contact us' for phone numbers etc. If you want to lodge a complaint online:
> 
> ...




Sorry forenth
I hate to say it,if you believe that the institution that you are being ripped off by will be investigated as what you are hoping then look at the pedigree of the directors of gtp
x-bankers,connections as x-asic employee,you would have to be niave to believe that asic would be the elliot ness(untouchables fame) and really drill the bull dust that has gas lighted all of us.
Most minnows that invested in gtp have taken their first step and that was to vote this vile proposal to the rubbish bin, investigation and speculation on the aussie stock forum and the insightful comments from contributors has given me to re-think what else can or should be done as gtp as far as I am concerned is on borrrrrriiiiiiidd time and I for myself think asic will do squat

All this anger needs to be channelled so as an outcome that builds on yours and mine vote does not get lost in the etherel of time.


Affirmative action needs to be addressed byi nvestors and I mean all investors,every investor is threatened at losing their money if you have not lost the IRR rate or the DCF or the CPI plus the compounding of your investment then it has not kept up with inflation

To emphasise the situation,to rate our banks as the best in the top 100 in the world,and the biggest CBA is now trading $23 ps .what does that say for for gtp 

What it was and what it is now is acrumbling pile of saw dust

Which reminds me Who was the legal mob that sent that letter to threaten me if I TOOK legal action ?


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## wooduk (27 January 2009)

Watchdog barking up wrong tree
You could never accuse our corporate regulator of acting in haste.

Sydney Morning Herald - 15th Jan 2009

You could never accuse our corporate regulator of acting in haste.

A year after it became obvious to all and sundry that short selling rules were being seriously flouted, the Australian Securities and Investments Commission finally has cranked itself into action.

Curiously, though, it has steered clear of any decisive action, other than banning short selling outright to begin with and now ludicrously limiting the ban to financial stocks.

Instead, it has focused on what is known in financial circles as "rumourtrage" - spreading rumours that would likely affect the share price of a public company and then trading on that. Effectively, it is a form of insider trading except that the information may be false.

Again, the corporate watchdog wins no prize for speed. Your columnist first raised this as an issue on February 21 last year after the then Babcock & Brown boss, Phil Green, thundered on about false rumours being spread about his company's finances. As it turns out, the rumours weren't so false at all.

Now we have the situation where ASIC has trained its guns on journalists, one from this newspaper and one from The Australian.

One reportedly is under review for writing a column suggesting James Packer may be considering selling his remaining stake in Consolidated Media, an item that saw its share price drop 2c. The other apparently is under investigation for writing that Macquarie Group may have difficulty refinancing a portion of its huge debts "at a decent price." It was written the day after Lehmann Brothers collapsed, when the share prices of all investment banks were under pressure and debt markets were frozen.

You don't have to be a detective to deduce the investigations probably were instigated as a result of complaints from the Packer camp and Macquarie.

How ironic then that both outfits have been at the forefront of media manipulation for years, when they were spreading "positive" rumours about themselves. 

During the boom, Macquarie turned the selective "leak" of its deals into an art form. Compliant journalists were rewarded with news of the latest billion-dollar deals, a day before the official announcement. These were duly written up in glowing terms as "exclusive" stories. 

Often they weren't deals at all but merely proposals and the leaks were designed to massage opinion in the business world.

The bank never complained, never issued any rebuttals and certainly never referred any of the "leaks" to ASIC.

The Packer group of companies was equally adept at promoting itself through the business media, whether it was PBL's latest casino deal or a play by another part of the group.

Again, neither ASIC nor the Australian Securities Exchange ever queried how the media got hold of this "information", which clearly was price sensitive and clearly beneficial to the companies involved.

Macquarie's business model is in tatters. Its share price is just a third of its peak and there are no deals to be done apart from internal reshuffling of assets.

The Packer-controlled Crown similarly has discovered casinos aren't the cash cows they appeared to be during the boom with some of its recent offshore purchases written down to zero.

Both Macquarie and Crown are under pressure. Their power to manipulate the press has been diminished because the news at the moment is almost all bad.

For the past year as global markets were in meltdown, ASIC was nowhere to be seen. Its response to the manipulation of markets via undisclosed short selling - Macquarie as an investment bank was heavily involved in the practice - was to issue a warning in March. Then nothing. 

Apparently it also is looking at rumours spread about Challenger, another Packer-controlled company, and Babcock & Brown. 

B&B is teetering on the verge of receivership. Rumours didn't cause that. The company was an overgeared bull market comet that simply burnt itself out.

If the regulator wants to look at anything about B&B, perhaps it should investigate Phil Green's claims last year that the company would make $750 million profit. That one was a tad wide of the mark.


This is an article that was printed recently in the fairfax press,and it confirms my opinion what ASIC is S++T

The end game is legal conflict ,one that was mentioned was Denny and co I think -noot sure but Idare say that after the outrageous rip on the cattle investors,-by the way I have no interest in the cattle that existed.

as the previous contributors have indicated we are now in a crystalising 
state taking stock --------and not GTP stock


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## turbo23 (28 January 2009)

That is extremely sad Woody.....
by the sound of that it doesn`t it matter how many complain ...but who complains ....(so thats what it take for these guys to take action)
Hope James has got some trees...or better yet cattle.After all he`d need a tax break wouldn`t he .(laugh laugh laugh)(Not that they could nor would do a hell of alot)
(always thought that some of the speeding tickets they issued were total clap(disgrace)... as well as some they didn`t)....Might change my name by deed poll ...You think that will work?
God i wish i was rich !

t23
ps ...was a fact I`v`1...no acknowlegement needed... but thanks


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## Forenth (28 January 2009)

As already said, it would appear who complains is more important than how many complain. In November I heard from somewhere (can't recall where) that there had already been around 800 complaints to ASIC. By now that number must be well over 1000.

I wonder how anyone, let alone the majority, who invested in cattle could vote yes to a scheme that returns only 20% of an investment only 18 months old and leaves you to hope the stockmarket improves for you to make anything on the deal?

I can only speculate that the first letter from GTP with the erroneous figures and the threats of substantial fees in the future caused many to give up on their investment. GTP seem to like threats, as indicated by their threat to take legal action against anyone who tries to take action against them.

Anyhow, I would never invest with them again and who else would? Not when ASIC seems to approve of creating the precedent of GTP trying to seize any investment they like. They're supposed to be an investment manager not take it and run. These are all old arguments now, all the no voters (and I suspect a few of the yes ones too) know the immorality of this whole situation even if ASIC have decided to legalise it.

Don't just write to ASIC, write to the media and current affairs shows as well.


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## Fatcat (28 January 2009)

I'm a cattle holder in this pitiful excuse of a company. Any idea what the time frame is on receiving my shares? ie how soon do I have to wait until I can sell up and take my hit?

Cheers


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## wooduk (28 January 2009)

Fatcat said:


> I'm a cattle holder in this pitiful excuse of a company. Any idea what the time frame is on receiving my shares? ie how soon do I have to wait until I can sell up and take my hit?
> 
> Cheers




individual offer closing date --29/01/09

start of asx trading of gsl shares issued to scheme----04/02/09

start of asx trading of gsl shares on individual offer---13/02/09


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## tinytim (28 January 2009)

As sad as it is... i think the reality is - ASIC will do nothing.  UNLESS... The media can get involved... Anyone with media connections?  Or government connections?  If Rudd were to publicly say something about this, and force ASIC's hand to investigate - and the media were involved, maybe we would see a resolution.  Unfortunately, I don't like our chances...  I guess the idea of 'taking the hit' is probably the best that can be done... Screwed if you owe money to Great Southern Finance Pty Ltd


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## tinytim (28 January 2009)

Check out the propoganda... This is evidence of the ridiculous promises... Published Mar 07.

So - where did the Financial Advisors get their literature?  Any of you Financial Planners/ Financial Advisors that have been duped by this saga?  Anyone got any information/propoganda from GSL that people can use as evidence of their clearly massively overstated potential internal rates of return?

"
The Great Southern 2007 Beef Cattle Project presents investors with the opportunity to breed, own and sell beef cattle and take part in this well established Australian industry. Investors
will participate by leasing droves of breeding cows, to be managed by our specialist operators. Investors can expect excellent taxation benefits and the potential for a sound medium
term income from the sale of cattle. Investments are expected to be 100% tax deductible over the first two years of the Project (80% in 2006, 20% in 2007).
The Project
Invest as little as two droves ($5,000 each + GST). Each drove will comprise four breeding cows. Investors are expected to receive annual returns from their proportionate share of
proceeds from the sale of progeny from their droves for 6 years, after year 2.
Features
$5,500 per drove (minimum 2)
IRR up to 24.3%*
Income from year 2
6 year project term
100% tax deductibility
Expected 100% cattle sales contracted
Flexible finance including interest free options and comprehensive insurance available
Closes 15th June 2007
"


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## drsmith (28 January 2009)

tinytim said:


> Flexible finance including interest free options and comprehensive insurance available



For those who have borrowed to invest in the cattle schemes using Great Gouthern's finance option, is the loan from Great southern itself or from a third party financier such as a bank ?

This is perhaps a long shot but if any loan is with Great Southern it may be worth investigating whether the change in the nature of the investment offers a legal way out of the loan.


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## Jackob (28 January 2009)

I think it's important for every one - every investor and every shareholder - to lodge a complaint at ASIC and/or authorities at even higher levels.

The value of a cattle investment has reduced from $5000 to $500 in 18 months. Shares issued at $1+, $2+, $3+ and $4+ with "shareholders share purchase programs" have all reduced to 18c.

$Billions of shareholders and investors funds have gone!  

This company's "business" is absolutely a rort from beginning.


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## Fatcat (28 January 2009)

Jackob said:


> I think it's important for every one - every investor and every shareholder - to lodge a complaint at ASIC and/or authorities at even higher levels.
> 
> The value of a cattle investment has reduced from $5000 to $500 in 18 months. Shares issued at $1+, $2+, $3+ and $4+ with "shareholders share purchase programs" have all reduced to 18c.
> 
> ...




Followed your advice and just lodged a complaint with ASIC. It'll more than likely do little or no good, but I feel better for the exercise!


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## wooduk (28 January 2009)

*Project TTrain wreck Gobble dee gook*
In kpmg report 2003 plantation project,a forestry report was attached.

 The forest report was commenting on the reasonableness of the input in the financial model prepared by great southern.

The forester reviewed great southerns model,in those models GTP predicted yeilds at 10 years for the districts.

Albany-                  152.7m3/ha----164.4m3/ha

golden  triangle-      221m3/ha-----148m3/ha

Qlnd-                     108m3/ha----103.3m3/ha

Yet the same forestry expert notes the PDS for the 2003 that the management is  predicting at LEAST 250m3/ha

    IFTHAT IS THE CASE WHY IS THAT ?

1. No mention is made of the seven shortfalls in the KPMG report?

2. GSL waited until October the 7th 2008 to tell us the lots were now cactus

3.Is not the failure to disclose these abysmal results a breach of GSL continueous disclosure obligations? 

4.Why was it that each time prospectus raising were being made,why were the investors not told?

5.Why did not GSL disclose why they did were not meeting expectations and at only made marginal at best?

6.Could not a participant in the project transformation,as well as shareholders have a case against GSP?


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## edliw (28 January 2009)

Who's an idiot.

 If I had known this was coming down the pipeline,do you think I would have invested in trees in 2008. Been in since 1994-1995 planting, was setting up nicely for retirement income. The plan should be able to be made work, pitty about the incompetent management.

o 
 o
  o
   o little tears. (######) not sure what to put in there


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## Forenth (29 January 2009)

It is now obvious that GSL have been aware for some time that the projects are not achieving their published forecasts. Since they have topped up early harvest distributions and all projects up to at least 2003 are behind where they should be it would be more than reasonable for GSL to downgrade their yield forecasts in subsequent prospectuses. I would think that its would be the only RESPONSIBLE thing to do, to do otherwise would be MISLEADING.

Dear Edliw, as a 2008 investor can you tell us what are the yield forecasts published in that propectus?


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## wooduk (30 January 2009)

Money growing on bluegums
13 April 2000 

The days of investing in agricultural investment schemes purely for tax reasons are over.

The days of investing in agricultural investment schemes purely for tax reasons are over.

 It's not that agricultural investment schemes are no longer attractive tax in-vestment vehicles - they are.

But well managed agricultural schemes - specifically blue gum forest projects - are increasingly good investments in their own right.

But as with all investments, it's important to sort the wheat from the chaff. The big companies in the industry are Great Southern and Timbercorp. They both have product rulings and are included on the recommended lists of Retireinvest, Count, Lonsdale and the like. Both have listed and both project returns in the vicinity of ten per cent. They have also been highly recommended by research house Van Eyk.

Western Australian company ITC is a comparative newcomer and yet last year ITC issued three prospectuses. All three received tax rulings and two were strongly recommended by van Eyk. This year ITC have two soft wood prospectuses with product rulings which were gazetted only last week.

ITC's Richard Jackson says, "It's a difficult investment to knock because of the tax incentives and the fact that the returns are reasonable over a long pe-riod of time. The government likes them because they help with the balance of payments, because they help address green issues and because they contribute to-wards the carbon credit system."

John Cockle is managing director of Financial Foundations Australia (FFA), one of the largest independent financial services operations in the country with $230 million under management. FFA also provides marketing services and re-search to accountants and financial planners.

"In 1997 we didn't like tax effective investments, we thought they were a joke. But because of the superannuation surcharge and the need of some of our clients for tax relief, we reviewed a number of schemes."

The research was telling. "Our golden rule was that first the deal must stack up commercially - it could not just be an investment for minimising tax," says Cockle. "We reviewed 24 projects and we found 21 you wouldn't allow your worst enemy to invest in."

Timbercorp's Robert Hans agrees, "There are a lot of schemes about that put a bad taste in your mouth. In the past, there was no qualitative research done and planners stayed away."

But it was not all bad news. Cockle says that three of the schemes he re-searched came up smelling of roses - and they were all blue gum industry proj-ects. "The thing about investing in the blue gum industry is that the govern-ment has a bi-partisan approach to agriculture - especially blue gum eucalypts," says Cockle. And the reason Australia has such a favourable attitude towards the industry is that, without tree-cropping Australia will soon be unable to satisfy its own demand for wood products - let alone fulfil export demands.

If Australia can get it's act together, Cockle says we are well placed for ex-port to South East Asia, Japan and other markets.

"The demand is for fine paper," says Cockle. "Toilet paper, tissues right through to glossy magazine paper. In Japan every man, woman and child uses 300 kilograms of paper annually, in most other countries, it's between 200 and 300 kilos. At the moment India uses 15 and China 10 - imagine if these countries start using things like toilet paper!"

Added to that argument is the impact of the Kyoto Protocol - an international agreement that sets out a range of binding greenhouse gas emission targets for developed countries. Carbon sequestration credits (credits gained when trees are planted to absorb carbon dioxide and store carbon) can be traded in a way which helps countries and companies meet their greenhouse gas emission obligations.

Although yet to be ratified, the Kyoto Protocol will put a lot

of pressure on companies which are not as environmentally minded as our blue gum industries and that puts Timbercorp and companies like it in a very good posi-tion.

And there's no denying that even though Ralph effectively abolished the '13 month rule' blue gum projects are still tax effective investment vehicles.

"All Ralph has done," says Hans, "is take away tax deductions for advance pay-ments. Deductions can now only be allowed in the year the work is carried out. We believe this is good news because it means that activity must be much more planned and that gives financial advisers a chance to look at schemes more rea-sonably."

The way the deductions work is investors put forward a sum of money which buys a lease and management in the fixed term (usually 10 year) project. All the funds are paid upfront but they are 100% tax deductible. What makes the invest-ment more attractive is that the upfront investment can be as little as 10% with the balance loaned to the investor over 12 months interest free.


"The tax relief is certainly one of the benefits of agricultural schemes," says Cockle. "They can knock out the superannuation surcharge and in a given year, they can help offset things like eligible termination payment (ETP) problems. They can also assist with capital gains tax (CGT) problems or help minimise tax for people with lumpy incomes - those people who might earn a lot in one year and not in the next."

John Young, Chairman and Chief Executive of Great Southern agrees. "They suit people looking to defer income until it's a more suitable time to pay tax, gen-erally these are professionals (doctors, dentists, lawyers), small business peo-ple and executive employees, for example airline pilots. Self managed super funds account for 16% of our business. Agricultural schemes are ideal for super funds and should be one of the products in the portfolio."

But both Young and Cockle warn that investment in agriculture should form only one part of the total investment portfolio.

"From an investment point of view we still think super is number one," says Cockle. "For diversity and spread clients need a range of investments. Agri-cultural schemes should only play a small part in a client's portfolio, it should only be a small part of a total investment/wealth creation strategy."

Young believes that blue gum schemes will become more popular as financial plan-ners become more aware of their validity as an investment vehicle. "Financial planners have been used to selling managed funds. This is a new managed fund into agriculture. It's a tool for both wealth creation and tax planning. We listed in July last year at $1, we're now trading at $4.30. It's capped at $580 million which puts it in the top 200, making it, I believe, the largest tax-effective investment product on the market."

Young also believes that GST will make the schemes more popular.

"Next year, as we enter the PAYG regime will be an interesting time - for some it will mean that they effectively have to pay two years' tax so there will be enormous pressure on the financial planning market in the 2000/2001 financial year to manage tax affairs."

And Young believes that June 30 will be too late to start thinking about tax planning. "Each year clients go to planners close to June 30, hoping for some fancy end of financial year footwork, but there are no more rabbits to pull out of the hat. They must think now. Clients won't recognise this themselves, so it's up to planners to be alert. 2000 is an unusual year with GST. Clients need to get their affairs in order well before 30 June - I don't think many financial planners or even accountants are aware of that."

note the date at the top


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## Belrose (30 January 2009)

I agree that the management of GTP needs to be held to account (preferably removed) and we as shareholders and/or "investors" (and I'm using that term lightly cos I'm counting any of my paperwork with GTP on it as a liability rather than an investment at the moment) should do what we can to get the ball rolling.  Thanks for posting the info re making a complaint to ASIC, I will do that this afternoon.  I look forward to joining you on this forum ... there are certainly a lot of interesting opinions floating around.


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## Belrose (30 January 2009)

Does anyone know what John Young's current investment in both shares and woodlots stands at?  I had the idea previously that he had quite a substantial investment in both.


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## Forenth (30 January 2009)

Does anyone have a 2008 plantation prospectus? I'm interested to see if GSL are still quoting 250m ³ of timber in 10 years. History says they shouldn't be...


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## Forenth (30 January 2009)

John Young has around 49 million shares and dunno how many woodlots. Not a bad increase when my 2000 prospectus says GSL had only 600 000 shares in total back then.


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## Forenth (30 January 2009)

Looking at GSL's directors and senior management, they are ALL bean counters. Trained in counting and creative accounting, but where are the people with knowledge of the industry?

There is a list of ex bank and accounting employees but where are the foresters, the farmers, the agricultural scientists, the climate experts, the people who actually do something? Surely since this is an agribusiness there should be someone, anyone, who's seen a tree in the last 20 years in senior levels.

No wonder they can't get it right. Unfortunately this whole company seems to be run from the bank with a ridiculously unfeasible business model.


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## wooduk (30 January 2009)

Belrose said:


> I agree that the management of GTP needs to be held to account (preferably removed) and we as shareholders and/or "investors" (and I'm using that term lightly cos I'm counting any of my paperwork with GTP on it as a liability rather than an investment at the moment) should do what we can to get the ball rolling.  Thanks for posting the info re making a complaint to ASIC, I will do that this afternoon.  I look forward to joining you on this forum ... there are certainly a lot of interesting opinions floating around.




--------------------------------------------------------------------------------
SORRY BELROSE I DO NOT AGREE AND THE REASON????read below



Watchdog barking up wrong tree
You could never accuse our corporate regulator of acting in haste.

Sydney Morning Herald - 15th Jan 2009

You could never accuse our corporate regulator of acting in haste.

A year after it became obvious to all and sundry that short selling rules were being seriously flouted, the Australian Securities and Investments Commission finally has cranked itself into action.

Curiously, though, it has steered clear of any decisive action, other than banning short selling outright to begin with and now ludicrously limiting the ban to financial stocks.

Instead, it has focused on what is known in financial circles as "rumourtrage" - spreading rumours that would likely affect the share price of a public company and then trading on that. Effectively, it is a form of insider trading except that the information may be false.

Again, the corporate watchdog wins no prize for speed. Your columnist first raised this as an issue on February 21 last year after the then Babcock & Brown boss, Phil Green, thundered on about false rumours being spread about his company's finances. As it turns out, the rumours weren't so false at all.

Now we have the situation where ASIC has trained its guns on journalists, one from this newspaper and one from The Australian.

One reportedly is under review for writing a column suggesting James Packer may be considering selling his remaining stake in Consolidated Media, an item that saw its share price drop 2c. The other apparently is under investigation for writing that Macquarie Group may have difficulty refinancing a portion of its huge debts "at a decent price." It was written the day after Lehmann Brothers collapsed, when the share prices of all investment banks were under pressure and debt markets were frozen.

You don't have to be a detective to deduce the investigations probably were instigated as a result of complaints from the Packer camp and Macquarie.

How ironic then that both outfits have been at the forefront of media manipulation for years, when they were spreading "positive" rumours about themselves. 

During the boom, Macquarie turned the selective "leak" of its deals into an art form. Compliant journalists were rewarded with news of the latest billion-dollar deals, a day before the official announcement. These were duly written up in glowing terms as "exclusive" stories. 

Often they weren't deals at all but merely proposals and the leaks were designed to massage opinion in the business world.

The bank never complained, never issued any rebuttals and certainly never referred any of the "leaks" to ASIC.

The Packer group of companies was equally adept at promoting itself through the business media, whether it was PBL's latest casino deal or a play by another part of the group.

Again, neither ASIC nor the Australian Securities Exchange ever queried how the media got hold of this "information", which clearly was price sensitive and clearly beneficial to the companies involved.

Macquarie's business model is in tatters. Its share price is just a third of its peak and there are no deals to be done apart from internal reshuffling of assets.

The Packer-controlled Crown similarly has discovered casinos aren't the cash cows they appeared to be during the boom with some of its recent offshore purchases written down to zero.

Both Macquarie and Crown are under pressure. Their power to manipulate the press has been diminished because the news at the moment is almost all bad.

For the past year as global markets were in meltdown, ASIC was nowhere to be seen. Its response to the manipulation of markets via undisclosed short selling - Macquarie as an investment bank was heavily involved in the practice - was to issue a warning in March. Then nothing. 

Apparently it also is looking at rumours spread about Challenger, another Packer-controlled company, and Babcock & Brown. 

B&B is teetering on the verge of receivership. Rumours didn't cause that. The company was an overgeared bull market comet that simply burnt itself out.

If the regulator wants to look at anything about B&B, perhaps it should investigate Phil Green's claims last year that the company would make $750 million profit. That one was a tad wide of the mark.


This is an article that was printed recently in the fairfax press,and it confirms my opinion what ASIC is S++T

The end game is legal conflict ,one that was mentioned was Denny and co I think -noot sure but Idare say that after the outrageous rip on the cattle investors,-by the way I have no interest in the cattle that existed.

as the previous contributors have indicated we are now in a crystalising 
state taking stock --------and not GTP stock


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## Belrose (30 January 2009)

Hi Wooduk,

Thanks for the lovely warm welcome to this forum, I especially liked the grumpy red grizzly face.   Here's one for you

I read the article the first time you posted it, and sadly wasn't terribly shocked and horrified.

I'm not saying we should pin all our hopes and dreams on ASIC, I just want to go to sleep at night, knowing that I'm doing what I can within reason to, if not achieve a positive outcome, mitigate a negative one.  I am pretty much resigned to the fact that I have done in $3-400,000, and gotten many of my closest friends and relatives involved.  That's really not a good feeling.  But, at this point in time the most effective thing I can do is try and support some sort of action of this kind.  Probably not involving Denny & Co or whomever they are.

But that's just my humble opinion.  Everyone's entitled to theirs.


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## edliw (31 January 2009)

Forenth.
From the 2007-2008 product disclosure statement, page 20 land selection,all land will be assessed by a qualified forester to be suitable to establish a plantation capable subject to attendant risk of being managed as a whole to produce an average of at least 220 cubic metres gross per hectare on Tiwi Island and 250 cubic metres gross per hectare elsewhere after approx 8-12 years growth.
Woodlots 0.5 hectare on Tiwi Island 0.33 hectare elsewhere.
Interesting I only signed up end June 2008.What was date for first announcment regarding project transform??


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## wooduk (31 January 2009)

Belrose said:


> Hi Wooduk,
> 
> Thanks for the lovely warm welcome to this forum, I especially liked the grumpy red grizzly face.   Here's one for you
> 
> ...





Quite right all the forum writers are voicing their opinions,I was also shocked and eventually became angry at coming to the realisation that i could possibly lose a lot of money and that has been PROVEN with the takeover of the cattle or cows and on the 4th feb see how it will unfold withthe share price and then again watch on the 13th of feb and see what happens then.

DENNIS & CO. not that 2nd guessing name denny is the one that stirred Freehills the solictors for GTP,the same solictors that try to spoooook! people with legalistic overtones of posturing threats that if you sidle up to any person that is prepared to have a dash,we may come after you

I have been threatened with a friend over the border of Pakistan/Afghanistan before it blew up big time in the district of kummar,after knives and kalashnikovs -----do you think a snotty little piece of written diatribe by these monkeys in suits,who by the way wrote workchoices for the previous government  intimidate me?


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## Forenth (1 February 2009)

Edliw,
The first comment I can recall about this was back in August, 2008, only 2 months after you signed up.

It could be thought that GSL saying 250m ³ for new projects even when it seems every project up to 2003 is being estimated to harvest at levels substantially less than that, my own 2000 project is around around 160 -170, are be misleading. After all, they have no historical evidence that their projects achieve 250m ³. If they have a forester still saying that 250m ³ is the number then he/she is not very good at their job since that number is never achieved.

Anyone considering action against GSL could point out that they continue to publish numbers in prospectuses that they have proven they don't fulfill.


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## edliw (1 February 2009)

Forenth
After reading more of the PDS, section on Harvesting page 79.
The Forest Produce is to be harvested within 12 months of reaching harvest maturity as reasonably determined by the RE, but not later than 13 years from the commencement date, unless the RE reasonably considers that it is in the best interests of growers for the harvest to be delayed and the growers resolve to do so by ordinary resolution at a duly convened meeting in accordance with the constitution.
Why are they harvesting when they know there is not 250 cubic metres, is this in their best interest to help their cash flow by harvesting early, it's certainly not in the growers best interest, we have invested long term a 2 or 3 year delay is not going to affect us if we achieve a better return.
Who is supposed to be looking after the growers. Oh thats right it's GSMAL which only recently appointed some "Independent Directors"


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## Forenth (2 February 2009)

At least that's an improvement on 2000. Then they said that it would be around 10 years but would be harvested after 11 years regardless.

To go from 170 to 250m ³ it could be another 6 years. Does that work for investors? I'm sure GSL don't want that, they'd want to get the unwanted project off the land so they can sell another year. In 2nd round crops they don't make so much money from their 5.5% harvest proceeds but in selling another project which doesn't require new land to be bought even if it just grows from the coppice.

Come to think of it, in future years how does a new investor know that they're paying for new land etc when they could be just be given the proceeds from a coppice harvest that wasn't picked up by the previous investor? It would be good revenue for GSL when the land is already owned and the tree already planted.

Too bad no one with half a brain will ever recommend or invest in them again. I don't know how they managed to stuff up such a straightforward concept.


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## edliw (2 February 2009)

Forenth
I will have to re read  earlier PDS's on your 10-11 years. More to the point what value are you going to pay insurance premiums for on your 2000 project


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## edliw (2 February 2009)

PS Forenth
Have never been offered a coppice crop in any of the projects involved with so far, they are keeping them for themselves.


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## Forenth (3 February 2009)

They were offering first choice to invest in the coppice crop to the existing investor, saying that since the roots were established this crop would reach 250m ³ (HA!) a year or two faster than the initial planting. But you would still have to pay the full investment fee of $3000. It'll be a cold day in you know where before GSL ever see another investment from me.

As for insurance, if I recollect correctly the insurance value was the value of the standing trees with an option to insure the total investment value of $3000. I have always paid the option. I may be wrong but I think there was something saying that at some point the value of the trees would be more than the investment (again, HA!) and insurance would no longer be required. That doesn't sound right so I'm not sure what was to happen at that point. I'll have to see if I can find that section again.


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## Belrose (3 February 2009)

Forenth said:


> As for insurance, if I recollect correctly the insurance value was the value of the standing trees with an option to insure the total investment value of $3000. I have always paid the option. I may be wrong but I think there was something saying that at some point the value of the trees would be more than the investment (again, HA!) and insurance would no longer be required. That doesn't sound right so I'm not sure what was to happen at that point. I'll have to see if I can find that section again.




From memory, it was the optional insurance that will no longer be required when the value of the standing timber exceeds the value of the investment.  This I think was supposed to happen around the 5th year? HA!

I only have one woodlot in the 2002 plantation, but a lot of shares.


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## Jackob (5 February 2009)

wooduk said:


> individual offer closing date --29/01/09
> 
> start of asx trading of gsl shares issued to scheme----04/02/09
> 
> start of asx trading of gsl shares on individual offer---13/02/09




So have all the cattle graziers now received their share allotment?

And the others who reveive the offer will receive their allotment in a week?


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## Forenth (6 February 2009)

Director Alice McCleary has changed her holding in the company on account of dividend reinvestment and holdings in the 2006 cattle project being converted to shares. What I don't get is she had 4040 prior to the change, got 566 and 23640 respectively from dividends and cattle projects, but then ended up with a total holding of 43246 shares.

Am I missing something? Where did the extra 15000 shares come from?


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## goodie3shoes (6 February 2009)

We don't know how many of the 2006 cattle projects she converted.
She is a 'true believer' as she held hardly any shares but was happy to 'hold the party line' and accepted the rip-off deal.
But poor old Alice is a quality director that the world would be chasing for other quality companies.A tax accountant from Adelaide.Wouldn't you like to be her client? A pile of GTP shares after buying into the 'failed projects' that she was party too.Nice one Alice,BHP will be desperate to get your independent and incisive board room advice.
Oh,take no notice from me,I am a looney as I invested with GTP and bought the projects believing that they were a lovely company run by nice people.
I am clearly insane and should never be listened too.


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## ThePav (7 February 2009)

I don't think you can single out Alice. I don't think any of the directors have much to boast about. Looking from afar I can only assume that John Young is essentially in control of this board being the founding director and major shareholder. The rest of them are just along for the ride. The fact that they allow a poorly performing executive team remain unchanged throughout a series of bad business decision highlights the fact that really don't have much interest or control of this company. Most other listed companies would have inject some new "talent" to try and turn this company around, not Great Southern. Which is surprising because I am sure if they went to the market place with the salaries they are currently dishing out they would find a pretty strong list to pick from. From what I can tell this executive looks relatively unchanged over the last 4 years. This is not a healthy situation.


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## goodie3shoes (8 February 2009)

I wonder where INVESTOR1 went? 44 posts from 6th January to the 23 rd January.Mission accomplished? His retainer from GTP expired? Maybe his role with the company maintained? A very devious series of posts IMO.Still,hardly critical in the voting. Got me beat how they got the cows over the line. And significant YES votes on other projects. I know my decision to vote NO was based on a genuine understanding of the issues and a real concern for the ongoing viability of the company.


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## edliw (9 February 2009)

Not having invested ?? in the cows, I don't know the true story but the take up seems strange to me. Regards the wood lots appears alot of people only held 1-2 lots, so you have done your money already so why bother anymore. I think the serious wood lot holders voted correctly only time will tell who survives.


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## SDE (10 February 2009)

Got this from Australian Agricultural Co, which was released this information to the market today.

Outlook for 2009

In direct contrast to 2008 the five key earnings drivers for the business in 2009 have all trended very positively:

• In 2009 year to date, AAco’s stations have received more rainfall than in all of 2008. The resulting pasture will underpin cattle production for 2009 and into 2010. However, resulting floods increase the risk of stock losses and damage to plant and equipment. Such potential losses are factored into the Company’s budgeting assumptions and insurance programmes (on plant and equipment) where applicable. 

• Feed grain costs which account for 20-25% of total cattle operating costs have more than halved from their peak of over $400 per tonne. 

• During 2008, fuel costs doubled due to additional mustering, transport and water pumping required during the worst of the drought. Oil prices have since collapsed from their peak of US$145 per barrel to as low as US$35 per barrel.

• The Australian dollar is currently trading around US$0.64, restoring the competitiveness of beef exports in Japan, USA and Korea.

• Finally interest rates have reduced significantly in the past five months reducing the company’s average cost of funds.

The Meat and Livestock Association is forecasting beef prices to rise during 2009 as a consequence of herd rebuilding constraining young cattle supplies.

Seems that GS's tactic of with-holding cattle from sale, the consequent "shortfall" that this engineered, the requirement for a top up from investors and the general panic and confusion of "Project Transform" has had its desired effect. Valuable cattle exchanged for equity at over 70% discount.

Compare AAco view of 2009 compared to that of GTP.


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## mikes (10 February 2009)

i gather the rain and floods drowned all the cattle up north and we have bush fires and drought down south where the trees are.


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## Belrose (11 February 2009)

goodie3shoes said:


> Oh,take no notice from me,I am a looney as I invested with GTP and bought the projects believing that they were a lovely company run by nice people.
> I am clearly insane and should never be listened too.




OMG ROFLMAO, goodie3shoes, I am in exactly the same boat  Don't worry, we might be clearly insane, but we are in good company.


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## Belrose (11 February 2009)

Surprisingly, the SP doesn't seem to have dropped substantially after the 4 Feb shares went live.  Should we therefore hold out some hope that 13 Feb won't kill us all as well?

Does anyone know how the flooding in Northern QLD and the terrible bushfires in VIC have affected the woodlots? Might we be lucky (don't mean to be insensitive to the horrific suffering of those who live/d down there) and get our insurance payout instead?


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## CanOz (11 February 2009)

Belrose said:


> Surprisingly, the SP doesn't seem to have dropped substantially after the 4 Feb shares went live.  Should we therefore hold out some *hope* that 13 Feb won't kill us all as well?
> 
> Does anyone know how the flooding in Northern QLD and the terrible bushfires in VIC have affected the woodlots? Might we be *luck*y (don't mean to be insensitive to the horrific suffering of those who live/d down there) and get our insurance payout instead?




No offense folks but why would you expect anything else if you are basing your financial decisions on these?

although luck may have some factor in traders profits, without managing risk you are going to live in hope in times like these.

CanOz


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## Forenth (11 February 2009)

Belrose said:


> Surprisingly, the SP doesn't seem to have dropped substantially after the 4 Feb shares went live.  Should we therefore hold out some hope that 13 Feb won't kill us all as well?
> 
> Does anyone know how the flooding in Northern QLD and the terrible bushfires in VIC have affected the woodlots? Might we be lucky (don't mean to be insensitive to the horrific suffering of those who live/d down there) and get our insurance payout instead?




The new shareholders are holding their breath in the hope the price will go waaaaay up. No one has to pay tax yet so there's no need to liquidate immediately. Give it until the end of the year or into 2010 when tax bills come due. That's when we might see some volume. Any gain in cashflow for GSL might bump the price up a little, but investors (shareholders now) who need to dump them to pay the tax bill will force it down. Typical volumes are so small it won't take much.

As for flood and fire damage, I don't think GSL has many (if any) woodlots in affected areas so I doubt there'd be any claim.

As for Investor1, he/she is a bit quiet. We all use names which mean something to us, something individual. But 'Investor1' isn't, its a statement more than a personalised name. It might as well be 'IamnotpartofgreatsouthernIpromise1'. The style of writing and arguments used were reminiscent of GSL's official paperwork and just like GSL issues of cashflow were ignored while those of assets were promoted as improving shareprice (which I don't believe).

Like a lot of others I maintain my suspicions. I do agree with Investor1 on one point: Shareholders should find new management.


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## Jackob (11 February 2009)

Belrose said:


> Surprisingly, the SP doesn't seem to have dropped substantially after the 4 Feb shares went live.  Should we therefore hold out some hope that 13 Feb won't kill us all as well?




I heard that some new shareholders of the "Project Transform" (cattle) received their share statements only yesterday.

Many may not know how to sell them.  Some may not care.  Any way, if one had lost ~90% of the value in an investment, how would s/he still care the rest?

But the cruel reality is that there are still more downside risks with GTP share price as the chart and market "depth" apparently showing.  More delay would likely result in more loss...


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## bv2726 (11 February 2009)

Jackob said:


> I heard that some new shareholders of the "Project Transform" (cattle) received their share statements only yesterday.
> 
> Many may not know how to sell them.  Some may not care.  Any way, if one had lost ~90% of the value in an investment, how would s/he still care the rest?
> 
> But the cruel reality is that there are still more downside risks with GTP share price as the chart and market "depth" apparently showing.  More delay would likely result in more loss...




I received my stolen Cattle shares statement two days ago. I am now in two minds of what to do. As per your last paragraph, I agree that the charts appear to show that the share price is heading in one direction (down!)...I dont know what to do.

Sell today, and get some cash back....or wait and hope....


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## Forenth (11 February 2009)

bv2726 said:


> I received my stolen Cattle shares statement two days ago. I am now in two minds of what to do. As per your last paragraph, I agree that the charts appear to show that the share price is heading in one direction (down!)...I dont know what to do.
> 
> Sell today, and get some cash back....or wait and hope....




I encourage anyone who has had their investment taken against their will to continue to harass ASIC (who are sitting on their hands) as well as all media, current affairs etc as well as their local MP's office.

While this scam hasn't affected me I have contacted all these numerous times. Unfortunately they are all ignoring the issue but I have not given up trying. If I was a retiree whose retirement plans have now been destroyed then this would be as bad as HIH to me. Even woodlot investors are still in danger, I have no doubt GSL will be issuing this same plan to other projects within 12 months. They may even be bold enough (ie. arrogant enough) to reissue the scheme to 1999-2003 investors to try to pick up some more woodlots.

People, make some noise!


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## Fatcat (11 February 2009)

Forenth said:


> I encourage anyone who has had their investment taken against their will to continue to harass ASIC (who are sitting on their hands) as well as all media, current affairs etc as well as their local MP's office.
> 
> While this scam hasn't affected me I have contacted all these numerous times. Unfortunately they are all ignoring the issue but I have not given up trying. If I was a retiree whose retirement plans have now been destroyed then this would be as bad as HIH to me. Even woodlot investors are still in danger, I have no doubt GSL will be issuing this same plan to other projects within 12 months. They may even be bold enough (ie. arrogant enough) to reissue the scheme to 1999-2003 investors to try to pick up some more woodlots.
> 
> People, make some noise!




I complained to ASIC, and received a letter a few days later saying the matter and been reviewed, with no action to be taken again Great Southern (aka the grubs). 
My financial "adviser", still counting his well earned commission from the grubs, sent an email suggesting I hold onto the shares given they have traded as high as $3.00 in recent times. Deadset genius this guy.....I'm sure he must be related to the Cassimatis' somewhere along the line.


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## irenebrisbane (11 February 2009)

At least you got a letter Fatcat.  I didn't even get an acknowledgement.  Still waiting to see what happens with our tree lots in the 1998/1999 harvest.


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## Belrose (11 February 2009)

well, for what it's worth, I've added my 2 cents worth through the ASIC complaints form.  Thanks for the details Forenth, much appreciated.  Hopefully if enough people write, they'll do something.


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## cathadfab (13 February 2009)

Thought I would put my cattle investor's hand up and say I have received my Holding Statement in the past few days. I  now own 35460 shares, valued today at .125 cents each, total $4432.50. As I also borrowed the money from Great Southern on a 3 year term, I also now still have to pay nearly $5000 to the company before I own my $4432.50 shareholding. If I don't pay up, the company holds escrow, so I suppose they would pluck my paltrey offering back at some stage.

I never wanted shares. I've never had any luck with shares. I bought cows because they seemed like a good idea. People eat meat. Cow's like to reproduce. It's what they do. The cows just fitted in with how I wanted to invest my money, something I believed in.

I just can't get my head around how the company can issue shares that they say are worth 50 cents, when I only have to look online to know they aren't and haven't been for a very long time. If my 50 cent shares were in fact worth 50 cents, I would be looking at getting close to my money back after factoring tax deductions and the one lonely dividend I had this year.

The only thing I hope now is that the company improves on the stock exchange to a point where I can get some money back once the shares become mine, in six months time, if they last that long. Hopefully too my investment will now help the plantation investors so at least only us cattle folk end up out of pocket. 

Am I allowed to say 'Bastards' on here?


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## wooduk (14 February 2009)

Alas reality has begun to set in,the numbers are in and the realisation of what path people will take is or is coming to the black hole in our investment -----and now to cross the Rubicon into $$$$$$$$$$ oblivion    OR   get 
onto     Dennis&Co


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## drsmith (14 February 2009)

cathadfab said:


> The only thing I hope now is that the company improves on the stock exchange to a point where I can get some money back once the shares become mine, in six months time, if they last that long. Hopefully too my investment will now help the plantation investors so at least only us cattle folk end up out of pocket.
> 
> Am I allowed to say 'Bastards' on here?



Perhaps this a silly question but given the current situation, is it your intention to repay any more of the loan ?


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## cathadfab (15 February 2009)

In reference to whether I will repay the loan, I have to be honest and say, I don't know what my options are. It appears if I don't repay the loan I lose my shares. Even though the shares aren't worth as much as the loan, who knows they MAY increase in value. When I spoke with Dennis & Co they did indicate too that there may be a case in the future regarding the financing aspect of these projects.

It seems I'm damned if I do, and damned if I don't.


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## Forenth (16 February 2009)

Am I allowed to say 'Bastards' on here?[/QUOTE]

Cathadfab,
Send that same assessment to ASIC (again if you have already), and tell them its all their fault! A customer of an investment company has had their investment seized against their will and given in return shares that at the time were grossly overvalued for the purpose and result in you receiving a net loss. Now you're actually paying around $600 for GSL to take your entire investment!

ASIC are hopeless, spineless, useless. Why are they paid at all? I bet they get good money, I want on the job retirement there. Does anyone know who to complain to about ASIC? Who's the federal minister for this rubbish? Get your federal MP to ask him in question time. No one will do anything until television networks do a story about it. Write to current affairs shows, as bad as they are they might be willing to get dirty on your behalf. If it gets to air then ASIC may be shamed into something.


Fatcat,

Make an offer to your advisor to sell your shares for $2.50 if he thinks they're so good and he can make an easy 50c each. Tell him you agree and cash is fine. We'll see how good he thinks they are then.

Where is Investor1 telling us what a good deal cattle investors got?


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## pist'n broke (16 February 2009)

Hello,
Only just found this group, very interesting, very sad too.
I have retired last year and, until now, I left my financial affairs pretty much to my licensed adviser. Trust me, just sign here, we'll do the rest – silly me. 
My wife and I have, as advised,  invested (too) heavily in GS woodlots. About 80 lots spread over 2000 to 2008 projects. Recommended as an extremely safe investment, not linked to on the share market, perfect for diversification and a nice retirement income. Lots of feel good factor, good for the environment etc. (Lots of  raw bovine manure thrown in for free it turns out.)
We were not in the top tax bracket, this was intended as a genuine investment.

Anyhow, all that now looks to be worth next to half a dead duck and we just hope there will be no further cash to pay, because we can't. 
Together with the melt down in our super accounts, GSL guarantees us a pretty frugal retirement.
Thanks a million, guys!

Btw, the same adviser refused to give any guidance on what to do re 'Project Transform'. May be better so! Forced me to do my own digging through the (unreadable) memoranda. 
My conclusions: 
GSL is trying to rip off the investors in a breathtakingly arrogant way. They must be desperate or criminals or both.
KPMG and EY are bought or gutless incompetents or both.
Change adviser, do my own research, they are all in it for the money.

We voted NO on all points. 
Still find it hard to believe they got so many yes votes though. Maybe there is reason to think the woodlots will have negative value by the time of harvest. Not impossible, as GSL surely looks ready to go t1ts up. Nobody might want the timber and the growers might have to pay to have it removed, worst case scenario.

Today's quote from:    www.great-southern.com.au/default.aspx?MenuID=341
“Since listing on the Australian Stock Exchange in July 1999, Great Southern has grown from strength to strength. The company is distinguished by its strong financial position, with*net assets exceeding $750 million. 
The company is characterised by the support of institutional investors, with several leading Australian and global financial institutions included among our major shareholders.” 

Does the 'L' in GSL stand for Liars?  Incredible, this continued arrogance by a mob of  ruthlessly selfish directors.
Maybe I should by a few shares just to be able to cause a bit if a stink, not much to loose there.

Enough ranting for today.


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## wooduk (16 February 2009)

pist'n broke said:


> Hello,
> Only just found this group, very interesting, very sad too.
> I have retired last year and, until now, I left my financial affairs pretty much to my licensed adviser. Trust me, just sign here, we'll do the rest – silly me.
> My wife and I have, as advised,  invested (too) heavily in GS woodlots. About 80 lots spread over 2000 to 2008 projects. Recommended as an extremely safe investment, not linked to on the share market, perfect for diversification and a nice retirement income. Lots of feel good factor, good for the environment etc. (Lots of  raw bovine manure thrown in for free it turns out.)
> We were not in the top tax bracket, this was intended as a genuine investment.




Welcome to the one of many in exactly the same ponzi deal,please go back and read the other contributors and tell us what  your next move would be


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## drsmith (16 February 2009)

cathadfab said:


> In reference to whether I will repay the loan, I have to be honest and say, I don't know what my options are. It appears if I don't repay the loan I lose my shares. Even though the shares aren't worth as much as the loan, who knows they MAY increase in value. When I spoke with Dennis & Co they did indicate too that there may be a case in the future regarding the financing aspect of these projects.
> 
> It seems I'm damned if I do, and damned if I don't.



Unless you are confident that you will be able to sell the shares for more than the loan, check the fine print to see if there is any legal way to avoid repaying the loan.


----------



## pist'n broke (16 February 2009)

Thanks Wooduk

Well, being financially dyslexic, we do not know what to do.
Change adviser, definitely. 
Throw good money after bad? Dennis & Co.?
Sit and hope for the best?
What's a ponzi deal, sounds italian?
I have read most posts for the last 5 months, certainly educational.

Anyhow, not all is bad. 
One of our lots turned into CO2 in the Kangaroo Island fires, insurance paid. At least not all is lost.
A bit of humor? Lifted from: www.great-southern.com.au/default.aspx?MenuID=340

“Nearly 40,000 people have discovered the benefits of investing with Great Southern.”:bonk:


These guys come from a different universe, methinks.

Glad to see they look after their directors, see agenda for the meeting of  19 February 2009 at
www.great-southern.com.au/Key_Dates.aspx


----------



## wooduk (16 February 2009)

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Scams & warnings > Typical scams > Ponzi schemes 


Ponzi schemes

One of the simplest, yet most effective scams perpetrated on unsuspecting investors for many years have been Ponzi schemes.

In these schemes the promoter promises investors a very high return on their investment and says it is secure.

Part of the money deposited by early investors is then used to pay their first dividend cheques or interest. The victims are more than happy to get high dividends. These schemes only require a few people in their early stages to be successful. The swindler continues paying them dividends for a couple of months until they are more comfortable with their investments, and decide to invest more.

They then begin to urge their friends and relatives to invest as well. Soon, there is a steady flow of funds into the scheme, and the number of investors grows.

If the swindler is disciplined about how much money is left in the account to pay "dividends", the scam can go on for many years. Theoretically, if the scheme continues to draw in new investors, it could go on indefinitely. In practice such schemes usually fall over because the promoter starts to spend the money too quickly, or the pool of investors starts to dry up.



Stories about Ponzi schemes


Read how Ponzi schemes operate:
10% (120% per year) - where do you get it? 
Investing on the advice of friends: a warning 
The Wattle Group investment scheme had around 2,700 investors across Australia and raised over $160 million. Investors were told their funds were on-loaned on a short-term basis to provide a return of up to 50 per cent. Instead, it was a 'Ponzi-type' scheme. Read what happened to the people who organised this scam
More about scams and illegal schemes and how to avoid them

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 translated documents 
 asic website
 Last updated: 05/02/2009



This is a definition by guess who!?----ASIC



As PB says 40,000 investors,wooduk says you are on your own,------------

unless! iinvestors get with Dennis&Co.


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## wooduk (16 February 2009)

Forenth said:


> Am I allowed to say 'Bastards' on here?




Cathadfab,
Send that same assessment to ASIC (again if you have already), and tell them its all their fault! A customer of an investment company has had their investment seized against their will and given in return shares that at the time were grossly overvalued for the purpose and result in you receiving a net loss. Now you're actually paying around $600 for GSL to take your entire investment!

ASIC are hopeless, spineless, useless. Why are they paid at all? I bet they get good money, I want on the job retirement there. Does anyone know who to complain to about ASIC? Who's the federal minister for this rubbish? Get your federal MP to ask him in question time. No one will do anything until television networks do a story about it. Write to current affairs shows, as bad as they are they might be willing to get dirty on your behalf. If it gets to air then ASIC may be shamed into something.


Fatcat,

Make an offer to your advisor to sell your shares for $2.50 if he thinks they're so good and he can make an easy 50c each. Tell him you agree and cash is fine. We'll see how good he thinks they are then.

Where is Investor1 telling us what a good deal cattle investors got?[/QUOTE]

Investor 1 was nothing more what you would call a stock puppet,my personal belief it was a clown from sentry


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## wooduk (16 February 2009)

Portfolio said:


> Hi Investor,
> 
> I personally dont think you are a MIS investor.  The big winners out of this are the shareholders and employees / directors so i'm pretty sure your one or the other.  However if you are a MIS investor:
> 
> ...




it warms the heart when a moron like I-V1 gets shot down with his bull****,
GOM,and I apologise to other astute commentators that have been on this forumhave been great inspiration besides educational-------- juuust luv it!


----------



## drsmith (16 February 2009)

The unfortunate reality is that this will be a very ugly corporate corpse when it eventually turns it's toes up.


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## Jackob (17 February 2009)

Pist'n broke,

Sad to read your story.



pist'n broke said:


> What's a ponzi deal, sounds italian?




GTP's MIS schemes, I think, are a sort of “Ponzi Scheme” in a sense that GTP always use the new investors money to support the old existing schemes.  Once it can't get the new money any more, it will run out of money and collapse.

For references, please visit

http://en.wikipedia.org/wiki/Ponzi_scheme

http://en.wikipedia.org/wiki/Charles_Ponzi

http://www.fido.asic.gov.au/fido/fido.nsf/byHeadline/Ponzi schemes

http://www.youtube.com/watch?v=zRTPKcJGwe4

Or you may google "ponzi-scheme" by yourself.


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## Forenth (17 February 2009)

pist'n broke said:


> Glad to see they look after their directors, see agenda for the meeting of  19 February 2009 at
> www.great-southern.com.au/Key_Dates.aspx




Nice to see in the meeting agenda that the directors can acquire hundreds of thousands of shares, and Cameron Rhodes 2 million, at VWAP's that reflect the REAL share price. No floor price of $0.50 for directors!

Investors who voted no and had loans are made to pay extra cash to GSL even after they seize the entire investment, but management can opt in, yes... that's choose to opt in or out independently of any other director's decision, for mountains of shares at the current pathetic share price. One set of share issue rules for investors who don't want one at all, and a completely different one for the mongrels at the top of GSL.

Any cattle project shareholders in Perth should attend and ram this #$%& down their throats. They haven't just tied you up and slapped you in the face, they've now dropped their pants, turned around and you can imagine the rest.

These pigs have filled up the trough at investors expense and are wallowing in it as much as they can. The useless ASIC has probably approved this double standard as well.


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## pist'n broke (17 February 2009)

Forenth said:


> Nice to see in the meeting agenda that the directors can acquire hundreds of thousands of shares, and Cameron Rhodes 2 million, at VWAP's that reflect the REAL share price. No floor price of $0.50 for directors!
> 
> Investors who voted no and had loans are made to pay extra cash to GSL even after they seize the entire investment, but management can opt in, yes... that's choose to opt in or out independently of any other director's decision, for mountains of shares at the current pathetic share price. One set of share issue rules for investors who don't want one at all, and a completely different one for the mongrels at the top of GSL.
> 
> ...




Love your way with words, totally appropriate pictures!

Well, the directors (partly) pulled off this incredible 'Project Transform' against long odds. 
By any reasonable standard they deserve mutual pats on the back and serious pecuniary considerations. Their hard work delayed the demise of GS by at least a year. Well done! 
Double standards? How so, sir? You can't possibly treat pigs and ducks the same, sir. Or they would all fly, sir.
Stand by for the next ripoff.

Thought experiment only! 
If there was a GS director between you and a brick wall, how much damage would be done to the brick wall? (No witnesses anywhere!)


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## pist'n broke (17 February 2009)

Jackob said:


> Pist'n broke,
> 
> GTP's MIS schemes, I think, are a sort of “Ponzi Scheme” in a sense that GTP always use the new investors money to support the old existing schemes.  Once it can't get the new money any more, it will run out of money and collapse.




Thanks Wooduk and Jackob for explanation and links.
Just another slight variation of the ancient, ?illegal? pyramid.
Had to stop digging, otherwise I might need anger counseling, what a dummy have I been! Can't go on kicking the dog.
Had no idea GS was topping up early schemes to make them look better.
When should a licensed adviser, selling the schemes, have known? He certainly pointed out that nobody lost money on the early projects and pushed strongly that much better things are likely to come.
Guess he just repeated the guff in the GS prospectus.

Memo to myself:
Try to forget about the whole GS mess, let the pigs wallow until they burst. Stand back, the smell will not be nice when fecal matter flies freely. Hope for some leftovers, after the vultures have had their fill too.

Stay well clear of financial advisers, check and double check everything.

Get on with live, lazy bastard. Get up and find another job now! 
You have learnt a lesson. Its not the end of the world, lots of people are worse off.
There's always the government pension.........no worries, mate.
Most important: Have look at the stars tonight.


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## wooduk (17 February 2009)

pist'n broke said:


> Thanks Wooduk and Jackob for explanation and links.
> Just another slight variation of the ancient, ?illegal? pyramid.
> Had to stop digging, otherwise I might need anger counseling, what a dummy have I been! Can't go on kicking the dog.
> Had no idea GS was topping up early schemes to make them look better.
> ...




Whoa PB, I do not want you to fold your cards my friend, I don't get  off with my jolleys when you typify that I am not that far outof pocket like you.
Many good people ,probably 40,000 are affected by this legal ponzi. There is now enough evidence to argue for not one but more legal recourse

In the event that the class action is successful but GTP is in liquidation, the successful class action group can file with the Liquidator or alternatively, seek redress against the directors and officers liability insurance policy. 

As an aside, the leases remain in place so long as there is a responsible entity there or a new one is appointed. This means that the Liquidator can only sell the land subject to the leases and can not call upon the growers to remove the trees. This position can be leveraged into a very strong position if carefully handled. You have also got to believe the valuations in the balance sheet of GTP to feel comforted that assets well exceed liabilities. If this turns out not to be the case, the directors may have a separate case to answer.


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## wooduk (17 February 2009)

*STILL WAITING FOR AN ANSWER*






here are the questions again
In kpmg report 2003 plantation project,a forestry report was attached.

The forest report was commenting on the reasonableness of the input in the financial model prepared by great southern.

The forester reviewed great southerns model,in those models GTP predicted yeilds at 10 years for the districts.

Albany- 152.7m3/ha----164.4m3/ha

golden triangle- 221m3/ha-----148m3/ha

Qlnd- 108m3/ha----103.3m3/ha

Yet the same forestry expert notes the PDS for the 2003 that the management is predicting at LEAST 250m3/ha

IFTHAT IS THE CASE WHY IS THAT ?

1. No mention is made of the seven shortfalls in the KPMG report?

2. GSL waited until October the 7th 2008 to tell us the lots were now cactus

3.Is not the failure to disclose these abysmal results a breach of GSL continueous disclosure obligations? 

4.Why was it that each time prospectus raising were being made,why were the investors not told?

5.Why did not GSL disclose why they did were not meeting expectations and at only made marginal at best?

6.Could not a participant in the project transformation,as well as shareholders have a case against GSP?


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## tinytim (18 February 2009)

Wooduk,

You have once again put it very elequintly.  Yep.  Continuous disclosure requirements are out the window!!!!  And ASIC sit back and watch.  I really hope that the amount of traffic this is recieving (Dennis & Co told me about 1,100 so far in the general action), that this makes some noise...

Anyone thought about going to the media to try make some noise? 

The thing that blows me away, is their 2003 Environvest (GSMAL) annual report was so negative (same directors).  Then the prospectus for the 2006 cattle project not only claims to have incredible success opportunities, they have the gall to infer they've never done this before...

Don't know about any of you, but I'm putting my money where my mouth is.  I've joined the Dennis & Co action - and when my solicitor (not dennis & co) finishes looking at the information in relation to the loan i have, I will be looking to cancel the finance contract based on a breach of mutual contractural obligations - they have failed to provide me the service for which i entered the loan.  Amazing that Adelaide Bank were gullible enough to buy their loan book!  What are they stupid too!  Or just also conned.

Gonna go drink some single malt  Might be the last bootle I buy


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## wooduk (19 February 2009)

media will only get involved when the litigation is possibly news worthy,remember there other bad news stories un folding on the stock market and considering gtp quietly slipped under the media radar from the ASX 200 without the drama of ABC,B&B,Alco etc.I do not think asecond tier company in the agribussiness is great headline busters.

Mind you I could be wrong,I have fluffed before an example of that is GTP,anyway I believe the ball is about to roll on the litigation-----I think!
By which legal entity?,that I do not know.

At this point I believe that we(people in the class  action)have a good  case,and I am sure all the twist and turns that have been perpatrated by the directors will be exposed-------------


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## tally-ho (19 February 2009)

wooduk said:


> media will only get involved when the litigation is possibly news worthy,remember there other bad news stories un folding on the stock market and considering gtp quietly slipped under the media radar from the ASX 200 without the drama of ABC,B&B,Alco etc.I do not think asecond tier company in the agribussiness is great headline busters.
> 
> Mind you I could be wrong,I have fluffed before an example of that is GTP,anyway I believe the ball is about to roll on the litigation-----I think!
> By which legal entity?,that I do not know.
> ...





Why would you think that story is not newsworthy? Timing is the key to success. There will be tax time stories and warnings to save people from making the same mistakes will become very relevant. 

Most fun will be, it will piss GTP off big time, because it stops new money coming in from new dummies and the old dummies (that's us) aren't buying anymore. 

All those people with a heartbreaking story, put it down on a piece of paper now, so it's ready to send in when needed. Maybe someone knows a way how we can coordinate things a bit as a group.


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## tally-ho (19 February 2009)

wooduk said:


> media will only get involved when the litigation is possibly news worthy,remember there other bad news stories un folding on the stock market and considering gtp quietly slipped under the media radar from the ASX 200 without the drama of ABC,B&B,Alco etc.I do not think asecond tier company in the agribussiness is great headline busters.
> 
> Mind you I could be wrong,I have fluffed before an example of that is GTP,anyway I believe the ball is about to roll on the litigation-----I think!
> By which legal entity?,that I do not know.
> ...





Why would you think that story is not newsworthy? Timing is the key to success. There will be tax time stories.... and warnings to save people from making the same mistakes will become very relevant then. 

Most fun will be, it will piss GTP off big time, because it stops new money coming in from new dummies and the old dummies (that's us) aren't buying anymore. 

All those people with a heartbreaking story, put it down on a piece of paper now, so it's ready to send in when needed. Maybe someone knows a way how we can coordinate the timing of it amongst ourselves.


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## bv2726 (19 February 2009)

GTPs share price seems on a road to nowhere.

Slowly, it appears people are offloading (or capitulating) their shareholding. (Or something else). What do to here? I have shares thanks to my cattle being stolen from me...I just dont know when to sell out.

The start of this week, the shares were 15cents...today, they are sitting at 11 cents. 

At this rate...two more weeks....and...zero. 

Stupid. I should get what I can for them while I can.....


----------



## Junior (19 February 2009)

Their AGM release today was total rubbish.  No mention of Growers/Investors and what their returns will be like.  Just 10 pages of BS relating to strengthening their balance sheet.


----------



## SDE (19 February 2009)

Junior said:


> Their AGM release today was total rubbish.  No mention of Growers/Investors and what their returns will be like.  Just 10 pages of BS relating to strengthening their balance sheet.




What I found particularly amusing in this AGM release was this piece from CR

_"Our company has been built on the back of a very successful managed investment scheme business and this business within the broader agricultural funds management sector will continue to provide opportunities for our company."_

Successful for whom? Certainly not the MIS investors! I think CR's deluded if he thinks there are going to be many punters lining up to be screwed by GS again


----------



## gorillapolice (19 February 2009)

bv2726 said:


> GTPs share price seems on a road to nowhere.
> 
> Slowly, it appears people are offloading (or capitulating) their shareholding. (Or something else). What do to here? I have shares thanks to my cattle being stolen from me...I just dont know when to sell out.
> 
> ...




As I see it, those who had their cattle converted to shares have been dealt a huge blow to the head.

However, in terms of whether to sell your shares or not, you need to consider a few things:-

The initial investment was over a period of 8 years, with income paid for 6 of those years (3rd year right through to end of the 8th). If you were to sell your shares now, not only would you realise a massive, *massive* paper loss, but would be simply cutting down what was originally an 8 year investment into a 2-3 year investment. 

Given the current market value, I personally would be keeping mine for the time being (if I had any) - given the current market situation and assuming the old cliche that 'things can only get better'.

Most people forget that it's an 8 year investment, they just see a massive initial paper loss after their investment has been converted to shares and panic - they end up selling them off and jumping ship, essentially aborting what was supposed to be another 5 years of investment period.

People need to calculate their options carefully, dot their i's and cross their t's and not panic and go on a sale frenzy simply because they feel gutted that they've got shares for beef.

However, I still fail to see where the 'Transformation' is coming from within the company. It seems to me like it's just the same old management with a whole new spin - they couldn't do it right before, why would they be able to do it now? That's the question i'd be asking if I were anyone remotely involved in this company.


----------



## bv2726 (19 February 2009)

gorillapolice said:


> The initial investment was over a period of 8 years, with income paid for 6 of those years (3rd year right through to end of the 8th). If you were to sell your shares now, not only would you realise a massive, *massive* paper loss, but would be simply cutting down what was originally an 8 year investment into a 2-3 year investment.
> 
> Given the current market value, I personally would be keeping mine for the time being (if I had any) - given the current market situation and assuming the old cliche that 'things can only get better'.
> 
> ...





Some good points to think about there Gorillapolice. Thanks for the post.

I didnt think about the 8 years bit.


----------



## SDE (19 February 2009)

GP

The initial intention of the investment may have been over 8 years. A lot of MIS investors would have structured their affairs to accomodate this.

Cash flow during the course of the project would cover the tax liability as it became due. Due to Project Transform, the tax liability will now arise in this financial year. 

Where do you suggest that the money to pay this tax liability will come from?

Do you pay with cash from other sources and hope that GTP shares increase in value, or do you sell your shares to pay your tax becomes due?


----------



## wooduk (19 February 2009)

tally-ho said:


> Why would you think that story is not newsworthy? Timing is the key to success. There will be tax time stories.... and warnings to save people from making the same mistakes will become very relevant then.
> 
> Most fun will be, it will piss GTP off big time, because it stops new money coming in from new dummies and the old dummies (that's us) aren't buying anymore.
> 
> All those people with a heartbreaking story, put it down on a piece of paper now, so it's ready to send in when needed. Maybe someone knows a way how we can coordinate the timing of it amongst ourselves.




U R rite T.H. timing is the key and another thought is to realise that most if not all of the comments on gtp are about basically destroying or getting even with the directors for what they have scammed,our turn to legally skin or flay them alive is coming,possibly in afew weeks,so let it run it's course and if you like write to the gtp management for ALL the names of the investors in your investment (not the list recently made with fewer names)the original list of YOUR mis investors in the product you signed up to.

I would be waiting to read what you are told:bs:


----------



## Forenth (20 February 2009)

If anyone wants to publicise anything about GSL and Project StealFromYourCustomersEvenIfTheyDon'tAgree then stage a protest outside the AGM, if you can get there. Make a sign and march on the pavement. If there happened to be an unfortunate scuffle of some kind then that might get more media coverage, lol.

But seriously, protest outside and not only ask how customers/investors can have their investment seized against their will and how 50c can be seen as a fair price, but also how the directors only weeks later can be allowing themselves to exchange their financial interests (income) for shares at a real VWAP, no floor price of 50c. Surely this double standard has to raise eyebrows.

There are enough people out there who haven't heard, and enough financial advisors who are willing to cooperate, to enable them to fleece a whole new crop of investors.


----------



## Forenth (20 February 2009)

Oh and remember, as a lot of us have suspected its highly likely someone from GSL is reading this forum.

Smile for us Cameron, Phillip, David, Alice, John, Peter, Mervyn, Neil, Simon or Julian! At least one of you is here...


----------



## bv2726 (20 February 2009)

Forenth said:


> There are enough people out there who haven't heard, and enough financial advisors who are willing to cooperate, to enable them to fleece a whole new crop of investors.




I tend to agree that this is quite plausible.

Here is my situation - if new MIS investors are duped into handing over money this year for trees, especially the feelgood high value timber employing people in the top parts of Australia...then...potentially...my stolen Cattle shares will go up. (As GTP earns some money).

I also have trees with great southern (I was really sucked in)...so I want the company to keep going...and pay me for the trees. When they mature.

So, now, although I hate what has happened...here I am thinking, and in an ironic way hoping, that there is a heap of new investors and great southern are actually successful so I can get some money back.


----------



## ThePav (20 February 2009)

Did anyone read the AGM release? Now wasn't that an inspiring read? Reading between the lines you'd think they're saying we're lost and we don't know what to do.

Should you hold or sell? It's up to you but there are two key events approaching that will largely determine the fate of GTP - The June 30 MIS sales and the loan refinancing in September. If both of these go well then I'd expect the share price to rise. If either goes badly then you probably get about 20c in the dollar after creditors have ravaged the assets. Unfortunately their is still too much uncertainty about the future of this company to attract new investors and hence boost the share price. Personally I think holding a position with Great Southern means that you are  losing out on better opportunities that are elsewhere in the market. But selling at 11c would be painful.

Certainly either way you look at your sure to wish that you had never heard of Great Southern.


----------



## pist'n broke (20 February 2009)

ThePav said:


> Did anyone read the AGM release? Now wasn't that an inspiring read? Reading between the lines you'd think they're saying we're lost and we don't know what to do.
> 
> Certainly either way you look at your sure to wish that you had never heard of Great Southern.




Yes, about 40 000 investors will agree, some might sell just to be done with GTP.
It's unlikely that GTP will get much MIS investment this year. Cattle project sales should help in loan refinancing though.

As I understand it, the new shareholders will have to pay  income tax for their worthless shares (valued at either the VWAP or even the 50 cents floor price) this year, selling or not. At the current share price most will recover less than tax due.

Then again, they could always invest in a new GTP MIS to reduce tax & save GTP from collapse.
These directors are smart devils! Nobody has ever lost money betting on the stupidity of suckers.:bonk:


----------



## Forenth (20 February 2009)

I see all the directors' share issues were passed easily except for Cameron Rhodes, who had someone with 55 million shares vote no instead of yes. I wonder who hates him that much... besides his newly press ganged investors, woops.. I mean shareholders.

He almost missed out...

He also says they acquired $64 million of forestry assets which will yield over $125 million in net harvest proceeds.

If they issued 131369007 shares and they will net $125 million then that's just over $0.92/share. So the 4958 shares they offered for my 2000 woodlots makes each net $4717. That's net proceeds not gross, due in about 2-3 years time. To me net means after costs... ready for distribution, right?

So if my woodlots will net around $4700 then why were they telling me they would only net $2500 when they were wanting me to give them away?

Am I getting something wrong here?


----------



## pist'n broke (20 February 2009)

gorillapolice said:


> Most people forget that it's an 8 year investment, they just see a massive initial paper loss after their investment has been converted to shares and panic - they end up selling them off and jumping ship, essentially aborting what was supposed to be another 5 years of investment period.




I cant follow this argument, gorillapolice.
Accepting this is a long term investment, is it not better to take the paper loss now and invest in something that will maximize your returns for the rest of the period?
If your crystal ball says GTP, stick with it.


----------



## Jackob (20 February 2009)

I reckon the downside risk of share price is much bigger than the other side.

It might becomes a penny-dreadful soon.


----------



## goodie3shoes (20 February 2009)

It is already a 'penny dreadfull' and it will never rise above this level but it can easily fall into the 'receiver appointed'  classification.Just read that garbage yesterday from the 'fool' Chairman and the 'clown' MD.They are basically conceeding 'game over'.They talk about moving away from MIS and the new model but we are not privy to what this might be.Oh, carbon credits? Maybe a vendor of unencumbered land to keep the banks away.How are they going to pay out the TREES investors? These poor losers will be forced to convert into shares(if this Titanic sails that long) and this will create,what,another billion and a half new shares on top of the 650m already issued.Where is the asset backing then? Oh,cost cutting.They can't even afford to retrench staff because they don't have the dough to pay the entitelements.So just how are they going to be able to look after the trees,etc currently under 'skeleton management'?
This mob of 'corporate dullards and thugs' have created a company that has not produced one single successful project.
There has been some questionable private deals,apparently, so as to get the cattle over the line.Let's face it,who in their right mind would vote YES unless you were staff,had a dopey/scumbag advisor or had 'other incentives'. 
This company is rooted.They ain't gonna make it.There is no more MIS for them to get them through.They ,if this story ever hit the media, have destroyed the MIS industry.They have cruelly and cynically destroyed our wealth and all we can do is sit back and watch these WA Merc drivers continue to rip out there million dollar salaries until the inevitable explosion.
Read the ASX release carefully.See if you can see any positives or hope or even see if these dopes have a got any busines plan.This is a very tragic story but will be buried in the current tsunami of other corporate disasters.
But,please don't listen to me. My judegment is hopeless, I tell lies and I get everything wrong and if Freehills or the Corporate Plod want to sue me then you will find me under the railway bridge at Woolloomloo waiting for the Sallies to take me away.


----------



## bv2726 (20 February 2009)

One question I can't make sense of - why did all the directors take salary sacrifice shares payments if they didnt even think that they could ever sell them for more than what they are today?

I mean, in the release yesterday, they were given stacks of shares each. Worth nothing much now, but...if the share price did go to that magical mark of 80 cents or whatever KPMG reckoned...some of those directors would be laughing (if they sold).

Question - Are the directors completely deluding themselves paying themselves with worthless scrip? Or do they genuinely believe that they are going to make lots of money...one day????


----------



## SDE (20 February 2009)

Forenth said:


> So if my woodlots will net around $4700 then why were they telling me they would only net $2500 when they were wanting me to give them away?
> 
> Am I getting something wrong here?





It is quite possible.  

A discounted cash flow analysis was applied to arrive at the PRESENT net value of each of the MIS projects. Remember, those future dollars aren't worth the same as the dollars you have now. 

So yes, your 2000 project are likely to be worth $4700 when it comes to harvest time in 2012 if its present net value in 2008 after the DCF analysis was $2500.

In an accounting sleight of hand, the MIS investors were (mis)led to believe that, in accepting $2500 worth of shares (at a price of $0.50/share) in 2008, they would not be disadvantaged if, in 2012, their shares  were still worth $2500 (assuming $0.50/share). After all, this was the basis of the “no disadvantage” test that KPMG, the independent expert applied. This is clearly nonsense.

Given that GTP share price is trading around $0.11, and heading south with no likelihood of a dividend payment, it is unlikely that those who exchanged MIS plantation projects for GTP shares won’t be disadvantaged.

Oh.................Don't bother going to ASIC. Apparently enforcement of the Corporations Act is a responsibility for the MIS punter.


----------



## Wally1952 (20 February 2009)

Forenth said:


> Oh and remember, as a lot of us have suspected its highly likely someone from GSL is reading this forum.
> 
> Smile for us Cameron, Phillip, David, Alice, John, Peter, Mervyn, Neil, Simon or Julian! At least one of you is here...




.......................................................................................................

Let's not forget Investor1, I'm sure he/she is hiding in there somewhere!!


----------



## ThePav (20 February 2009)

bv2726 said:


> Question - Are the directors completely deluding themselves paying themselves with worthless scrip? Or do they genuinely believe that they are going to make lots of money...one day????




They are the same director's that have been in charge of the company for the last three years. I don't think you should take too much note of what they do as history shows they tend to make pretty poor decisions.


----------



## wooduk (21 February 2009)

Wally1952 said:


> .......................................................................................................
> 
> Let's not forget Investor1, I'm sure he/she is hiding in there somewhere!!




Just shows how paranoid they are,

Spoke to my fin adviser,guess what ?,Iam not on her list from gtp as an investor,and no--- Ihave NOT signed my trees to these clowns,plus the book that stupid twit cole mentioned I assume on the loansthat people had and was flogged to the bank of Adelaide after they snipped the invetors,---wait for it

Question to Mr.Cole

                          If I owe gtp money on the investment and you coveted them and gave me shares,does not that mean that I do not have to pay any monies to whom you flogged the loan book to on the investment that was takenover by? the shareholders of gtp?


Mr. cole please advise what to say to the bank of Adelaide if they want to 
test their  belief that I would have to pay the balance of the loan.

Mr Cole if I had cattle on land that I leased for the droves would not I expect remuneration on the land in someform of private benefit,seeing that I assume the land was not signed over to gtp?

I would be very grateful if you clarify these issues for me on this forum


:behead:


----------



## pist'n broke (21 February 2009)

bv2726 said:


> One question I can't make sense of - why did all the directors take salary sacrifice shares payments if they didnt even think that they could ever sell them for more than what they are today?
> 
> Question - Are the directors completely deluding themselves paying themselves with worthless scrip? Or do they genuinely believe that they are going to make lots of money...one day????




In my understanding, the directors have graciously granted themselves the *option* to salary sacrifice for a maximum amount of shares at their individual discretion and the *actual* share price at the time they *may* take the option.
That just a few weeks after they have scared or forced project investors to accept nearly worthless shares, at an inflated  floor price and a time dictated by GTP. 
Some pigs are a lot more equal.


----------



## wooduk (22 February 2009)

bv2726 said:


> I tend to agree that this is quite plausible.
> 
> Here is my situation - if new MIS investors are duped into handing over money this year for trees, especially the feelgood high value timber employing people in the top parts of Australia...then...potentially...my stolen Cattle shares will go up. (As GTP earns some money).
> 
> ...




The High Court of Australia’s ruling in the Sons of Gwalia case early in 2007, which established conditions where shareholders rank beside unsecured creditors in making claims against an insolvent company, was always an unpopular decision in banking circles. Increasingly we are seeing why.

Last week the litigation funder IMF Australia said that it entered into litigation funding agreements with Centro Properties stapled security holders and Centro Retail stapled security holders. IMF will fund claims that relate to alleged breaches of continuous disclosure obligations by Centro and by Centro Retail. Claims will be in the form of representative actions. 

IMF also announced that it proposed to fund claims by MFS shareholders, alleging breaches of continuous disclosure obligations, and that it proposed to fund claims by Allco Finance Group shareholders, alleging that AFG breached its continuous disclosure obligations. 

A partner at Henry Davis York, Roger Dobson, said the Sons of Gwalia decision would increase the propensity of shareholders to take representative action. 

For other unsecured creditors, including banks and finance companies, that means messier, more drawn-out and more costly company administrations. Bankers fear that it will take longer for them to get their money back and there will be less of it. 

Dobson said: "The High Court created a new class of claimants. Many shareholders will find themselves in a different position in relation to the assets of the company."

In Sons of Gwalia v Margaretic the High Court overturned the convention that shareholders rank behind creditors in an insolvency. The court ruled that a shareholder in a failed company had the same right as an unsecured creditor to pursue a claim against the company in cases where the shareholder had suffered loss as a result of misleading and deceptive conduct by the company. 

Luka Margaretic, an investor, bought shares in the gold miner Sons of Gwalia in August 2004, just 11 days before administrators were appointed to the company. 

In 2005 Margaretic filed a claim in the Federal Court based on the grounds of misleading and deceptive conduct arising from an alleged failure by the company to disclose information to the Australian Securities Exchange. 

The Federal Court ruled for him. The company’s administrator and a creditor appealed the decision. In 2006 the full bench of the Federal Court upheld the original decision. 

The appellants were granted leave to appeal to the High Court. The Court found that Margaretic had a claim that could be proved and then looked at where that claim ranked. 

The decision was based on an interpretation of section 563A of the Corporations Act, which says:

Payment of a debt owed by a company to a person in the person’s capacity as a member (shareholder) of the company, whether by way of dividends, profits or otherwise, is to be postponed until all debts owed to or claims made by persons otherwise than as members of the company have been satisfied.

While Margaretic was a "member" of the company, the Court said the key issue was whether the assumed liability of the company to Margaretic was a liability to him in his capacity as a member. The majority held that it was not. 

Reflecting the majority view, Chief Justice Gleeson said:

What determines the present case is that the claim made by the respondent is not founded upon any rights he obtained or any obligations he incurred by virtue of his membership of the first appellant (Sons of Gwalia). He does not seek to recover any paid-up capital, or to avoid any liability to make a contribution to the company’s capital.

His claim would be no different if he had ceased to be a member at the time it was made, or if his name had never been entered on the register of members. The respondent’s membership of the company was not definitive of the capacity in which he made his claim. The obligations he sought to enforce arose, by virtue of the first appellant’s conduct, under one or more of the statutes mentioned in the earlier description of the respondent’s claim.

The impact of the decision is that section 563A of the Corporations Act no longer embodies a general principle that in an insolvency shareholders come last.:horse:


----------



## Forenth (22 February 2009)

SDE said:


> It is quite possible.
> 
> A discounted cash flow analysis was applied to arrive at the PRESENT net value of each of the MIS projects. Remember, those future dollars aren't worth the same as the dollars you have now.
> 
> ...




If I am going to get 94.5% of $4700 then I will be getting a profit of around 50%. In a couple of years the future dollars aren't going to be worth much less than today's. GSL's pulled an amazing coup with their somehow valid figures... I think KPMG can do my taxes from now on!

As for ASIC, its a bit like Palpatine in Star Wars Episode 1... "I will MAKE it legal".

I wonder what plans GSL are making to grab more than the 5.5% of harvest proceeds they're entitled to. What extra 'costs' are they going to insert to soak up the proceeds. We need to watch out for that.


----------



## SDE (22 February 2009)

Forenth said:


> If I am going to get 94.5% of $4700 then I will be getting a profit of around 50%. In a couple of years the future dollars aren't going to be worth much less than today's. GSL's pulled an amazing coup with their somehow valid figures... I think KPMG can do my taxes from now on!





GSL's figures were never valid. They have somehow managed to issue new capital at $0.50 when their SP is $0.11!

As for KPMG, they would have you believe this is a fair and reasonable deal and "in the best interests of the investors as a whole". Nothing could be further from the truth.

Those who exchanged their MIS interests for shares may find they have to pay tax at the issue price of $0.50, rather than the VWAP. Watch this space.

As it is, those on the top marginal rate will find that they will be further behind when it comes to paying their tax. Even at the VWAP of $0.2845, the tax liability per share is $0.13! That's right, sell your shares at 11 cps and you still have to pay the taxman 2 cps more!


----------



## Jackob (22 February 2009)

Forenth,

GTP might NOT last to 2012 to harvest your crop at all.

Watch out its cattle farm fire-sale! Almost certain the proceeds won't cover what they have paid for them! Don’t know whether can cover the mortgage at all.

Also Watch out its MIS prospectus sale by 30/6 - anything less than last year’s $300m+ won't make GTP get up from its deathbed.


----------



## mikes (22 February 2009)

gtp to show profit with their accounting / legal whizzes

defer revaluing land etc. as of course no reliable steady market and of course gtp is a going concern

whiz bang trick  to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents which is current market price.

expect friendly auditor will give green pen tick.

at least good news , directors should not renig on gtpgb interest payment as and when due.


----------



## gorillapolice (23 February 2009)

SDE said:


> GP
> 
> The initial intention of the investment may have been over 8 years. A lot of MIS investors would have structured their affairs to accomodate this.
> 
> ...




Therein lies the rump, it's really a matter of being stuck between a rock and a hard place - on paper, you've actually lost a considerable amount of the initial investment (the share price today is at $0.10!) and then you've got the tax liability on top of that. GS really have done quite the number on Cattle investors.



pist'n broke said:


> I cant follow this argument, gorillapolice.
> Accepting this is a long term investment, is it not better to take the paper loss now and invest in something that will maximize your returns for the rest of the period?
> If your crystal ball says GTP, stick with it.




I feel like i'm being a little misquoted here. I'm not presenting that as an argument, simply something in addition to consider amid all the panic and fear of what is fast becoming a $0.01 stock. 

I personally believe that given that the same board are in control of the company (even after their 'transformation' - I don't know why it wasn't called 'Project We're Capital Raising but don't want investors to know it'), GS folding is an inevitability more than just possibility or chance.

I've been personally against Project Transformation from the get go (I initially thought it would be hard to come across people who were FOR it - I guess I was wrong with regard to Cattle investors!) and now it's obvious as to why.


----------



## wooduk (23 February 2009)

Has anybody looked at terms of GTPGA and GTPGB?

My read of prospectus in particular Financial Covenant is that holders can redeem GTPGA and GTPGB at full face value if there is a breach of this Financial Covenant. This Financial Covenant is that "the Group's liabilities will not exceed 65% of the Group's assets AND that net assets will not fall below $350 million.". Does anybody know whether the Financial Covenants have now been breached? I personally do not think so as NTA were reported as $627 million for year ending Sep08. However liabilities were $1.083 billion and assets were $1.793 billion resulting in 60% so one of conditions was breached.

If the net assets test is breached one day, holders of GTPGB and GTPGA can seek redemption at full face value. There are $200 million TREES on issue so if holders can seek redemption, company will not be able to pay and hence be insolvent. Do I read this correctly? comments welcome.  

--------------------------------------------------------------------------------
This is not financial advice. Do your own research. 


I found this comment on 3w's.hotcpper.etc


----------



## Jackob (23 February 2009)

mikes said:


> whiz bang trick  to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents which is current market price.




Mikes,

If "whiz bang trick  to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents", then why not let us all push the price to 1c and let GTP show more "extra profit"?  LOL!

By the way, GTP share price drops another 1c to 10c now.  I reckon it will reach 1c pretty soon.


----------



## wooduk (23 February 2009)

pist'n broke said:


> In my understanding, the directors have graciously granted themselves the *option* to salary sacrifice for a maximum amount of shares at their individual discretion and the *actual* share price at the time they *may* take the option.
> That just a few weeks after they have scared or forced project investors to accept nearly worthless shares, at an inflated  floor price and a time dictated by GTP.
> Some pigs are a lot more equal.




Who cares what they issue,my daughter issued me with $50 thousand on my rental property in Mayfair st,London SW01,and I noww have enough money(script) to buy Marleybone Station,Oxford st London SW01 and still be able to pay the $200 to get of jail.

Now it is time for you to roll the dice,you will need a 666 to get going


----------



## wooduk (24 February 2009)

Hi,
If you google
costello 4745 sam paton

You get a pdf of submission in 2006 to treasurer on tree farming and mis's.
Towards the end discusses land values and cost of rehabilitation of land , after tree farming.
Answers a few questions regarding likely value of GTP's assets[assuming no panic selling of land].

gtpga and gtpgb

seen the share prices drop

looks like whispers are out that gtp directors are to default on paying non cumulative interest on gtpga and cumulative interest on gtpgb. 

 I am not the only one that agree's with other forum posts,I urge you forum contributors to read Sam Patton&Associates critical analysis to Peter Costello


----------



## Fatcat (24 February 2009)

0.098 and heading south. 

Does this debacle spell the end for agribusiness investments? Obviously GTP is a shot duck, however what does it mean for their competitors? There must be a huge question market over the industry as a whole. 

Fatcat


----------



## Forenth (24 February 2009)

wooduk said:


> Hi,
> If you google
> costello 4745 sam paton
> 
> ...




It points out quite clearly that its been known since the 1990's that any land with less than 700 mm / year will only yield up to 160m ³/ha, and that a lot of plantations have been established on land unsuitable for blue gums. I guess that explains the poor yields, GSL didn't have anyone who actually knew what they were doing. Unfortunately obvious now...

Maybe Dennis and Co can use that as part of the negligence or lack of care claim?


----------



## Junior (24 February 2009)

Fatcat said:


> 0.098 and heading south.
> 
> Does this debacle spell the end for agribusiness investments? Obviously GTP is a shot duck, however what does it mean for their competitors? There must be a huge question market over the industry as a whole.
> 
> Fatcat




FEAs harvest results last year were higher than originally forecast and growers achieved good returns (can't remember the exact figure but it was >10% p.a.)

Timbercorps' projects are a bit of a mixed bag...some are generating reasonable returns and some aren't great.

Providers like ITC, FEA and TFS should do OK going forward as all of their Projects have a 'single premium' option.  ie. you make one payment at the start and the ongoing costs are deducted from the eventual harvest proceeds...unlike many of the horticultural and cattle projects where you're hit with annual management fees.


----------



## shiraz (26 February 2009)

wooduk said:


> Has anybody looked at terms of GTPGA and GTPGB?
> [snip]
> If the net assets test is breached one day, holders of GTPGB and GTPGA can seek redemption at full face value. There are $200 million TREES on issue so if holders can seek redemption, company will not be able to pay and hence be insolvent. Do I read this correctly? comments welcome.
> [snip]:




The redemption is at face value, though not for cash, but in shares at a discount to the share price at the time of redemption. This means that for every GTPGA (TREES2) with a $100 face value, you get $105.2632 worth of shares, at the VWAP at the time of redemption. So at 10c each, that’s 1052 shares. 

I’m not sure how many GTPGAs are out there, but the prospectus intended to raise $75 million. If these are redeemed either because of the breach of debt covenant or ceasing to pay the coupon (which is highly likely) then GTPGAs alone will increase the shares issued by 750 million. Currently, there are around 350 million on issue. We’re talking serious dilution. 

I’m not sure what the provisions are in regard to TREES and TREES3, but if they have similar provisions, then at the current price, owners of hybrids will end up owning something like 80% of the company.

The question is, to what extent is that expected dilution already priced into the share price?

BTW, I own GTPGAs, hence my knowledge.


----------



## wooduk (26 February 2009)

shiraz said:


> The redemption is at face value, though not for cash, but in shares at a discount to the share price at the time of redemption. This means that for every GTPGA (TREES2) with a $100 face value, you get $105.2632 worth of shares, at the VWAP at the time of redemption. So at 10c each, that’s 1052 shares.
> 
> I’m not sure how many GTPGAs are out there, but the prospectus intended to raise $75 million. If these are redeemed either because of the breach of debt covenant or ceasing to pay the coupon (which is highly likely) then GTPGAs alone will increase the shares issued by 750 million. Currently, there are around 350 million on issue. We’re talking serious dilution.
> 
> ...




Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe


----------



## shiraz (27 February 2009)

wooduk said:


> Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe




The situation with TREES2 (GTPGA) is an all or nothing affair. At the last trade of $16, if they continue to pay the coupon, you keep getting $3.25 every 6 months, fully franked or grossed up. That's a yield north of 50% p.a., grossed up. If they don't, then you either you get your $105 worth of shares at market value (a return of 600% in 2 months), or the company is in liquidation, with hybrid note holders standing only in front of shareholders. So at $16 each, the market is pricing in an 80% chance that the company will fail, and return less than 20c in the dollar of hybrid debt.

I bought in on the Intelligent Investor recommendation at $75, before the world changed. At $16, they're only for the very hairy chested. You're either history or a legend.


----------



## wooduk (27 February 2009)

wooduk said:


> Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe




The High Court of Australia’s ruling in the Sons of Gwalia case early in 2007, which established conditions where shareholders rank beside unsecured creditors in making claims against an insolvent company, was always an unpopular decision in banking circles. Increasingly we are seeing why.

Last week the litigation funder IMF Australia said that it entered into litigation funding agreements with Centro Properties stapled security holders and Centro Retail stapled security holders. IMF will fund claims that relate to alleged breaches of continuous disclosure obligations by Centro and by Centro Retail. Claims will be in the form of representative actions. 

IMF also announced that it proposed to fund claims by MFS shareholders, alleging breaches of continuous disclosure obligations, and that it proposed to fund claims by Allco Finance Group shareholders, alleging that AFG breached its continuous disclosure obligations. 

A partner at Henry Davis York, Roger Dobson, said the Sons of Gwalia decision would increase the propensity of shareholders to take representative action. 

For other unsecured creditors, including banks and finance companies, that means messier, more drawn-out and more costly company administrations. Bankers fear that it will take longer for them to get their money back and there will be less of it. 

Dobson said: "The High Court created a new class of claimants. Many shareholders will find themselves in a different position in relation to the assets of the company."


----------



## SDE (28 February 2009)

shiraz said:


> The situation with TREES2 (GTPGA) is an all or nothing affair. At the last trade of $16, if they continue to pay the coupon, you keep getting $3.25 every 6 months, fully franked or grossed up. That's a yield north of 50% p.a., grossed up. If they don't, then you either you get your $105 worth of shares at market value (a return of 600% in 2 months), or the company is in liquidation, with hybrid note holders standing only in front of shareholders. So at $16 each, the market is pricing in an 80% chance that the company will fail, and return less than 20c in the dollar of hybrid debt.
> 
> I bought in on the Intelligent Investor recommendation at $75, before the world changed. At $16, they're only for the very hairy chested. You're either history or a legend.




Assuming GTP pay the coupons, the Trees2 holders will get to acquire shares at just over 1 cent each if the SP maintains its current level. Woodie, this is your chance to pay the price you believe the company is worth! Or was that 1 cent for the whole company?


----------



## Jackob (2 March 2009)

wooduk said:


> The High Court of Australia’s ruling in the Sons of Gwalia case early in 2007, which established conditions where shareholders rank beside unsecured creditors in making claims against an insolvent company,  ...




Wooduk and Shiraz,

In the case of GTP, how much bank loans are secured and how much are not?  Or they are all secured?


----------



## wooduk (2 March 2009)

Jackob said:


> Wooduk and Shiraz,
> 
> In the case of GTP, how much bank loans are secured and how much are not?  Or they are all secured?




Jake-- I am posting a anothers called SDE from H.cop they are more clued up than I am.Personally I would have thought nothing is secured,everthing is hocked up to its neck,Shraz indicated $200 million on T1 AND T2,to pay that you need a lot of change,or script,yes ?No?at best 2nd guessing.
below is SDE comment


Quote


There is actually considerably more debt than that.

Club Bank Facility $380 million (ANZ, CBA & Mizuho)
Debenture $250 million (ANZ)
(These facilities have all the land as security)

Trees2 $80 million ) Unsecured
Trees3 $120 million ) Unsecured

Total $830 million

105 million of Club Bank plus 80 million of Trees2 needs to be refinanced Sept/Oct 2009.

This year's MIS sales likely to be hit by 3 factors

1. By GS's own admission, MIS investments likely to lose money for investors (see forecasts for 98-03 plantation projects)
2. Severe reputational damage from Project Transform
3. Less need for tax effective investments due to current financial circumstances.

Still has considerable liabilities (maintanence and capital costs) for continuing projects not yet provisioned for.

If only money grew on them trees!

end quote

If others reaading this please bring upto speed ,I am basically a crayon butcher paper level.


----------



## Belrose (3 March 2009)

ASIC has called me back regarding the complaint I made a few weeks/months ago and wants more information to investigate.  Sounds like they are finally considering doing something.

She wants references to prospectuses quoting 250m3 yields and says that there is nothing lodged post 2003?  Is this possible?  I thought someone said something about a 2008 prospectus?  

If people can provide me with links to or copies of erroneous/dodgy information I will pass it on to her.

Thanks very much.


----------



## pist'n broke (3 March 2009)

Belrose said:


> ASIC has called me back regarding the complaint I made a few weeks/months ago and wants more information to investigate.  Sounds like they are finally considering doing something.
> 
> She wants references to prospectuses quoting 250m3 yields and says that there is nothing lodged post 2003?  Is this possible?  I thought someone said something about a 2008 prospectus?
> 
> If people can provide me with links to or copies of erroneous/dodgy information I will pass it on to her.




Hello Belrose, 

2004 PDS on page 22 and 2005/06 PDS page 25, identical:

_GSMAL undertakes rigorous site selection techniques to ensure suitable properties are included in the Project, and all land is physically assessed by a professional forester as being capable ( under normal conditions) of producing at least 250 cubic metres gross of harvestable timber per hectare of Woodlots after 10 years of growth._

2004 PDS, Indep. Forester's Report, page 43:
…_.....we believe it is reasonable to assume an average growth rate of 25 m3 gross per hectare per annum of Woodlots sold. We also believe that there is upside potential, given advances in silvicultural practices and genetics, to achieve growth of up to 30 m3 gross per hectare per annum........_
Much the same on page 47 of the 2005/06 PDS.

You are very welcome to these documents, I have spare copies.


----------



## Forenth (4 March 2009)

Belrose said:


> ASIC has called me back regarding the complaint I made a few weeks/months ago and wants more information to investigate.  Sounds like they are finally considering doing something.
> 
> She wants references to prospectuses quoting 250m3 yields and says that there is nothing lodged post 2003?  Is this possible?  I thought someone said something about a 2008 prospectus?
> 
> ...




Hi Belrose,

You're welcome to my spare copy of the 2000 prospectus quoting 250 m ³ and also has a point in the contract that states each grower invests individually, with no partnership etc created between each growers, GSL, or anyone else. Quite contrary to their "majority vote" scenario. As far as I can work out a majority vote to change the constitution to then allow majority votes is against the contract. Its a contract, can the constitution change that?


----------



## pist'n broke (4 March 2009)

Belrose said:


> ASIC has called me back regarding the complaint I made a few weeks/months ago and wants more information to investigate.  Sounds like they are finally considering doing something.
> 
> She wants references to prospectuses quoting 250m3 yields and says that there is nothing lodged post 2003?  Is this possible?  I thought someone said something about a 2008 prospectus?
> 
> ...




Hi again
Found more old GSL plantation prospectuses.
They all include a table 'ASSUMPTION' in the section PROJECTED RETURNS:

2000/2001      Mean annual increment:     25-30 cubic metres p.a.      Page 29
2001/2002   Mean annual increment:     25-30 cubic metres p.a.      Page 25
2002/2003       Mean annual increment:     25-30 cubic metres p.a.      Page 27
2003         Mean annual increment:     25-30 cubic metres p.a.      Page 29
2004                          Mean annual increment:     25-30 cubic metres p.a.      Page 25
2005/2006   Mean annual increment:     25 cubic metres p.a.            Page 25

Description of mean annual increment: 
The rate at which trees grow, measured in terms of cubic metres per hectare per annum. 

Can't find any newer prospectus.


----------



## wooduk (14 March 2009)

there is belief a significant forestry buyer operating out of the UK in the market for plantations.

It would believe that the best option for investors would be to band together to repel the outrageous 'offer' that GTP are making and instead offer to join with GTP to sell the land and the trees to the investment group as two seperate transactions making up one deal.

GTP will not make this offer to timber investors because they are hoping that the investors are too stupid - after all, who in their right mind would accept the current piece of floss that has been offered (a suprisingly large number of people as it turns out albeit a minority.) GTP are clearly hoping that their investors are mugs.

GTP as a business does not deserve to survive - but the timber investors do not deserve to be fleeced either. An equitable deal would allow an honourable outcome to all. AND, if GTP have actually bought all their land at fair market prices then they can live or die on their merits - not this standover they are dishing up.

In my personal opinion nobody should have accepted this deal if they went into the transactiuon believing the prospectus for each project.

If the performance has not been up to scratch due to actions of the company (or anyone believes they have been misled) then they should join a class action.

There are no shortages of alternative managers for the projects and nobody could argue that there has been anything special about GTP's operational skills after observing the results of the first projects.

Cheers,

 P.s.comes from a very astute investor

--------------------------------------------------------------------------------
Berkshire Hathaway vice-chairman Warren Buffett commenting on poor financial management in companies, "Its only when the tide goes out you find who was swimming in the nude."
"Human beings, who are almost unique in having the ability to learn from the 
experience of others, are also remarkable for their apparent disinclination to do so." 

-- Douglas Adams.


----------



## dmagnus (19 March 2009)

This stock man.... finally got out at 14c to see it fall to 8c and now its on the way back up.... 




I wish IMF would land a killer blow on these guys......


----------



## bv2726 (20 March 2009)

dmagnus said:


> This stock man.... finally got out at 14c to see it fall to 8c and now its on the way back up....




Does anyone have any theories/clues as to why the stock price has gone from 8c to 17c yesterday? (not 8 to 17 in one day, but from a low of 8 to a high of 17 yesterday).

I have shares from my rustled cattle...I was thinking of jumping at 8 cents...now by waiting...its doubled (from 8 cents).

Strange. Something happening that no one has said about?


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## edliw (20 March 2009)

Wooduk

What happened on H/C with Adeena, what part of the truth was defamatory,keep it simple just a general idea.Missed it all.


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## wooduk (21 March 2009)

bv2726 said:


> Does anyone have any theories/clues as to why the stock price has gone from 8c to 17c yesterday? (not 8 to 17 in one day, but from a low of 8 to a high of 17 yesterday).
> 
> I have shares from my rustled cattle...I was thinking of jumping at 8 cents...now by waiting...its doubled (from 8 cents).
> 
> Strange. Something happening that no one has said about?




Ireckon it is an optiontrade or call being hauled in ,you know those parasites that hedge and manipulate the share price,should be made illegal,just like gtp should


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## wooduk (21 March 2009)

edliw said:


> Wooduk
> 
> What happened on H/C with Adeena, what part of the truth was defamatory,keep it simple just a general idea.Missed it all.




Nothing was defamatory,it is the truth,adeena must be some legal wizard ,maybe it is john mond,any way Ithink bluesdog is now frightened for doing it and notice how blusdog has tried to deflect it,not smart

oh well gtp had investor 1,looks like we will see  where adeena lines up,keep your guard up


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## wooduk (21 March 2009)

Hey guys wot is happening on the legal front,

and also Iknow Iam sloppy with numbers but the mean averge cubic metre for  2003 planttions is 250 ,itis stated by the ATO,and who gave that figure to the ATO, why none other great southern


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## wooduk (22 March 2009)

I have found a P.R.2004/5(withdrawn) income tax great souuthern plantations
in particular paragraph 75 on the finance and the full recourse(dfinition below--one of)

After attempting to decipher this doco it seems that great southern can flog off their loan book to jack the ripper if they like,as this P.R.2004/5 had not allowed it to gtp's detriment and it gave full recourse to the person who had the loan taken with gtp only.

stay with me on this.,,,because of this does that mean now ?.


*that the bank of Adelaide and its newly acquired Bendigo bank are now commercial Investment banks?

*from the taxation withdrawl,this only applies as far as my tax obligations to the ATO. and that the above PR 2004/5 is in realtion to tax deductability only?

*Is it fair to assume that the RE at gtp was challenging the ATO on the basis that being a good corporate citizen that it was protecting my commercial interest that I had signed for with great southern finance only and that great southern plantations was challenging the ATO that the expenses were not legitimate deductions.

*As the investor in great southern,and at the time of the withdrawl of P.R.2004/5,does my contract with GTP still legally enforcable as it was stated that a return of 250 cubic metres was STATED on the doco to the ATO.

*Why was the shareholders not given a price sensitive announcement on the ASX as to change of status  and the announcement as to why this was done and the restructuring of the financial dealings with great southern finances.

*Has great southern used my tree's that I own as security un be known to me and if they have do I now have a legal case to instigate legal action to recover monies invested and forward projections of loss of investment.

* I once again note that I did not agree to having another entity finance my loan,it was done with great southern finance only 


These I believe that these questions and other s need to be answered now.

definition of full recourse-----

with full recourse -- a term used in the secondary mortgage loan market. It refers to a written clause in a sales agreement by which a lender sells mortgages to an investor. It means the seller/lender will fully reimburse the buyer/investor for any losses resulting from the purchased loans. This may be accomplished by the seller taking back any loans that become delinquent. 




Copyright  © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.


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## Forenth (8 April 2009)

Has anyone heard anything about what's happening with Dennis & Co or ASIC and the 250 m ³ speculation?

Also, have GSL issued a new prospectus for the current year? If so does it still say the 250 m ³ figure that they have never come close to achieving? Surely by now that can be proven to be grossly misleading if it appears in any new documents.

Watch out for new GSL attempts to seize plantations up to 2003 again and also this year they will include 2004. The ATO won't let them try for anything under 4 years old.


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## dudmis (9 April 2009)

Interestingly GSL 2005 prospectus still quotes 250 cu./metre hectare. What are the implications of this as it is grossly misleading?


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## dudmis (9 April 2009)

pist'n broke said:


> Hi again
> Found more old GSL plantation prospectuses.
> They all include a table 'ASSUMPTION' in the section PROJECTED RETURNS:
> 
> ...




2005 GSL Prospectus page 25 quote "_and all land is physically assessed by a professional forester as being capable of being managed to produce 250 cubic metres gross of harvestable timber per hectare of Woodlots after approximately 10 years of growth."_

Is this far fetched or what???


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## pist'n broke (9 April 2009)

Found this on ABN Newswire


_M&A News

Forestry group Great Southern (ASX:GTP) said one potential buyer is conducting due diligence for a major stake to acquire its cattle assets. AS part of its corporate restructure, the company is selling 27 encumbered properties in southeastern Queensland in a move to raise about A$29 million. Great Southern expects to book a net loss of up to A$130 millio_n _for the first half._


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## dudmis (9 April 2009)

Forenth said:


> Has anyone heard anything about what's happening with Dennis & Co or ASIC and the 250 m ³ speculation?
> 
> Also, have GSL issued a new prospectus for the current year? If so does it still say the 250 m ³ figure that they have never come close to achieving? Surely by now that can be proven to be grossly misleading if it appears in any new documents.
> 
> Watch out for new GSL attempts to seize plantations up to 2003 again and also this year they will include 2004. The ATO won't let them try for anything under 4 years old.




One must assume that it's only a matter of time before other class actions start for the other years, if their claims are proved to be misleading or fraudulent. Their claim about 250 cubic metres per hectare seems to be way out of the ballpark.


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## dudmis (9 April 2009)

Belrose said:


> ASIC has called me back regarding the complaint I made a few weeks/months ago and wants more information to investigate.  Sounds like they are finally considering doing something.
> 
> She wants references to prospectuses quoting 250m3 yields and says that there is nothing lodged post 2003?  Is this possible?  I thought someone said something about a 2008 prospectus?
> 
> ...




Hi there.... I have a 2005 Prospectus and on page 25 it clearly states that the plantation can be managed to achieve 250 cubic metres/hectare.. Do you have the ASIC contact details?


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## wooduk (11 April 2009)

If any MIS tree investors in each of the plantations has the address's as in mail contact of other investors in the projects .It is believed that Dennis & Co.would be interested in contacting these investors even if they are not in the class action,to what ends?,I would only suggest that it would be of benefit for the investors that are in the action and also alert other investors that their investment is under threat and the fact that the investors in the 03/04 for instance can expect a call.


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## dudmis (13 April 2009)

Who and where are Dennis & Co. They're not in the Melb phone book..?
Does anybody have an ASIC contact... or should I send a letter to them re claims made in prospectus that are over the top? Any suggestions appreciated.


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## Wagyu (14 April 2009)

dudmis said:


> Who and where are Dennis & Co. They're not in the Melb phone book..?
> Does anybody have an ASIC contact... or should I send a letter to them re claims made in prospectus that are over the top? Any suggestions appreciated.




dclegal.com.au
based in sydney, 02 8256 0600.
ask for Ed.

can't help with ASIC.

it's a cold winter without firewood,
and it's a long summer with no steaks on the barbie!

don't waste anymore time with GTP


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## Forenth (14 April 2009)

Here's how to lodge a complaint with ASIC (from an earlier post of mine).

Go to www.asic.gov.au and click on 'contact us' for phone numbers etc. If you want to lodge a complaint online:

Go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288


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## Belrose (14 April 2009)

Hi everyone,

Sorry for being incommunicado.  I've been reading the weekly log though. 

I got a response from ASIC, just a form letter saying they investigated and they are not going to do anything further but thanks for the info and ... something along the lines that if more people complain then maybe they'll use all the information to do something???

Anyway ... I'm sure she's absolutely going to love my doing this, but the contacts at ASIC are:

Initial contact:
Sarah Arnold.
Sarah.Arnold@asic.gov.au
Misconduct & Breach Reporting
Stakeholder Services
Australian Securities & Investments Commission

Followed up with:
Belinda Sandonato
03 9280 3460
Belinda.Sandonato@asic.gov.au

Surely the fact that ASIC has no prospectuses lodged post-2003 and some of you guys have been able to reference prospectuses up to 2006 is a problem that should be investigated.

Anyway go for your life folks, BOMBARD them!!


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## wooduk (14 April 2009)

dudmis said:


> Who and where are Dennis & Co. They're not in the Melb phone book..?
> Does anybody have an ASIC contact... or should I send a letter to them re claims made in prospectus that are over the top? Any suggestions appreciated.




Dudmis,Dennis and Co. wre the main dudes behind the litigation on sonns of Gwalia,the same building that GTP occupies is where Sons of Gwalia resided(trivial info),also involved litigation against HIH,and I believe Alco Finance has D&C breathing down their neck.

Call them --ask for Fred GULSON,mr No nonsense.

They are a Sydney Boutique group of gun lawyers,just the type to go spotlight shooting for viral infected vermin in the West of this country


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## Forenth (17 April 2009)

Its good to see that Directors Rhodes and Butlin have just taken up their respective 1.5 million and 1 million share issues at $0.00, subject to performance hurdles of course. 

Just what are these performance hurdles? After all the performance has been:

- a share price that dropped from several dollars to 13 cents over 2 years,
- debt payments only just covered for this year by seizing investor assets,
- an insolvent company earnings sheet,
- unable to pay any shareholder dividends,
- unlikely to fulfill TREES payments,
- cash position forcing selling off assets under value,
- managing investments that have continually failed to come close to forecasts...

The list goes on and on. Maybe the hurdle was managing to turn up to work more than 5 days per year. That seems to be the only thing they've achieved.

After forcing cattle investors to take huge losses in only 1 or 2 years, large tax liabilities and $0.50 shares worth $0.13 and unlikely to improve... surely this is ANOTHER example of snouts in the trough. Where is Investor 1, the forum's GSL management representative? Why isn't he/she here to explain how this was all such a good deal and how GSL management are worth anything at all? They are hopeless agribusiness managers and despite resumes are completely inept financial managers. Other than management performance share issues of course, they're experts at that.


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## Fatcat (17 April 2009)

Forenth said:


> Its good to see that Directors Rhodes and Butlin have just taken up their respective 1.5 million and 1 million share issues at $0.00, subject to performance hurdles of course.
> 
> Just what are these performance hurdles? After all the performance has been:
> 
> ...




Just hold on a minute Forenth, I think you've got it completely wrong! My financial adviser assured me there was upside in giving away my cattle for next to nothing, indicating the share price could again scale the dizzy highs of $2-3. I hope you're not implying I've been led astray, and the GTP management have done me some sort of wrong?!


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## bv2726 (17 April 2009)

Forenth said:


> Its good to see that Directors Rhodes and Butlin have just taken up their respective 1.5 million and 1 million share issues at $0.00, subject to performance hurdles of course.
> 
> Just what are these performance hurdles?




Thanks for pointing this out Forenth. I saw the announcment, but didnt realise $0.00 purchase price (effectively).

Also, no one has said the performance hurdles.

With the announcement by Timbercorp that they are having trouble selling their plantation assets, and the company is staring at the financial abyss, I am really concerned about my GTP shares that I was forced to take for my cattle. 

Anyone else have any opinions on what the significance of the Timbercorp announcment is? (with respect to Great Southern).


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## brty (17 April 2009)

> Anyone else have any opinions on what the significance of the Timbercorp announcment is? (with respect to Great Southern).




The only thing I can think of is a line from 'Lost in Space'......

Robot flailing arms around.... "warning, danger, extreme danger". 

The assets that Timbercorp is trying to flog have all sorts of long term contracts/leases attached to them, so it restricts the market for those assets. In a similar vein the assets that GTP will be trying to flog are not going to be unencumbered. This has to mean a reduction in the price received if buyers can be found at all. Of course all potential buyers know that GTP is a desperate seller (same as TIM) and can afford to play the waiting/squeezing game.

Does it really matter to a buyer if they buy from the company or a liquidator??

brty


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## wooduk (17 April 2009)

Do you see any correlation between GTP and TIM?  
Stock & Land News Skip directly to: Search Box, Section Navigation, Content. 
News   National Rural News  Agribusiness and General  General  Could land become cheap as woodchips?  Could land become cheap as woodchips?
MARIUS CUMING
4/02/2009 5:22:00 PM
Timbercorp is in the process of selling 50,000 hectares planted to blue gums to reduce debt, roughly half its timber estate.
Superannuation funds are amongst the interested parties according to the Managed Investment Scheme (MIS) company.

Timbercorp has stated it will lease the land back but growing woodchips on good farming land was always like “buying a sheep farm to grow dags” according to one agribusiness banker who recently spoke to agricultural economist and valuer Sam Paton.

He says, on a pre-tax basis, it rarely stacks up, and even allowing for 40c in the dollar tax deduction, the break-even threshold for an investor to recover the full commitment of their investment in woodlots, management and lease fees, is high. 

Over the coming years, as the blue gum harvest takes place, uncertainty surrounds the future of close to 500,000 hectares under MIS forestry in southern Australia.

“Neither government nor investor did their sums at the time to ensure that a value adding process was in place (similar to the Pinus radiata industry in Green Triangle and the Upper Murray of New South Wales), and while thousands of hectares of high quality land was being turned over to plant blue gums, despite media speculation about numerous proposed mills in the Green Triangle, 10 years after the launch of the vision statement by Wilson Tuckey, the only value adding option is for woodchips at Portland and Corio,” he said. 

Port of Portland management has confirmed four hardwood chip shipments due to sail to Japan have now been cancelled since November.

Ironically this week the first dedicated ship of hardwood chips left the port.

“I understand that the supply of pulpwood through the pipeline is full relative to demand and like in any tough financial time, companies are running down their inventories. I have a lot of faith that the trees will be harvested and will come through here, the fundamentals are still solid for the blue gums,” the port’s chief executive officer Scott Paterson said.

However forestry experts do not necessarily agree.

Senior lecturer in Forest Science at Melbourne University Rowan Reid said there was always uncertainty surrounding the future a plantation industry driven solely by retail investors.

“I have often said that if poorly designed, wall-to-wall timber plantations can be a form of land degradation. If they fail commercially and provide no other secondary values, such as shelter or land degradation control, then land values can fall. It may cost as much as $1000 per hectare just to get it back to a state that it can be used for agriculture again.”

However, Mr Reid sees some good coming from the shake-up of the industry.

“Investment forestry will probably contract back into selected areas where the rainfall, soils, land values and proximity to markets come together to underpin their real profitability. This will open up market opportunities for farmers in surrounding areas who are willing to integrate timber plantations with their farming systems. The mistake of the last decade is that industry and government put all their hopes on the MIS model alone, rather than looking at what is required to develop a truly sustainable forestry sector that is integrated into the existing agricultural landscape.”

The present price of woodchips at the stump varies from $35 to $40 according to one forestry company who did not want to be named. 

“Based on recent feedback we have received about yields, it is questionable as to what net return these investors will receive even factoring in the tax break, given the crop income is not received for 10 to 12 years.”

Mr Paton said after the blue gum harvest which is set to peak next year, big questions remained.

“Without a second rotation of trees, selling the land back to its previous purpose (grazing) would involve substantial costs to clear the area of stumps, flatten and resow areas to pasture. In the current economic climate I would not be surprised to see those sites not earmarked for a second rotation back on the market in coming years, but western district graziers would only typically purchase such land after it has been rehabilitated back to pasture at substantial cost.” Mr Paton said. 

Great Southern, with 150,000 hectares planted to blue gum is one of the largest Forestry MIS operators and insist their business is sound.

Company spokesman David Ikon said hardwood chip prices had increased with strong demand from Japan.

He said Great Southern would not be selling prime forestry land which he described as the “crown jewels” of the company.
Under the structure of the company, investors own the trees and the company shareholders own the land.

Great Southern does have some “non-core assets” presently for sale, including land in Queensland and cattle properties on King Island, Tasmania.

Timbercorp has stressed its financial health is sound and has support of the banks. 

But if large tracts of land come onto the market at once it could have major impacts on land values in the regions affected across southern Australia according to Mr Paton. 
 Sam Paton, senior valuer and agricultural economist with Sam Paton and Associates says if large tracts of blue gum land come onto the market at once it could have a big effect on land values in the regions concerned.Most Popular
1.  Timbercorp teeters after asset sale 

Copyright  © 2009. Fairfax Media.


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## Fatcat (23 April 2009)

Reading today Timbercorp have sent in the administrators. 
GTP have a similar stench of death about them....


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## brty (23 April 2009)

> GTP have a similar stench of death about them....




I think the market is agreeing with you as the price is down 12.5% today so far.

Reading the blurb that always accompanies Timbercorp's market releases, about what a good sound company it is, is quite funny given todays release about the appointment of administrators.

brty


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## Fatcat (23 April 2009)

brty said:


> I think the market is agreeing with you as the price is down 12.5% today so far.
> 
> Reading the blurb that always accompanies Timbercorp's market releases, about what a good sound company it is, is quite funny given todays release about the appointment of administrators.
> 
> brty




I am staggered GTP are flogging 2009 plantation investments. How could a financial planner with an ounce of credibilitiy seriously recommend it to their client?


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## SDE (23 April 2009)

Fatcat said:


> I am staggered GTP are flogging 2009 plantation investments. How could a financial planner with an ounce of credibilitiy seriously recommend it to their client?




Fnancial planners act in their own interests first and foremost. If their interests, and their clients interests align, then that is a bonus.

The 10-15% commissions offered by Great Southern to financial planners to sell their products make acting in a client's interest a passing consideration.


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## dudmis (23 April 2009)

Does anybody have an opinion on Dennis & Co? I need a top lawyer re the 2005 MIS trees. Is there a chance I can get my money back if it's proven I've been lied to in the prospectus? Has anybody else knowledge of this?


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## Forenth (24 April 2009)

dudmis said:


> Does anybody have an opinion on Dennis & Co? I need a top lawyer re the 2005 MIS trees. Is there a chance I can get my money back if it's proven I've been lied to in the prospectus? Has anybody else knowledge of this?




My guess is that investors are at the end of the creditor list and given GTP's position there are no $ to even pay the top of the list if they go belly up. 

As for proving they lied, they will just point to the forester and claim "he told us so!". Despite being inept accountants they will still point out they're not foresters and they got an 'expert' to justify the claims. No matter that he was paid to agree with their figures.

You'll know when they're about to appoint administrators as the management will resign and take their 12 months payout the day before. There may even be a massive increase in share selloffs which drives the price through the floor, but I dunno if anyone would risk an insider trading charge. Then again, we've seen ASIC will allow anything from this company.

Investors will have to hope GTP or someone else will take the trees through to harvest. Remember, at the time of investment GTP were meant to establish a fund that would pay for the crop through to harvest.  Is that money actually there?


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## bv2726 (24 April 2009)

brty said:


> I think the market is agreeing with you as the price is down 12.5% today so far.




Well, I was part of that sell off. Thanks to everyone for their informative postings here, I sold out all my "cattle rustled" shares that GTP thrust upon me. 

I reckon its better to get the pathetic few thousand dollars that I got rather than nothing.


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## SDE (24 April 2009)

Has anyone considered sueing their financial adviser?

MIS investors would have invested, largely relying on the advice provided by their advisers. 

GTP only accepted MIS investments that came via advisers.

I know my adviser did not disclose his upfront and trailing commissions that totalled 15%.


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## wooduk (24 April 2009)

SDE said:


> Has anyone considered sueing their financial adviser?
> 
> Why bother unless,your adviser scrubbed you,plus a lot of advisers are ripped off in this also.David Monde is a very astute person and has been ripped off.
> Forget the advisers,how about wacking a caveat on the directors of GTP and the company and their private  assets?,I know the outcome ,but how very very embarassing,plus as I understand the growers have legal recourse against GTP, you know where the lender takes back the loan and keeps the assets.
> ...


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## So_Cynical (25 April 2009)

This is fast turning into another ABC learning, Babcock n Brown, Storm Financial, Timbercorp...etc thread.

Financial advisers are there to put money in there own pockets..not yours.

Blind Freddy could see that these schemes are about profiting from investors, not the asset.


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## wooduk (25 April 2009)

So_Cynical said:


> This is fast turning into another ABC learning, Babcock n Brown, Storm Financial, Timbercorp...etc thread.
> 
> Financial advisers are there to put money in there own pockets..not yours.
> 
> Blind Freddy could see that these schemes are about profiting from investors, not the asset.




hind sight is a wonderful thing it would be great if you could elaborate on a scenario as to where the shareholders are left and the hard heads that told GTP and GSM toget stuffed on their ponzy trainwreck deal  



:headshake


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## irenebrisbane (26 April 2009)

Maybe so, but I also wouldn't mind the name of a good solicitor to take my financial adviser to task.


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## oldblue (26 April 2009)

Perhaps you could get Slater and Gordon interested on a "no win, no fee" basis?

Otherwise, I'd be very wary about throwing good money after bad, unless you have a very large amount at stake and very deep pockets.


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## pist'n broke (27 April 2009)

oldblue said:


> Otherwise, I'd be very wary about throwing good money after bad, unless you have a very large amount at stake and very deep pockets.




Exactly my sentiments. I consider my woodlot investments as down the crapper, lesson learnt, get over it, SOB!
I am neither willing nor able to waste more good money, not even Dennis & Co.  Sacking the FA did not cost anything and felt good.
Legal procedures are heavily biased towards the deeper pockets.
No use in throwing the law at the Great Southern Cattle Rustlers. GTP will go t1ts up long before anything is decided.
Don't send in the clowns, this is a job for pest exterminators.


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## irenebrisbane (27 April 2009)

I don't know; is 100k a lot of money to lose?  It gets up my nose that our f/a should get away without a scratch while we are out of pocket to that amount; poof, a puff of smoke; one day in our pocket, next gone.  It doesn't relate solely to GTP


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## drsmith (27 April 2009)

pist'n broke said:


> I consider my woodlot investments as down the crapper, lesson learnt, get over it, SOB!



With Timbercorp in administration it will be interesting to see what their properties are sold for and to what extent those valuations impact on Great Southern's balance sheet.

If Great Southern goes belly up as well at least then they won't be able to chip away at the woodlot investers assets year after year and there's also the prospect the timber will still be worth something.

Now would be a good to review the woodlot PDS's to see what is in there regarding the responsible entity (GTP) going into administration and to consider the alternatives for management/harvest.

GTP going belly up does not necessarily equate to all value being lost for woodlot investors.


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## wooduk (27 April 2009)

drsmith said:


> With Timbercorp in administration it will be interesting to see what their properties are sold for and to what extent those valuations impact on Great Southern's balance sheet.
> 
> GTP going belly up does not necessarily equate to all value being lost for woodlot investors.




Agree Dr.Smith the trees will still be there,the land will still be there,the loans for the tree lots investment will still be there,CPI and inflation will still be there.
The key to all of this is how much  bottle YOU have in determining on holding or accepting a deal?
Remembering this,that you invested for 10 years and in the 11th the trees are harvested
what was your expectation on returns after duration of time,5,10,15,20% per annum?,or double your money on what was invested  originally? 

Obviously a new entity will take us over and most probabaly overseas,as the economic crisis will keep local entrants out as our $A (Sth Pacific Peso)falls and with recession a distant memory by late next year at the most,realistic profitable returns will eventuate.

In the mean time let GTP sink and start a new page at keeping the new entity on their toes

Step 1/ liquidation of GTP

Step2/Gut GTP for what we can get


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## Fatcat (27 April 2009)

Oh how I miss Investor1 and his enjoyable, albeit twisted, takes on what a great job GTP management were doing. If you are out there PLEASE give us an update on how you see recent developments.


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## Julia (27 April 2009)

irenebrisbane said:


> I don't know; is 100k a lot of money to lose?  It gets up my nose that our f/a should get away without a scratch while we are out of pocket to that amount; poof, a puff of smoke; one day in our pocket, next gone.  It doesn't relate solely to GTP



Irene, the reality is that the FA will almost certainly have given you some document which somewhere said that he could not be held responsible for decisions you make.  i.e. he may have advised you that you would make vast amounts and be the most successful investor ever, but there would be a rider declining responsibility on his part.

How you're feeling is very understandable, but unless you have something clear in writing from him guaranteeing an outcome, it's hard to imagine you'd be doing anything other than wasting more money by pursuing it in legal avenues.


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## irenebrisbane (28 April 2009)

Thanks, Julia, you're probably right.  I will go through the paperwork and see if there is anything that might hold him to task, but as you suggest, probably not.  Damnation.


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## wooduk (28 April 2009)

Fatcat said:


> Oh how I miss Investor1 and his enjoyable, albeit twisted, takes on what a great job GTP management were doing. If you are out there PLEASE give us an update on how you see recent developments.






Did not people wake up and realise that what investor 1 was,remember back statements asking investor 1 if at arm length of GTP and GSM,and remember the financial adviser from the that group of advisers that had the mail out paid by GTP.

He would surely be wetting himself,especially including investor1.LOL 

At the end of the day,it seems to me that you are resigned to fate have it's way,


I remember a saying and very true it is quote--


Dare to struggle,dare to win,if you don't fight you lose!


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## SDE (28 April 2009)

Julia said:


> Irene, the reality is that the FA will almost certainly have given you some document which somewhere said that he could not be held responsible for decisions you make.  i.e. he may have advised you that you would make vast amounts and be the most successful investor ever, but there would be a rider declining responsibility on his part.
> 
> How you're feeling is very understandable, but unless you have something clear in writing from him guaranteeing an outcome, it's hard to imagine you'd be doing anything other than wasting more money by pursuing it in legal avenues.




Not entirely correct.

The FA has a duty of care to the client.

That includes adequately researching the products that are recommended to clients.

This research would go beyond looking at the glossy brochure and the 10-15% commission that the FA receives for directing clients to MIS produts that GS sells.

For instance, even the most basis research would have revealed that the  assumption of 250 m3/hectare of woodchips was wrong. The 1994 project, harvested in 2004, achieved only 150 m3/ha. This harvest result was "salted" by GS from its own resources to 250 m3/ha. The most basis of enquiries by the FA would have revealed this.

The advice that FA's provided may well prove to be negligent and therefore actionable. No waiver can excuse negligent action by FA's (Look at the Storm Financial class action)


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## dudmis (28 April 2009)

A couple of phone calls re my MIS investment. Slater & Gordon not interested as "GTP has stench of death about it" (too small for them), but another promising response. If case is won (they're sure it will be) re misleading claims (including claim of 250/ha), it will trigger claims for other years. But as pressure mounts and more MIS investors become aware of situation the heat may trigger an "abandon ship" situation...Can the Directors be liable in this situation? Could their assets be seized? Bottom line.. it looks like my MIS money has gone down the drain with this crowd.


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## SDE (28 April 2009)

irenebrisbane said:


> Thanks, Julia, you're probably right.  I will go through the paperwork and see if there is anything that might hold him to task, but as you suggest, probably not.  Damnation.




Irene

Thought you might find this interesting

Source http://www.tresscox.com.au/resources/resource.asp?id=379

What steps should be taken to avoid misleading and deceptive conduct?

Generally, there are six steps to the financial advice process. These are:

1.    Establishing and defining the advice relationship;
2.    Gathering client data (including goals);
3.    Analysing and evaluating the client’s current financial status;
4.    Developing and presenting recommendations and/or alternatives;
5.    Implementing the recommendations; and
6.    Monitoring the recommendations. 

In addition to these six steps, there are other forms of financial advice engagement. For example, some clients may ask their advisor to provide recommendations, but then go to another financial services provider for implementation of those recommendations. Other clients may ask their advisor for implementation of specific investments or strategies. Another client may ask their advisor to review only one aspect of his or her financial situation, such as estate issues or insurance needs.

Regardless of the type of financial advice engagement that is established, in these difficult times a licensee must now ensure that a representative’s statements of fact or opinion are not motivated by a desire to maintain clients, increase trading volume or cause the value of a particular security to increase. Any failure to do so could result in a claim being made (ie being sued by the client) or trigger ASIC’s interest (misleading or deceptive conduct). 

It is therefore paramount that a licensee has in place the necessary systems and procedures which ensure that any statements of fact or opinion, whether generated internally or externally, can be appropriately qualified according to the strength of the source. 

As part of any internal controls, a licensee should therefore ensure that its programs are regularly reviewed so responsible officers and representatives meet the designated standards of competency and relevant educational qualifications and experience.

As far as external sources are concerned, controlling the release of false and misleading information is a little more difficult. It is well known that some companies can release or present information in an over-optimistic manner, in order to generate interest in the company’s securities in a volatile market. In some instances, this includes unrealistic, unsubstantiated or incorrect data, projections or evaluations.

When this type of ‘hype and dump’ demand is generated by false information, licensees must ensure that before any endorsement is made, it is carefully reviewed and assessed or, if this is not possible, the necessary reasonable qualifications are given. In line with this, there should also be in place a strong emphasis on dispute resolution processes (both internal and external) in order to promote consumer confidence in information from external sources.

http://www.tresscox.com.au/resources/resource.asp?id=379

No doubt your FA followed all the steps in the process and did independent research to confirm some of GS's more outlandish claims (eg 250 m3/ha). Negligence on the part of an FA is not excused by a waiver!

Hope this helps


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## Fatcat (29 April 2009)

Despite being burnt badly by the clowns/thieves at GTP, I'm still keen to look at agribusiness investments with a view to (legally) getting my tax obligation down. TFC look interesting. Anyone have any experience with them? From their website it doesn't appear the pay large Financial Adviser commissions, so my current FA my try to hide this mob from me.
Fatcat


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## toff (1 May 2009)

Hi,

New here, so forgive me if I go a bit off topic...



Fatcat said:


> Despite being burnt badly by the clowns/thieves at GTP, I'm still keen to look at agribusiness investments with a view to (legally) getting my tax obligation down. TFC look interesting. Anyone have any experience with them? From their website it doesn't appear the pay large Financial Adviser commissions, so my current FA my try to hide this mob from me.
> Fatcat




If you want to know about commissions, don't go to the website.  I'd suggest you read the PDS.  TFS pays standard industry commissions of 10%.  There is also the possibility of expense re-imbursements for costs outlayed, such as running seminars, etc.  This must be disclosed by the licencee's representative anyway.  Most advisers will only have a few projects they can recommend, so it is unlikely your adviser is hiding it from you.  The Licencee needs to approve any project before its advisers can recommend it.  It's not cost effective for licencees to recommend more than a handfull of projects.   Consequently, your adviser is probably not licenced to give an opinion on random projects that are not approved, so he/she will simply focus on those products which are approved, and are deemed appropriate for your needs.

Research I have seen gives the TFS project an acceptable rating, but not the best.  The research states that it's perhaps slightly better than a middle of the road project in terms of quality, value and corporate governance.  In my experience, the best projects are run by forestry companies, not by investment companies in Macquarie Street.  I have been a fan of both Gunns and Willmott Forests projects in the past.  Less impressed with the new Willmott Forests project which has been shortened to investors' detriment.


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## wooduk (1 May 2009)

toff said:


> Hi,
> 
> New here, so forgive me if I go a bit off topic...
> 
> ...




Welcome toff,Iam also a keen fan of foerestry projects except for pinus radiata,because chipmunks eat pine cones not koalas.The question I would be interested is there such a company in this bloody country that could grow Aussie native gums that at the very least do minimal damge to the enviroment and can be commercially viable with returns that would take punters away from having shares in cigarette companies,fast food,or fuel polluting companies.? 


Though I know the controversy on gunns,this is a fairdinkum question I stronglybelieve that it is possible,and I am sick and tired of the agri-bussiness being the poor cousin in this country


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## Belrose (4 May 2009)

wooduk said:


> Welcome toff,Iam also a keen fan of foerestry projects except for pinus radiata,because chipmunks eat pine cones not koalas.The question I would be interested is there such a company in this bloody country that could grow Aussie native gums that at the very least do minimal damge to the enviroment and can be commercially viable with returns that would take punters away from having shares in cigarette companies,fast food,or fuel polluting companies.?
> 
> 
> Though I know the controversy on gunns,this is a fairdinkum question I stronglybelieve that it is possible,and I am sick and tired of the agri-bussiness being the poor cousin in this country




Very well said Wooduk, I truly hope that such a company emerges.  Planting native trees on overused farmland sounded like such a great idea ...


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## bv2726 (7 May 2009)

GTP have just announced a trading halt for two days pending a release from the company.

Its either good news or bad. (Very profound statement from me here). 

I wonder if they have sold their cattle assets they stole...


----------



## pist'n broke (7 May 2009)

http://www.borderwatch.com.au/archives/tag/great-southern

For a bit more info. Looks like bad news!

Not enough MIS sales = no working capital


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## SDE (8 May 2009)

pist'n broke said:


> http://www.borderwatch.com.au/archives/tag/great-southern
> 
> For a bit more info. Looks like bad news!
> 
> Not enough MIS sales = no working capital




This Ponzi scheme is finally going to bite the dust. 

Shareholders, Note holders and MIS investors are going down with it. The banks might even take a bit of a hit.

The winners, GS management and financial advisers, will get to walk away scot free, but only if we let them.


Oh, the assets. They're likely to offloaded in a fire sale. Wouldn't it be galling if MacBank ended up with the lot, with current GS management retained on their lucrative salaries to run the show just to rub the salt in!


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## Forenth (8 May 2009)

If its bad news then that's not surprising. Blind Freddy would know not to invest with a company that just finished seizing the investments it was supposed to be managing, and any financial advisor who is still recommending them to clients as a good investment should be charged with fraud.

My understanding from my 2000 prospectus is that the money required to manage the plantation until harvest was to be put into a fund and held for that purpose. After all investors paid the money for that to happen.

Does anyone know if GTP did that and the funds are still there?


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## bv2726 (8 May 2009)

Forenth said:


> If its bad news then that's not surprising.




I will put my cynical hat on. The trading halt lasts for two days, until "normal trading on Monday". 

It is now 2pm on Friday. No news yet. Something tells me that there will be this release later this afternoon - friday afternoon/evening. GTP are hoping that whatever they say will be lost over the weekend.

If it was good news, they would have shouted it from the rooftops. 

I dont know, but it just smells worse and worse as the minutes tick away.


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## Taltan (8 May 2009)

It's been a long long time. I'm afraid it does look like someone is waiting for Australia's business news writers to head to the pub.


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## wooduk (8 May 2009)

bv2726 said:


> II dont know, but it just smells worse and worse as the minutes tick away.




Time to serve the injuctions on the company first thing and freeze the asset sales ,plus serve caveats on the directors


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## dudmis (9 May 2009)

Does anybody know if there are moves afoot for class actions for 2004, 2005 & 2006 years?? Apparently the prospectus was still quoting 250 m/ha. in those years too. Can somebody fill in the blanks?


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## dudmis (9 May 2009)

In a few of the previous posts on this crowd a Ponzi scheme is mentioned. I have never invested in one. What is a Ponzi scheme?


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## Julia (9 May 2009)

dudmis said:


> In a few of the previous posts on this crowd a Ponzi scheme is mentioned. I have never invested in one. What is a Ponzi scheme?



Glad to know you have never invested in one, dudmis.   The problem is that they don't actually advertise themselves as such.  You will never see an advt suggesting "Come and Invest in this fantastic Ponzi Scheme".

The recent Madoff affair was a good example of a ponzi scheme.  Google it if you're not familiar with what happened.


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## So_Cynical (9 May 2009)

dudmis said:


> In a few of the previous posts on this crowd a Ponzi scheme is mentioned. I have never invested in one. What is a Ponzi scheme?




http://en.wikipedia.org/wiki/Ponzi_scheme

_quote wiki
A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their 
own money or money paid by subsequent investors rather than from any actual profit earned._

Its funny cos when u think about it there's a little bit of Ponzi in everything....i was reading 
about these schemes (forestry, farming etc) accountants and financial advisers were payed 
a 10% commission, so were happy to flog these crap investments to there clients wanting 
tax breaks.


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## wooduk (10 May 2009)

Julia said:


> Glad to know you have never invested in one, dudmis.   The problem is that they don't actually advertise themselves as such.  You will never see an advt suggesting "Come and Invest in this fantastic Ponzi Scheme".
> 
> The recent Madoff affair was a good example of a ponzi scheme.  Google it if you're not familiar with what happened.




Dudmis you can flip back to the previous threads AAALLLLL the way back to a David Mond --google David Mond on Aussie stock forum,if he can get dudded by GTP the rest of us are like sitting ducks on the pond and the last sound you hear is the click on the trigger,LOL


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## dudmis (10 May 2009)

On my 2005 prospectus  it clearly states that the yield on the trees will be 250 m/ha, yet I've just found an interesting article http://www.abc.net.au/4corners/content/2007/s1889993.htm
Whereby the CEO of Great Southern stated "I think I’ve seen some statistics that sort of suggest that the industry overall are averaging around 160 to180 cubic metres per hectare over 10 years".
My question is "How could that be correct?" How can statistics sort of suggest?
It seems very clear to me that the industry average IS about 170 cubic metres per hectare. That seems to be the clear concensus of fact and opinion.
If he knows and admits this, howcome a prospectus is still stating 250 Cubic metres/hectare? Is there a Gov't Dept that vets these schemes to protect investors?


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## So_Cynical (10 May 2009)

dudmis said:


> howcome a prospectus is still stating 250 Cubic metres/hectare? Is there a Gov't Dept that vets these schemes to protect investors?




Read the small print...all numbers, projections, expectations etc are non binding and subject 
to all sorts of factors...even the expert opinions are subject to disclaimers.

The people promoting theses type of schemes can pretty much say anything they like...and 
there is no dept of any sort to pull them up on any of there claims....when u buy into schemes 
like these your on your own...and if u don't have a full understanding of what there doing, then 
why are u giving them your money?

A prospectus is a license to print money.


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## pist'n broke (11 May 2009)

Well, they know how to keep up interest!

http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&allinfo=&asxCode=GTP#price


Suspension from Official Quotation


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## Taltan (11 May 2009)

mmm...bad news but not the end

http://www.abc.net.au/news/stories/2009/05/11/2566619.htm?section=business


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## brty (12 May 2009)

This story is pulling no punches....

http://business.theage.com.au/busin...t-scam-comes-crashing-down-20090512-b14t.html

It includes.....



> "scam"






> it's the biggest single scam in Australian financial history






> rip-off commissions and promoters' profits






> after overpricing their questionable products and ripping off customers






> Great Southern's first rotation infamously proved to be such a poor deal that the company kicked in cash to dress up what the wood was actually worth. Hey, there were other investors out there to be harvested






> Corporations with highly questionable business models have this habit of eventually failing. At some point the greed gets to them.




Michael Pascoe and The Age are obviously not worried about being sued by either GTP or TIM, though he was a bit gentler on KPMG, they can still afford lawyers.

brty


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## basilio (12 May 2009)

Isn't it really interesting.....

Michael Pascoe in The Age comes out with all guns blazing on the "scam" that was being run by Great Southern and others. In fact he could go through all the prior prospectuses and point out the huge commissions, BS projections and so on.

*So why wasn't this done earlier? * Why didn't Michael Pascoe  make his blunt assessments when it may have counted for more? Why didn't ASIC have a look at the projects over the years? Why does it take the inevitable crash to allow journalists to state the bleeding obvious?

It is  a rhetorical question but perhaps now is a good time to  ask what role should the media and regulatory agencies play in jumping on questionable and often totally dishonest businesses. The current theory seems to be that you can throw up practically any money making story and if it is successful in conning enough peope, *it's success saves it from robust scrutiny*.

* In effect the marketplace is rewarding the the best  and greediest sociopaths.*

The consequence  is that many, many of the "investments' the community has sunk its life savings into are now seen as either totally scams or  really close to it. Examples ?  Obviously Madoff, Storm International, B&B, Alco, practically all the rural investment  companies that are dominated by tax breaks. And I have probably missed a few.

Not to mention the daddy of them all. The mad push in real estate to get people to pay more and more for housing as either trophy homes or  negatively geared investments.  Somewhere along the line we forget that essentially a house is just a place we need to live in.

The final  consequence seems to be what we are currently facing - a collapse in our economies as the full extent of this charade  becomes apparent.


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## So_Cynical (12 May 2009)

basilio said:


> Why didn't ASIC have a look at the projects over the years?




ASIC has nothin to do with it...there a rule enforcement agency, and these rural 
schemes, with legal prospectuses that cost millions of dollars to produce are all 
quite legal, and a vital part of the Australian financial industry.

A legal entity can claim pretty much anything they like in a prospectus...get a 
couple of experts and a pricey accounting firm to sign off on it and away u go.


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## Johnathon123 (13 May 2009)

I have just stumbled over this forum - very interesting

It would seem the vultures are circling. I invested in the IMS Scheme really difficult to understand what is going on 

It would seem that Great Southern Financial has sold its loan book to Adelaide and Bendigo Bank. They want me to refinance giving me a reduced interest rate - great but - You have to give them your house as security - They are kidding arent they

Anyone else in the same boat.!!!!


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## dudmis (13 May 2009)

Jonathon 123...

It's about time to get a good lawyer on the case! Have a look in the forums and see if there's somebody already acting against GTP... No point re-inventing the wheel.


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## Fatcat (13 May 2009)

Johnathon123 said:


> I have just stumbled over this forum - very interesting
> 
> It would seem the vultures are circling. I invested in the IMS Scheme really difficult to understand what is going on
> 
> ...




Thats interesting Jonathon. Who contacted you? Was it the thieves at GS, or the banks directly? What GS scheme/smam were you "invested" in?


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## mikes (13 May 2009)

my thoughts are that adel bank paid gtp 38 cents in the dollar for the debt

why dont you offer adel bank to pay off the balance at  a final payment of38cents in the dollar  which gtp and adel bank presumably thought was fair value.

if they dont accept, there is something shonky going on somewhere.


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## mikes (13 May 2009)

pascoe is completely wrong in directors were over-pricing of mis tree etc. investments

if overpriced should be something left for gtp share and debt holders.

that is unless (surely not ) there is a scam of the directors and executives in accessing the wealth of debt holders (gtpgb and gtpga) in addition to the wealth of the  mis tax punters  and all the other australian taxpayers.

and the shareholders in gtp voted for these directors to look after their hard-earned investment interests.

where was the auditor.

what is probability of issuance (when due) of  true and fair accounts ( with auditors stamp) for the 6 month period ended 31/3/2009, which is due very shortly under asx listing rules.   ditto for tim (6 months end 31/3/2009).

i have not yet seen any announcement of the gtp directors requesting suspension of gtp by the asx for the reason that the directors expect or have been told that the auditor will not sign off on 6 month accounts as presented by the gtp directors.

was the reason given by the gtp directors to the asx for the gtp suspension request the whole truth and nothing but the truth..

i could be wrong, the gtp directors (and their advisors) may possibly just be simply  unqualified to be directors and are just incompetent.

holding  gtpga , gtpgb  - no other interest


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## doctorj (13 May 2009)

mikes said:


> pascoe is completely wrong in directors were over-pricing of mis tree etc. investments
> 
> if overpriced should be something left for gtp share and debt holders.
> 
> ...



Some comments
1) I don't think you can make a strong argument that directors weren't qualified.  I've met most of them on several occasions and they seem as competent as any directors i've met (and certainly considerably more so than a fair portion I've had the occasion to meet lately).

2) I don't think it was a scam (in a fraud sense), but rather a flawed business model that was exposed by a combination of falling land prices and reduced tree yield.  The first and foremost thing to realise about Great Southern is they are actually a rural property company that had the goal of using cash flows from schemes to fund land purchases.  Eventually the land bank would be sufficient to allow rotations of land to meet demand for the new schemes and then ultimately all the land would be debt free.  When land prices started falling (reducing their ability to monetise the portfolio and increasing the strain on solvency) and demand for new schemes did not continue to grow (meaning they didn’t have the liquidity to cover it all over) the problems came to the fore.

3) It's not uncommon at all to have companies release reports at COB on ASX deadline day.  ASX will suspend them automatically if the deadline isn't met if its not lodged by start of trading the following business day.

4) As for the auditors - they provided a qualified opinion when it became clear that their ability to continue as a going concern for the next 12 months was in doubt. Before then - auditors are not fortune tellers (any more than you are by the looks of it given your exposure) and only assess if the company is a going concern and if the accounts are materially correct.

Obviously your angry and stand to lose a chunk of money, but I  think the issue is with the business model rather than anything untoward.


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## mikes (14 May 2009)

appreciate the comments.

paid est 15 cents in the dollar for gtpgb and may not lose on investment cost, unless account figures for assets as at 30 sept 2008 have the outcome of a shortfall of in excess of est. $500 million from the directors view of 30 sept 2008 values when assets realised. - that was my portfolio punt, i blame myself if lose. My fault that i left it too late (by about 2 weeks) to find out about and do something about hedgeing the gtpgb investment by short selling cfd in gtp. 

investors in gtp mis have not lost significantly more than would have lost in other public share investments on asx (est. 40%) or they could have invested in gpt, bnb, mfs, allco ( after allowing for the tax deduction they have received). Unfortunate for them if they borrowed most of funds and have outstanding debt, but that is  a matter for mis investors and their advisors - i expect that gtp offered to lend - gtp never forced any investor to borrow.

re the comments  on yields (tonnages) , expect that this will not make a really significant difference to the final return ( and in agriculture  25% in yield variations/disappointments is not unusual at all and gtp could yet still defer the harvest or make a voluntary offer of extra timber from other sources as it has previously i believe and it would be in gtp's interests to do so,  if it expected to sell future mis).  This timber would be from gtp sources, not a ponzi scheme of "borrowed" undisclosed timber from other mis investors trees. Expect the returns are more sensitive to the prices received for the timber - i dont believe that any warranties were given by gtp on prices.

my thoughts are that the mis cattle investors who were compulsorily acquired for scrip ( not the mis acceptors (tree and cattle) of project transform who accepted willingly or advisedly after consulting their financial advisors) really copped it unfairly in the neck. Some still seem to have expected 100% of cost rather than 50% of cost which most other asx investors are presently experiencing from other investments.

given the uncertainties, 30 sept 2008 valuation procedures and assumptions used by the directors were aggressive and inappropriate given the auditors view as at that time. - ( an offence requiring sacking by shareholder vote  or resignation - not hanging)

however full retribution should be expected if directors permitted costly related party transactions and nest feathering of directors, executives and associates  which have cost shareholders and debt holders, particularly if after such time that it was obvious that asset values in accounts disclosed as at 30 sept 2008, were significantly different from reality and the business model was broken, or the directors have kept gtp going when it was obvious that all the equity had vanished and the directors themselves were in effect punting with debt funds (gtpga,gtpgb). 

The directors dawdled in selling (non loan receivable) assets, or making any scrip issues.

The selling of loans receivable at 38 cents in the dollar by the directors was outrageous.

Investors in gtp after 30 sept 2008 accounts and audit report was released, when they looked at gtpga and gtpgb prices on asx, should have realised that they were in effect buying options in gtp , not shares.

hold gtpga,gtpgb


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## Johnathon123 (14 May 2009)

Fatcat said:


> Thats interesting Jonathon. Who contacted you? Was it the thieves at GS, or the banks directly? What GS scheme/smam were you "invested" in?




Initially GSP then Adelaide

Have spoken with the lawyers and they are looking at class actions (hinted at on GSP website)

Should be a fun ride


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## wooduk (14 May 2009)

doctorj said:


> Some comments
> 1) I don't think you can make a strong argument that directors weren't qualified.  I've met most of them on several occasions and they seem as competent as any directors i've met (and certainly considerably more so than a fair portion I've had the occasion to meet lately).
> ======-----------000000000
> 
> ...


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## jiml (15 May 2009)

DoctorJ is partially right, however, as all MIS schemes are not market based and are skewed by a subsidy, in this case tax minimisation, and therefore not constrained by normal market forces GTP  (and other MIS operators) bought land which without the subsidy and arguably even with the subsidy, was unsuited to bluegums in terms of soil type, rainfall and location (ie, distance from a mill). While GTP is not technically a Ponzi scheme, it did rely upon the influx of capital for new projects to to sustain the business model, at least until well into the second rotation. Further, when GTP extended its operations into horticulture and cattle it was almost a garuantee the govt (or any govt worth its salt for that matter), would implement measures to lessen the tax loss (I understand it is currently running at about $700m per annum). Think, you could have invested in hydrophonic strawberries in Qld.


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## doctorj (15 May 2009)

jiml said:


> While GTP is not technically a Ponzi scheme, it did rely upon the influx of capital for new projects to to sustain the business model, at least until well into the second rotation.



I wasn't going to say it, but that's pretty much my thinking too and has been for quite some time.

As for your comments concerning the suitability of land, I'm not a botanist (or whatever it is that knows about trees), but I'd say the method of forecasting probably wasn't very sophisticated.  Sure they could estimate mean rainfall for an area over the life of a tree and they knew that land in certain areas was generally decent for growing trees, but I doubt they had a sufficient data to model how that would translate into tree growth.

But really, that's an issue for scheme investors.  For holders of debt / equity, the issue was a flawed business model and in an environment of higher risk premiums and falling land prices, I don't see how that's going to change.


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## bv2726 (15 May 2009)

The voluntary suspension is expected to end before trading opens on Monday (18th). The request said that the company expects to "make an announcment before the suspension is lifted".

Today is Friday...15th....

That implies today there should be some sort of announcment.  

Waiting...waiting....


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## wooduk (15 May 2009)

doctorj said:


> I wasn't going to say it, but that's pretty much my thinking too and has been for quite some time.
> 
> As for your comments concerning the suitability of land, I'm not a botanist (or whatever it is that knows about trees), but I'd say the method of forecasting probably wasn't very sophisticated.  Sure they could estimate mean rainfall for an area over the life of a tree and they knew that land in certain areas was generally decent for growing trees, but I doubt they had a sufficient data to model how that would translate into tree growth.
> 
> But really, that's an issue for scheme investors.  For holders of debt / equity, the issue was a flawed business model and in an environment of higher risk premiums and falling land prices, I don't see how that's going to change.



After the debacle on previous tree investments and the intervention of govt. legislation prior to the previous govt cleaning or supposedly cleaning the industry up,it is obvious that it was not done let alone policed by the ATO.

As an investor you can only work on the due diligence of the information that is stated and remember the scathing report that Paton and Associates that was posted on ASF in relation to a34 page report to the then Treasurer Peter Costello and this happened AFTER I had invested in several of GTP's MIS investments.

Excuses of GFC and the taxation case that GTP won by the way,are NO excuses for the way this group went about its bussiness especially in project TRansformation

To make allowances for Aus stock and KMPG to state what they had said and the fact that one of the independent auditors blew GTP out of the water,about their returns and valuations was the crystalisation of the beginning of the end and the continual porky pies emanating from GTP,GSM

For any person to infer that investors were dullards in this scheme then that means that big bussiness CEO's,advisers,lawyers,doctors and non pro's like me can where GTP's demise.

The incentive fromGTP

Tax effective,--250m3 return on lots for woodchips

re-invest in coppings

later carbon credits,until penny wong another political dullard stopped it

A big market that can not get enough dunny paper

value adding with Lignor

Bio fuels 

And you know what it is there,you bloody idiots at GTP and GSM had it and now you twits are going to lose it 

Mis growers hold the ground tell the liquidator to piss off and need be make unhoy alliances to keep the vultures from your trees

WHY?---these are good investments and at the end of 11or  even 12 years I will be happy


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## SDE (15 May 2009)

Wrong on several counts Doctor J

1 The principal assets of the company, the land holding, are valued, and carried in the books, on an UNEMCUMBERED basis. There are long term leases registered against most of the land which significantly lower its current  sale value. This is an example of Enronomics (I am sure you would agree that Enron was a significant scam)

2 By GTP’s own admission, the continuing maintenance, and ultimate return from existing MIS projects require ongoing sales of new MIS projects. That is, older investors need newer investors to invest to get a return. This is what defines a Ponzi scheme. I am sure, Doc J, you would agree that Ponzi scheme investments are a scam.

3. Project Transform was a scam on several levels:

i MIS investors received unanimous recommendations from company directors to exchange their project interests for GTP scrip at a 400% premium. How this was in the interests of MIS investors is beyond belief. A majority of MIS investors rejected the offer.

ii  A shortfall was engineered in the cattle projects by with-holding 60% of available cattle from sale. The threat of a shortfall drove many cattle project MIS investors to accept the scrip deal. The cattle are now 100% GTP owned and the MIS investors have received essentially worthless shares.

iii  The “independent expert’s reports” were basically flawed in terms of ASIC’s Regulatory Guide 111 in that they were NEVER fair. A fair offer requires that MIS investors swap assets for shares at identical value. A swap at a 400% premium is intrinsically UNFAIR.

4 The directors may be well qualified, but they are certainly not appropriately qualified to run this sort of company. They are, in effect, accountants and financiers trying to run an agricultural company. It has been their own conduct (similarly at TIM) in paying substantially over the odds for land that has driven land prices up. Now that they don’t have any money, land prices will return to reality. 

If GTP directors are “as competent as any directors i've met (and certainly considerably more so than a fair portion I've had the occasion to meet lately)”, it would appear that you are either mixing with the wrong crowd, or Corporate Australia is in very serious trouble.


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## Forenth (15 May 2009)

SDE said:


> 2 By GTP’s own admission, the continuing maintenance, and ultimate return from existing MIS projects require ongoing sales of new MIS projects. That is, older investors need newer investors to invest to get a return. This is what defines a Ponzi scheme. I am sure, Doc J, you would agree that Ponzi scheme investments are a scam.




Wait on, I'm pretty sure my prospectus says that the money required to manage the plantation until harvest was from monies already paid by investors and was to be put into a fund and held for that purpose.

Are you saying that didn't happen and that money isn't there? If so then does anyone know where it went?


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## Jackob (15 May 2009)

Forenth said:


> Wait on, I'm pretty sure my prospectus says that the money required to manage the plantation until harvest was from monies already paid by investors and was to be put into a fund and held for that purpose.
> 
> Are you saying that didn't happen and that money isn't there? If so then does anyone know where it went?




I am quite sure they've never put your money into a separate fund.

What they might do at best was to delay part of your application fee to the 2nd or 3rd year as a "deferred income" in their income account, while spent the cash whenever they got it.

So it is a Ponzi scheme - whenever stops selling the "products" (prospectuses) it collapses.

In fact I reckon all the MIS projects are Ponzi-like schemes and they will all die soon.


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## SDE (15 May 2009)

Forenth said:


> Wait on, I'm pretty sure my prospectus says that the money required to manage the plantation until harvest was from monies already paid by investors and was to be put into a fund and held for that purpose.
> 
> Are you saying that didn't happen and that money isn't there? If so then does anyone know where it went?




Yes, unfortunately, Forenth, its all gone.

Where to: Your FA pocketed a 10% commission, the greedy GTP execs who trousered over 1 million a year, to the bloated GTP staff structure, to the owners of the land who were paid well over the odds for their land, to the lawyers, the merchant bankers, the accountants, the experts.................


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## wooduk (17 May 2009)

IT IS UNOFFICIAL,,, NOT CONFIRMED 

But as of 10 pm Saturday 16/05/09 approxiamately GTP went into voluntary receivership.

But I stress it is un-official.


Some of the contributors here will be better informed than I am.
Please confirm if this is so ASAP

I need to be able to tell Bendigo Adelaide to jam their loans not even worth this now if it factual


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## gorillapolice (17 May 2009)

Have heard the same thing.

This ought to teach a big lesson to those fools who voted 'Yes' to sell their Cattle for worthless shares, and to those who accepted Individual Offers to switch their investments for shares in the company.


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## wooduk (18 May 2009)

And now the hyenas approach---read on it starts just like timbercorp,they made a mistake in the company name it was timbercorp,gunn's wilmont,the department of sustainability,anything, but not my precious GTP

Great Southern another to take MIS hit Barry Fitzgerald
May 17, 2009 
THE collapse of investor interest in managed investment schemes has claimed its biggest victim, the debt-ridden timber plantation group Great Southern.

Ferrier Hodgson has been appointed voluntary administrator of the failed agribusiness specialist, which manages 45 schemes on behalf of 43,000 investors from which it has raised $1.8 billion in the last five years.

Great Southern shares were suspended from trade on May 11. It had a last sale price of 12 ¢ a share ”” a fraction of the $5-a-share the stock commanded in March 2005. It holds interest-bearing debt of $785 million, of which $105 million had to refinanced by October.

Apart from the collapse of investor interest in MIS in the wake of the global financial crisis and high debt levels, Great Southern has been hit by drought and uncertainty about tax changes related to the sector.

It was the same combination of factors that recently brought down fellow agribusiness Timbercorp, which recently went into voluntary administration with liabilities to secured lenders of $661 million.

Ferrier Hodgson partner Martin Jones said last night his first job at Great Southern would be to review the group's financial position and communicate with key stakeholders.

"Great Southern has a complex structure with numerous managed investment schemes and significant agricultural assets," Mr Jones said.

The company has been scrambling to keep its lenders at bay by raising funds from asset sales. It was reported last week that it was poised to sell dozens of tree farms at Casino in NSW and Miriam Vale near Gladstone in Queensland.

The sale was expected to raise $50 million. Great Southern has also put cattle and pastoral property on the market.

Along with the sale of additional forestry assets, it was hoped they could generate a further $300 million.

But the fear is that, like Timbercorp before it, Great Southern has had trouble securing deals at prices anywhere near the asking price, even in a fire sale environment.

Source: The Age


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## bv2726 (18 May 2009)

gorillapolice said:


> Have heard the same thing.
> 
> This ought to teach a big lesson to those fools who voted 'Yes' to sell their Cattle for worthless shares, and to those who accepted Individual Offers to switch their investments for shares in the company.




Yes, all the ones that voted yes and forced people like me to have their cattle stolen and given shares (despite me voting no).

I am happy I sold two weeks ago...after reading numerous posts on this thread about how much debt GTP had...there was no way they could pay it back.


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## jonnycage (18 May 2009)

sad to see another company go down,  yet so glad about a year ago
i got out of these guys, something just didnt smell right ....

jc


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## Forenth (18 May 2009)

I wonder if any directors / management sold any shares in the last few weeks. Rhodes etc took their 'performance rights' share options not long ago, 2 ½ million shares for $0.00. Do they still hold them now when they're becoming absolutely worthless? Based on 'performance' they should be made to pay into the company... negative growth should mean negative 'performance rights'.

If GTP are going under then have they left just enough cash in the kitty to pay themselves out? Their contracts say they're entitled to 12 months pay if they leave the company.

Also, now is the time for investors who haven't yet been fleeced of their investments to look for a new RE and to resist all attempts to extinguish the leases so the land can be dumped. Anyone out there with some industry exposure? Maybe for projects close to harvest a new RE steps into GTP's role and gets their return without the years of waiting, Gunn's or someone. As for more recent projects a RE would be taking on a longer term commitment.

Suggestions?


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## Jonnyjunkfood (18 May 2009)

I think common sense finally prevails.  MIS schemes have been locking up prime agricultural land with forrestry products (an industry which is already struggling with low prices) at the expense of food production.  These guys were ruining rural australia.  Now we can return to genuine agribusiness.


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## pist'n broke (18 May 2009)

gorillapolice said:


> This ought to teach a big lesson to those fools who voted 'Yes' to sell their Cattle for worthless shares, and to those who accepted Individual Offers to switch their investments for shares in the company.





KPMG considered this a 'fair and reasonable' deal!
Who were the real fools? The largely financially naive investors (like me) or the well paid financial advisers and 'independent' experts?
No points for guessing who's going to be screwed.:swear:


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## moreld (18 May 2009)

Nothing new to add just providing a link to a few of my thoughts.
Great Southern calls in administrators
As a GTPGA and GTPGB holder I will be attending the first creditors meeting. 

_Finally! I've been saying for a while that GTP is a POS going to zero. For years I've been warning friends not to invest in MIS and yet I stupidly invested in GTP's debt, GTPGA and GTPGB (TREES2 and TREES3). Stupid, stupid, stupid. I knew it was a bad business, arguably a complete scam and certainly it had all the hallmarks of a Ponzi scheme and yet I thought I'd get my money back. What an idiot. Lesson learnt, **** stinks and sticks to everything you can't step in it and end up smelling like roses. _


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## Belrose (18 May 2009)

Jonnyjunkfood said:


> I think common sense finally prevails.  MIS schemes have been locking up prime agricultural land with forrestry products (an industry which is already struggling with low prices) at the expense of food production.  These guys were ruining rural australia.  Now we can return to genuine agribusiness.




I agree that GTP overpaying for agricultural land didn't do the small communities where it was held much good, but I do think that planting trees and rehabilitating exhausted farm land was a much better solution than pouring more and more petrochemical fertilisers on it to try and make it go just one more harvest.  I think "ruining rural australia" might be overstating the facts just a tiny bit.  Rehabilitating the earth and ensuring that there is one to support all these people to grow food for is surely of some importance?

Honestly, very few people in Australia are starving - in fact 68% of adult men and 55% of adult women are overweight or obese according to the National Health Survey of 2007-08.  I am sure that the numbers are even worse currently as this has been an escalating trend for quite some time.

I'll just sit back now and wait for all the antagonists to this view to flame me.  Sigh.

Well that's my 2 cents worth anyway.


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## The_Bman (18 May 2009)

Look on the bright side, at least the plot owners will have a few hundred thousand carbon credits!

I am a plot owner


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## Johnathon123 (18 May 2009)

Like I said before it's going to be one hell of a ride

With 20/20 hindsight you have to wonder why anyone would invest in this - it is amazing when you look at the numbers just how many people did (including me) 

Do you think as investors we have any chance to recoup the investment 

Even  is better than nothing


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## The_Bman (18 May 2009)

It was a win win for me at the time. I could defer my tax and instead of the taxman taking my money I could replace my car.

Now we'll need some tax advice, not sure if this could be classed as a capital loss.


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## mikes (18 May 2009)

if the insurance premiums are paid up, a bush fire might save tree investors

still hoping that (my debt investments) gtpga and gtpgb might get a couple of cents in the dollar.


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## Fatcat (18 May 2009)

Anyone heard from their financial adviser in recent days? Mine hasn't responded to email queries. Suspect he is sunning in the Carribean on the back of the fat commissions.   
Still umming and arring whether to sack the little grub.


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## bv2726 (18 May 2009)

Fatcat said:


> Anyone heard from their financial adviser in recent days? Mine hasn't responded to email queries. Suspect he is sunning in the Carribean on the back of the fat commissions.
> Still umming and arring whether to sack the little grub.




After what I have been advised to do by my financial advisor(s) over the years...I reckon I am quite capable of stuffing up my own finances entirely on my own, without paying anyone any commisions to help me along.

In other words...I am through with any financial adviser. I can do better alone.


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## jiml (18 May 2009)

A piece in the 'West today indicated commissions to the carpet baggers (read finanacial advisers) was something like $62M last year. It would suggest that once they had creamed off 10% it was 10% less to be invested. It was also obvious that once the sector extended into avacados, olives, grapes cattle etc, the govt would close the tax loophole flood gates on the basis of a) lost revenue and b) a distortion of the agricultural sector which was clearly have a negative impact on dejure famers rather than those more intersested in tax minimisation. Clearly competion between the major players in the sector GTP, Timbercorp Gunns etc pushed up the price of land thus increasing costs. It would appear the business plan relied upon continued investment until at least midaway through the second cycle and possibly the end of that cycle. Basically relying upon a wing and a prayer rather than prudent financial management and conservative forecasting. While the current financial situation has been less than helpful, GTP was in serious trouble early in 2008 (and perhaps earlier). it will intersting to read the views of the receivers once they had a thorough look at the books and the business plan. My guess is the real losers will be the shareholders...It seeems unlikely there will be a return to the secort by investors (once caught twice shy) and the fact that tax paid money inthe bank is a safer bet than tax deferred for 10 years. I suppose the questiion at the moment is will the value of assets meet the loan book?


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## drsmith (18 May 2009)

As much as I thought Great Southern would ultimately go under I am a little suprised it happened this quick.

It's only been a few months since it got it's paws on the cattle and some of the forestry scheme assets.


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## Grumpy Old Man (18 May 2009)

basilio said:


> Isn't it really interesting.....
> 
> The current theory seems to be that you can throw up practically any money making story and if it is successful in conning enough people, *it's success saves it from robust scrutiny*.
> 
> * In effect the marketplace is rewarding the the best  and greediest sociopaths.*





Yep.  But the market is now wearing the cost of not doing it's own research.  And guess what...the same thing happens every day of the week.

Do not invest in something unless you a) understand it or b) can afford to lose what you are gambling.


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## Grumpy Old Man (18 May 2009)

Sorry, I have to ask where Investor1 is hiding...???  Gone very quiet since arguing the merit of swapping trees/cows for shares...how did that logic go again?


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## wooduk (19 May 2009)

A Senate inquiry into forestry and mining operation on Tiwi Islands has started this afternoon in Darwin.

Aussie Rules great Maurice Rioli is a traditional owner now living on Melville Island.

MAURICE RIOLI: Most TIs would say is it worth it, considering land use payments for the land? Lease payments for the land are a lot lower than mainland plantations in other parts of Australia where a hectare block would be for, you know, can be leased for up to $100 a hectare, I understand in some place $50 per hectare.

Here I understand it started off at $16 per hectare. I question, like many others, is it all worth it for what they've done to the land?

WELL,WELL how about that on the LEASE PAYMENTS!!!!!!

sourced from ABC Online


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## pist'n broke (19 May 2009)

jiml said:


> A piece in the 'West today indicated commissions to the carpet baggers (read finanacial advisers) was something like $62M last year. It would suggest that once they had creamed off 10% it was 10% less to be invested. earlier).




Well, I asked our FA outright.
Seems commissions on woodlots were 5.5% up to 2005/06 project, 11% for later projects.
Does that suggest that (at least from 2006/07) he should have been highly suspicious?
No wonder our FA always had that gleam in his eyes when we signed on the line. Bloody good rate  of pay.
The same guy declined to give any advice on 'Project Transform', apart from supporting the KPMG line. We voted NO, because it seemed an obvious ripoff.

The FA 'industry' should accept a fair share of the flying fecal matter. The tax dodging investors were not the only greedy fools.

I'd suggest a re-count of the cattle project votes. Or have the paper shredders been to busy the last 2 weeks?
NOT happy! Maybe a tiny bit wiser though.


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## The Shadow (19 May 2009)

Dennis & Co Class Action - Business Spectator 19th May 2009

Lets hope the deal is reversed and justice prevails!!


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## SDE (19 May 2009)

I wonder if Project Transform can be reversed as it was a transaction that occurred within 6 months of the company going into administration (and likely liquidation)


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## slim pickins (19 May 2009)

I hate saying I told you so......... but i did!

to all those who voted yes to this share fiasco.... you've had warnings of the coming demise on this forum. too bad.

my only regret is that they went under so quickly and have not had to face the numerous lawsuits comign their way.

MIS investors, i would not panic just yet. the management rights will be sold to someone by the administrators. alternatively, teh trees will be chopped down and sold for money.... money that will be distributed to us.

anyone who thinks otherwise... well as fas as i know you cant just take the trees that are not yours... if you do its called theft.. and the trees are insured against theft. so stolen trees = insurenace payout.

also.... an apocalyptic fire sweeping across australia destroying all before it... that would help as well as the trees are insured against fire.

Investor 1....... where are you... how is your share portfolio doing.... let me guess you never had any shares in GTP or if you did... you got out just in time.... heheheheheheh.

please do you have any more buy reccomendations.... i'll short every one of them


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## pucks (20 May 2009)

Hi

this may seem like a really dumb question but i have finance with great southern for the 2006 plantation lot. i still have another 2 yrs of paying this finance off and have already paid 3 yrs of it - since they are going under do i still pay or do i hold off???? i understand that the loan technically is through bendigo bank now so in theory i should still be paying them as they are not the ones going under but i feel a bit pissed off to be paying money for a project  that could end up as nothing. even when i rang great southern today they didnt have an answer for me - they just said yeah i suppose you should still be paying it off. anyone else in the same boat and if so what are you doing????


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## wooduk (20 May 2009)

pucks said:


> Hi
> 
> this may seem like a really dumb question but i have finance with great southern for the 2006 plantation lot. i still have another 2 yrs of paying this finance off and have already paid 3 yrs of it - since they are going under do i still pay or do i hold off???? i understand that the loan technically is through bendigo bank now so in theory i should still be paying them as they are not the ones going under but i feel a bit pissed off to be paying money for a project  that could end up as nothing. even when i rang great southern today they didnt have an answer for me - they just said yeah i suppose you should still be paying it off. anyone else in the same boat and if so what are you doing????




It is not a dumb question and welcome
SPEAKING for myself Iam not paying my loans to Bendigo-Adelaide bank until I get a written reply from them and now the receiver as to what is the status of my investment and I believe but you need to check that under corporate law they can not  force you  nor intimidate,threaten etc.

check it out for yourself


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## slim pickins (20 May 2009)

Pucks,

Thats a good question..... as a general rule, i would advise paying off loans on assets that you intend to keep. 

if you dont want the trees then i suppose you could fail to pay the loans and they will probably take them off you. unfortunately they can sue you for the money and in the worst case initiate bankrupcy proceedings against you. 

you definitely do not want this. but if you can come to agreement with the bank and administrators then go with somehtign you are both happy with. 

int he end it comes down to whether you think you will get any money form the trees in the end.

personally i think the chances of gettign more money from the MIS schemes then you paid, is about 70% in your favour. 

im really having troubles thinking of ways i could take these assets if i was GTP, administrator, bank or some middle man. 

after all, i have spent my life trying to get somehting for nothing and taking other peoples assets and i can tell you its nto that easy takign somehting thats nto yours and getting away with it.

equally though... would i continue to pay off an asset for the next 2 years that has only 70% of breaking even..... hmmmmm tough one. 

just remember .... you alone are the only perosn that can relinquish your ownership over YOUR assets. just be warned.... everyone .... absolutely everyone will try to take them from you.... and will give you contless resons why you are better off wouthout your assets. 

btu all those people who devalue your assets, will at the same time want those assets for themselves. so ask yourself why!

the onyl way i can see these assets being taken from MIS investors is through inflated management fees, inflated harvesting costs, low market prices.

all of these obstacles can be addressed and rectified. there is no reaosn why MIS investors should suffer the fate of GTP shareholders.


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## pist'n broke (20 May 2009)

pucks said:


> Hi
> 
> this may seem like a really dumb question but i have finance with great southern for the 2006 plantation lot. i still have another 2 yrs of paying this finance off and have already paid 3 yrs of it - since they are going under do i still pay or do i hold off???? i understand that the loan technically is through bendigo bank now so in theory i should still be paying them as they are not the ones going under but i feel a bit pissed off to be paying money for a project  that could end up as nothing. even when i rang great southern today they didnt have an answer for me - they just said yeah i suppose you should still be paying it off. anyone else in the same boat and if so what are you doing????




Not a dumb question! 
Read:
http://gscentral.great-southern.com...ocument&ID=105693&ObjectType=3&ObjectID=11909

According to the administrators we are supposed to continue paying.
I have exactly one more payment to make, so I will probably do just that.
The trees are still there, after all.
Funny they didn't have the answer that is on their website! Incompetence everywhere, GSL typical.


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## wooduk (20 May 2009)

slim pickins said:


> Pucks,
> 
> Thats a good question..... as a general rule, i would advise paying off loans on assets that you intend to keep.
> 
> ...




I concur as to what Slim says,but I believe taking advantage of a scenario that would involve as a collective group and consolidating investors that want to enhance their investment that also included buying the land and consolidating the co-op on behalf each investor.

This means us managing it,auditing it and in the usual past averaging the returns just like GTP.

The land would have to be strategically selected and at a price that would suit all and sundry.
We collect on the coppings,we collect on the bio mass fuel ,we collect on the structural grade timber that Lignor wants 
We keep it in Australian hands,we enjoy future land value increases,we support local communities.

We have a renewable source of income,and any thing that comes outof this is this----------

THAT FOR ONCE AND FOR ALL PUT AN END TO THE FOOD,FOREST,LIVESTOCK AND CROPPING AGRIFOREST SECTOR BEING TREATED LIKE A CHEAP PROSTITUTE THAT IS FIT TO ONLY PILLAGE AND RAPE .

Metaphorically speaking.


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## Portfolio (20 May 2009)

It looks like the "responsible entity" wasn't actually that responsible.

Seriously though according the FH information letter growers will be deemed creditors in this process meaning you may be able to "offset" your loan (liability) with your rights as a creditor.

Can anyone confirm this?


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## Forenth (20 May 2009)

wooduk said:


> I concur as to what Slim says,but I believe taking advantage of a scenario that would involve as a collective group and consolidating investors that want to enhance their investment that also included buying the land and consolidating the co-op on behalf each investor.
> 
> This means us managing it,auditing it and in the usual past averaging the returns just like GTP.




I've had the same thought: If the land under our trees is to be sold in a fire sale then what if investors bought it cheap. After all what farmer will want land covered in trees and have to remove all the stumps?

Pick the best land and when the trees are harvested then the lease ends. The land owners then allow the coppice to grow and NO ONE has to pay GTP another $3000 to reinvest in it.

I acknowledge I don't have the expertise to arrange this but I do see the sense as long as the land price isn't too much and management of the scheme can be set up.

Anyone willing to be a contact point for this? Slim? Wooduk?


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## The Shadow (20 May 2009)

People,

Unfortunately the sentiment is right but the process is flawed.

Remeber that GS has in excess of 200 farmlets spread across 5 States, with Trees on them ranging from 10 yo to newly planeted (suposedly planted!! I understand that the 2008 Trees have not been planted by GS or TIM and under the new ATO rules which requires 70% of funds to be spent in the first 12 months is required to grant deduction. No trees = No deduction.)

The land which the trees are on is also a mixture of land owned by GS (mortgaged) or leased to farmers (or Tiwi Islanders). Big problem.

A better solution is to lobby the Govt/Admin/Reciever to appoint a new RE with a view to managing the trees to maturity under the same terms as the GS deal. We may however have to consider contributing some small amount of $$ to the new RE to ensure the viability for all and sundry!!

Food for thought?


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## slim pickins (20 May 2009)

Forenth said:


> I've had the same thought: If the land under our trees is to be sold in a fire sale then what if investors bought it cheap. After all what farmer will want land covered in trees and have to remove all the stumps?
> 
> Pick the best land and when the trees are harvested then the lease ends. The land owners then allow the coppice to grow and NO ONE has to pay GTP another $3000 to reinvest in it.
> 
> ...





I could run a show like this. the way GTP structured all this, makes it complicated but not impossible to take over as growers.

the first thing we would have to do is get a couple of thousand investors onside. then we would have to break up into groups chonologically, as our common interests arise out of the year we bought into the scheme.

we establish a co-operative, company, not for profit organisation or even some sort of a charity (no tax) that looks after our interests and seeks to buy land with plantings from a particular year. then we negotiate the processing, sale and transport of the wood.

pretty much do what GTP has done, except we do it without trying to make a profit.... i dont think its too difficult. 

btu we'll need a thousand people on side or some really really rich perosn with money to burn. thats the only thing holdign us back. our ability to organise and raise funds..... actually.... i think raising funds will be less fo a problem then organising everyone. 

i was just reading.. there were 40,000 poeple involved in MIS... half of them took shares and a significant amount had an investment that can be considerd insignificant.... that could leave about 20,000 people to work with...

out of those we need 1000 to make this work... i could get together 20. and egt moeny out of 10 of them.... as you can see it s long road to doing it ourselves.

anyone who wants can send me a message and ill give them my phone number.

ill respond to everyone except for "investor1"  he can send me hsi stock reccommendations if he wants


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## Taltan (20 May 2009)

slim pickins said:


> we establish a co-operative, company, not for profit organisation or even some sort of a charity (no tax) that looks after our interests and seeks to buy land with plantings from a particular year. then we negotiate the processing, sale and transport of the wood.
> 
> pretty much do what GTP has done, except we do it without trying to make a profit.... i dont think its too difficult.




I think its a nice sentiment but firstly everyone would like a charity (no tax) that looks after their interest. Secondly GTP weren't making a profit, that was the problem the bankers had. I also suspect most MIS investors are time poor - given their need for tax minimisation.

I suspect this will end up in the courts to determine the exact rights/obligations of MIS investors and the new land buyer. I don't know the answer but I suspect the MIS contracts will be important in determining what rights MIS investors have to the land versus what right a new land buyer has to charge exoribant management fees, remove the trees etc.


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## moreld (20 May 2009)

*Re: GTP - Ferrier Hodgson documents*

This may have been posted here, but I couldn't see it.
http://www.ferrierhodgson.com/en/Current%20Matters/Corporate%20Recovery%20Matters/Great%20Southern%20Limited.aspx
First meeting 11:00 27 May in Melbourne.
In the above pdf documents (here is direct link to creditors pdf) there is a form for informal proof of debt, filling this in and returning to Ferrier Hodgson gets you a vote at the table.

I will be attending and am happy to act as proxy for any TREES holders.

I hold TREES2 and TREES3 in GTP.


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## wooduk (20 May 2009)

Taltan said:


> I think its a nice sentiment but firstly everyone would like a charity (no tax) that looks after their interest. Secondly GTP weren't making a profit, that was the problem the bankers had. I also suspect most MIS investors are time poor - given their need for tax minimisation.
> 
> I suspect this will end up in the courts to determine the exact rights/obligations of MIS investors and the new land buyer. I don't know the answer but I suspect the MIS contracts will be important in determining what rights MIS investors have to the land versus what right a new land buyer has to charge exoribant management fees, remove the trees etc.




Taltan

I generally agree on most of your comments,however to wait and see what the so called FairValue that the liquidator,receiver which one is it? for me I am not prepared to wait.

Already the Bent/bank of Assanine is trumpeting you will keep paying the loans that you had no say in transferring and having a bankrupt director doing it on your behalf let alone a one piece sheet that was signed by Rhode/runner and another from the dixie club bank.

I believe but cannot confirm in the 2008 project for instance that the trees have not been planted and yet the bank calls people who are investors and I reckon are also creditors as of receivership

The receiver and the Bendigo/Adelaide bank need to address this urgently as I indicated to the bank, and that they need to read the Prospectus of each Investor that signed up to the relevant year that GTP agreed on the year the loan taken as in my loans I do have recourse,meaning I can default and they can have the trees,

In the mean time I have stopped auto deductions and they can correspond in writing only so as I can get professional qualified advice under the circumstances.

This is where the receiver must have a moratorium on the loan payments.

At the end of the day these are good investments and to standby and get walked over is B.S.


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## slim pickins (20 May 2009)

Taltan said:


> I think its a nice sentiment but firstly everyone would like a charity (no tax) that looks after their interest. Secondly GTP weren't making a profit, that was the problem the bankers had. I also suspect most MIS investors are time poor - given their need for tax minimisation.
> 
> I suspect this will end up in the courts to determine the exact rights/obligations of MIS investors and the new land buyer. I don't know the answer but I suspect the MIS contracts will be important in determining what rights MIS investors have to the land versus what right a new land buyer has to charge exoribant management fees, remove the trees etc.




yes, everyone would like a charity that looks after their own interests.... btu our interests are the same! particularly investors of a particular year.

GTP were not making a profit because of their debt exposure, lavish spending and marketing and exectuive pay. 

MIS investors might be time poor but who is time poor to save their million dollar investment.... hmmmmm.... im not! I'll make time. as I've said earlier.... peopel with insignificant investments will not bother anyway and probably have shares already. 

the new land manager might try to charge outlandish fees.... yes its possible.. but what serious company would expose themselves to a torts/breach of contract suit worth hundreds of millions. thats enought to sink most companies. especially as they knwo that they get 5% of the profits upon harvesting. there is $500 million worth in trees. thats a lot of moeny for doign very little.

after all how much cost is involved in watching 5 6 year old trees grow  when was the last time you went to forest. chances are it grew all by itself without anyone's help.

again if they remove the trees, most of us may have to pay the government lot sof moeny as the deductions may not be valid. which would lead to a court case that will sink the company trying to do so...... so im not too concerned.... it might even be easier to recover moeny from the courts then sell the trees in the open market in a recession.


----------



## pucks (20 May 2009)

Received the info from the administrators today - anyone notice the hourly fees they are paying themselves??!!!!! $130 an hour for a junior filer and up to 5 or 600 an hour for the managers. unbelievable!!!!!


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## slim pickins (20 May 2009)

i saw those fees.... not as bad as i thought.... they are charging posting fees at cost... wow! looks liek they will take a couple of millon the first few weeks to sort it out. not bad for a 800 million debt. but essentially the party is over for the sahreholders like always.

for MIS poeple they said they will assess each project and its "viablitity". I assume this viability is form the point view of the creditors... ie banks, and i cant imagine waiting 5 years for 100 million is worthwile for a bank if only 50% is recoverable and if it will trickle in.

for this reason i predict creditors will choose insolvency and sell everyhting. this means creditors will be getting good money for unencumbered land and getting a pittance for land with trees in it... so there is a possibility of a united group of MIS invesotrs getting some very good land deals in the next 3months.

otheriwse it will go to a new management company and a fee will have to negotiated.


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## moreld (21 May 2009)

*Re: Creditors Voting*

I emailed the following question to the administrators today.
_Can you please outline the process for voting by creditors on matters while a company, Great Southern in this instance, is in administration.
I am particularly interested in whether a majority of debt holders of each class of debt by number and amount need to agree, as is done in the USA. eg do secured debt holders, unsecured debt holders, preferential debt holders, each need to agree as groups. Or is it simply all creditors as one group and hence only the banks in the case of GTP have any real vote?  _

If anyone here knows the answer I am very interested. If Australia does not have a US style system that means the banks get to call all the shots, which totally sucks for obvious reasons. If we do have a USA style system then each group of us unsecured creditors need to start working together to ensure the best outcome.


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## jiml (21 May 2009)

It happened before my time, but is anyone aware whether the shareholders approved the $1.5m non-recourse loans and also the $2m payout to John Young? At the time of the loans (more like gifts) was there any discussion as to why the loans were non-recourse?


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## wooduk (21 May 2009)

slim pickins said:


> yes, everyone would like a charity that looks after their own interests.... btu our interests are the same! particularly investors of a particular year.
> 
> 
> MIS investors might be time poor but who is time poor to save their million dollar investment.... hmmmmm.... im not! I'll make time. as I've said earlier.... peopel with insignificant investments will not bother anyway and probably have shares already.
> ...






Slim and fellow tree huggers,spoke to account(toecutter)ant and informed that there is an interest in the concept of a co-op.

Ihave pressed the accountant as far as a thumb nail scratch painting of the structure and how it would accomadate various investors at different stages and locations in Australia where their investment is ?

The overall concept would be accomadate an investor  in the collective and that each contributes to the purchase of landsand that a formula would need to applied in the purchase and the returns on the land and the trees are treated in the same way as GTP

Remember this is a concept and not the model that will have flaws and would need a lot of legal eagle and savy book keepiing  by an independant auditor,  
like KPMG------no!-NO! bad joke

At this point with the interest and enquiries,and taking it away from people who do not care I reckon we are on a better winner and that down the rhode after he is run over we will thank GTP for this


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## Bugsy (21 May 2009)

I spoke with Bendigo & Adelaide bank yesterday -    they plainly refused to listen!! The guy just went on & on  about how the loan was payable whatever the circumstances were. My loan started off with Great Southern Finance Ltd, I only received a letter from Bendigo & Adelaide Bank on 30/04/2009 informing about them taking over the loan. I'm sure that's the case with a lot of other people here on the forum.
I was looking at the ATO product ruling.. herez a copy paste link from http://law.ato.gov.au/atolaw/view.htm?docid=PRR/PR200839/NAT/ATO/00001#P37
*************************************
Option B - Principal and Interest loans

92. The principal and interest loans offered by Great Southern Finance Pty Ltd and the Preferred Financier include the following features:

    ·
          principal and interest loans with terms of 2, 5, 7 or 10 years;

    ·
          the borrowing includes the GST component of the fee for Establishment Services; 

    ·
          equal monthly principal and interest repayments over the term of the loan, commencing on, or about, 31 July 2008; 

    ·
          interest rates will be fixed for the term of the loan;

    ·
          a Loan Establishment Fee of 0.5% of the amount borrowed may be charged; and

    ·
*the security for the loan is taken over the Grower's interest under the LMA.*
*********************************************************
*
Doesn't it clearly say in the last line that the loan is secured... *
I'm trying to find a copy of my "Geat Southern Renewable fibre Project 2008" Prospectus... can't find it.. Can any1 here help me with that.. I'm sure there will be something in the prospectus about the finance being secured by the Grower's interest..


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## jiml (22 May 2009)

Interesting know waht is Investor 1's view of a coop, or, did he/she convert his/her holding to shares?


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## goodie3shoes (22 May 2009)

This pretty much nails the issue for us poor cow people.Makes me wonder why these journos have been so slow at picking this issue up.A bit more of this kind of journalism would have saved us.And ,who are the clowns who voted in favour anyway?
http://business.smh.com.au/business/great-southern-crash-fells-expert-opinions-20090522-bhj3.html


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## The Shadow (22 May 2009)

Bugsy said:


> I spoke with Bendigo & Adelaide bank yesterday -    they plainly refused to listen!! The guy just went on & on  about how the loan was payable whatever the circumstances were. My loan started off with Great Southern Finance Ltd, I only received a letter from Bendigo & Adelaide Bank on 30/04/2009 informing about them taking over the loan. I'm sure that's the case with a lot of other people here on the forum.
> I was looking at the ATO product ruling.. herez a copy paste link from http://law.ato.gov.au/atolaw/view.htm?docid=PRR/PR200839/NAT/ATO/00001#P37
> *************************************
> Doesn't it clearly say in the last line that the loan is secured... [/B]
> I'm trying to find a copy of my "Geat Southern Renewable fibre Project 2008" Prospectus... can't find it.. Can any1 here help me with that.. I'm sure there will be something in the prospectus about the finance being secured by the Grower's interest..




Bugsy, I can tell you quite categorically that the Finance material used by GS states "Security may be taken over the borrowers interests in the Project at GS Finance's discretion".

There is a bigger issue here as well. These banks are now trying to slug investors/borrowers with exessive breakcost!! This is criminal and in the advice i have recieved should not apply.

Infact when I invested, i was told that no breakcost would apply and I could payout at any time.

Check your loan agreement....there is nothing there about breakcosts or how much can be charged!!


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## The Shadow (22 May 2009)

More news....

I heard a rumor that a certain now retired MD of GS has recently acquired a large chunk of the GS loan book very cheaply. If true, it just shows you how doggy/corrupt the board was to allow such a transaction.

The same MD disposed of his L&M investments prior to project transform!!

I wonder if the Administrator will look at this transaction??


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## wooduk (22 May 2009)

wooduk said:


> I concur as to what Slim says,but I believe taking advantage of a scenario that would involve as a collective group and consolidating investors that want to enhance their investment that also included buying the land and consolidating the co-op on behalf each investor.
> 
> This means us managing it,auditing it and in the usual past averaging the returns just like GTP.
> 
> ...




ATTENTION  !!!     GREAT   SOUTHERN   INVESTORS
IWC – AN INDEPENENT WOODLOT CO-OPEATIVE

TOWNSHEND PRUDENTIAL PTY.  LTD.  INVITE  WOODLOT OWNERS IN THE GREAT SOUTHERN PROJECTS TO JOIN IN A FARMING CO-OPERATIVE TO EXPLORE THE VARIOUS PROSPECTS OF THE PROTECTION AND MANAGEMENT OF THEIR WOODLOTS.
THIS IS INITATATED BY THE GROWERS AND INVESTORS IN THE TREES TO JOIN AND FORM THEIR INTERESTS AS A COLLECTIVE FOR THE ON-GOING MANAGEMENT OF THEIR WOODLOTS.
EXPRESSIONS OF INTEREST SHOULD BE DIRECTED AS FOLLOWS:-
TOWNSHEND PRUDENTIAL PTY LTD   PHONE   03 98796555  
email:   Townshend@immm.com.au 
email:	bzm2003@bigpond.com		          AFSL 223947
						Townshend Prudential P/L

PH:  61 03 98796555	FAX:  61 03 98794466			          Townshend Prudential Pty Ltd
                          Townshend Prudential-  Financial Planners   ‘The Bottom Line is “YOU’.


----------



## KJL (22 May 2009)

goodie3shoes said:


> This pretty much nails the issue for us poor cow people.Makes me wonder why these journos have been so slow at picking this issue up.A bit more of this kind of journalism would have saved us.And ,who are the clowns who voted in favour anyway?
> http://business.smh.com.au/business/great-southern-crash-fells-expert-opinions-20090522-bhj3.html




Yep, Michael Pascoe is great at hindsight - there's no-one better at it than he. Have a look at his article (a link is in the side bar to your link called "Australia's greatest scam comes crashing down") last week in the SMH (I think Tuesday) saying in relation to the MIS collapses that it's hard to know who to have the most scorn for, the managers the bankers or (quote) "the mugs suckered  into buying products", and also that "there will be investors feeling pain here wanting to blame everyone but themselves". 

Yep, we investors were just naive mugs, and Michael was the expert who could have saved us all if only we'd not been so stoopid. If only we'd done our due diligence, or the products were AAA rated, or backed by expert reports, or offered by a well-backed ASX listed company, or recommended by god knows how many advisers who'd done their own due diligence.  What's that you say, they were? 

Oh right.  Well if anyone's got a bottle or two of hindsight instead then I'm up for buying one. 

Or we can just ask Michael what he's investing in next year. 

Either would do.

Kev


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## moreld (22 May 2009)

Entertaining post KLJ, it bought a smile to my dial.

One key rule in investing is: *Structured products are structured to take money away from you and give it to other people.* There is almost no if or buts about that.  

Say it twenty time with me. Structured products suck. They are designed to make others rich. Do not invest in them. 

On to something useful. I received an excellent reply from the administrators about voting at the creditors meeting.
_"In terms of voting at meetings of the creditors of Great Southern Limited, the Corporations Act requires that a particular resolution must be passed in terms of both number of votes and the dollar value of votes. This serves to ensure that the major banks do not have all the power. Where the vote in terms of number conflicts with the vote in dollar terms then the Administrator has the casting vote and is required to vote in the manner which he believes is in the best interests of all creditors."_

While I'd would prefer a USA style system, that seems fair enough to me. Any fellow mug TREES holders like to talk about what actions are best for us? 

1. Do not allow the banks to change administrator would seem like top priority. Though accepting GTP one is also not appealing. Hey maybe we can appoint our own and let even more people suck GTP dry. 

The above reply probably cost creditors $100


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## YELNATS (22 May 2009)

KJL said:


> Yep, Michael Pascoe is great at hindsight - there's no-one better at it than he. Have a look at his article (a link is in the side bar to your link called "Australia's greatest scam comes crashing down") last week in the SMH (I think Tuesday) saying in relation to the MIS collapses that it's hard to know who to have the most scorn for, the managers the bankers or (quote) "the mugs suckered  into buying products", and also that "there will be investors feeling pain here wanting to blame everyone but themselves".
> 
> Yep, we investors were just naive mugs, and Michael was the expert who could have saved us all if only we'd not been so stoopid. If only we'd done our due diligence, or the products were AAA rated, or backed by expert reports, or offered by a well-backed ASX listed company, or recommended by god knows how many advisers who'd done their own due diligence.  What's that you say, they were?
> 
> ...




Spot on post. Full of vitriol and accuracy, Easy for journalists to be so fancy-dan clever, after the fact.


----------



## MugPunter (23 May 2009)

Can anyone see how shares in GTP may be (at some future point) worth something? I was dang-fool enough to actually buy GTP shares (can't even blame the cattle rort). Also an investor...


----------



## wooduk (23 May 2009)

wooduk said:


> ATTENTION  !!!     GREAT   SOUTHERN   INVESTORS
> IWC – AN INDEPENENT WOODLOT CO-OPEATIVE
> 
> TOWNSHEND PRUDENTIAL PTY.  LTD.  INVITE  WOODLOT OWNERS IN THE GREAT SOUTHERN PROJECTS TO JOIN IN A FARMING CO-OPERATIVE TO EXPLORE THE VARIOUS PROSPECTS OF THE PROTECTION AND MANAGEMENT OF THEIR WOODLOTS.
> ...






The Shadow said:


> More news....
> 
> I heard a rumor that a certain now retired MD of GS has recently acquired a large chunk of the GS loan book very cheaply. If true, it just shows you how doggy/corrupt the board was to allow such a transaction.
> 
> ...






slim pickins said:


> Pucks,
> 
> Thats a good question..... as a general rule, i would advise paying off loans on assets that you intend to keep.
> 
> ...






slim pickins said:


> I could run a show like this. the way GTP structured all this, makes it complicated but not impossible to take over as growers.
> 
> the first thing we would have to do is get a couple of thousand investors onside. then we would have to break up into groups chonologically, as our common interests arise out of the year we bought into the scheme.
> 
> ...






Bugsy said:


> I spoke with Bendigo & Adelaide bank yesterday -    they plainly refused to listen!! The guy just went on & on  about how the loan was payable whatever the circumstances were. My loan started off with Great Southern Finance Ltd, I only received a letter from Bendigo & Adelaide Bank on 30/04/2009 informing about them taking over the loan. I'm sure that's the case with a lot of other people here on the forum.
> I was looking at the ATO product ruling.. herez a copy paste link from http://law.ato.gov.au/atolaw/view.htm?docid=PRR/PR200839/NAT/ATO/00001#P37
> *************************************
> Option B - Principal and Interest loans
> ...




1./Slim,tried to get in contact,please retry me again --please note I have got my accountant to start  an independent growers interest group and the intent is to go to this meeting in Melbourne to inform the administrator that we will instigate a group of growers and investors and inform that we are creditors,just like ANZ did,

But first we need people to register and my accountant has gone as far placing an advertisement on the back page of the FIN review 26/05/09.

I am personally concerned as that not do anything is a disaster,and these lawyers and big institutions will get away with it. Athought that comes to me that the gas lighting in the media and the officianado crap from the administrator appointed by the directors of GTP,is all there to do delay the individual investors rights

REMEMBER that possesion is 9/10's of the law

All the quotes above and other contributors are my motivation even the negatives,

I say as a collective as a starting point ,if any legal or another organisation wants to talk or as a formidable co-op block it is my belief we are in a better position

For the record Iam an investor in 2003,2004,2005 tree plantations
I am also for the completion of tree maturity and in the co-op supporting running and enhancing this co-op


----------



## drsmith (23 May 2009)

MugPunter said:


> Can anyone see how shares in GTP may be (at some future point) worth something? I was dang-fool enough to actually buy GTP shares (can't even blame the cattle rort). Also an investor...



Not me. This had the smell of dead stock walking from the time the directors tried to get their paws in investor's assets (Project Transform) to keep the company afloat. Timbercorp's collapse though may well have hastened the end for Great Southern.

Even Elders (formally Futuris) is now in the unfortunate position of having to go begging to it's bankers for a short term extension of a significant slab of it's maturing debt facilities.


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## drsmith (24 May 2009)

With GTP now in administration a couple of questions come to mind which may be of significant to woodlot holders.

_1) Where GTP has leased the land, what happens if GTP defaults on the lease playments before the trees are harvested ? 
Specifically, does ownership of the trees (in part or in full) transfer to the land owner upon default of lease payments by GTP ?_

Wth 1) above I'm assuming that GTP is liable for the ongoing lease payments and not the individual MIS investors.

_2) Where GTP owns the land but is required to sell to repay it's debts (either under administration or liquidation), what are MIS woodlot holders rights after the land is sold ?_

Of specific interest here is whether the new land owner would gain any rights over the trees prior to scheduled harvest. If so then the MIS woodlot holders rerurns would be adversely affected. If not then the price GTP would get for the land would be adversely affected as the new land owner would not be able to earn an income off the land until the trees are harvested.

Are the above matters covered in the MIS PDS's and furthermore, can individual MIS woodlot holders determine whether their woodlots are on land leased by GTP or owned by GTP ?


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## wooduk (24 May 2009)

drsmith said:


> With GTP now in administration a couple of questions come to mind which may be of significant to woodlot holders.
> 
> _1) Where GTP has leased the land, what happens if GTP defaults on the lease playments before the trees are harvested ?
> Specifically, does ownership of the trees (in part or in full) transfer to the land owner upon default of lease payments by GTP ?_
> ...





And in quoting Dr Smith this ninny as Dr Smith from L.I.Space would say!

So investors why are not we collectively putting up an offer,proposal or at the very least a notification to the receiver or's and collectively take charge of our investments.
Remember,we joined in this MIS investment for the long haul,if Project Transform had not happened we would have kept on paying and like some of the new investors of recent times 07/08 and the trees 1 and trees2-3 would have blithely carried on and possibly more would have bought trees in the MIS schemes.

I hear detratractors saying that it would have been found out down the Rhode,but when? and what would the scenario have been then?

We are opportunists and good corporate citizens,that can and know that reading on this forum and others,that generally agreeing that this is a good investment.

We have and are doing the hard yards and damned if I want some shiny pants telling me that you out of the equation and you will cop what I give you which we know what it will be.

Ponder this thought,don't you reckon former founder and CEO who stepped down before Project Transform would not be eyeing off the best in WA,which is the homeland of GTP,?Iknow I would?,you'd be an idiot if you didn't.

So how would it be done?

Out of the tree huggers what numbers do we have out of the 40,000 investors.?

Of that what are made up of advisers that are in the same boat?

What about accountants?
Lawyers?
Doctors ?

Or the ordinary punters like me?

The point here is that it doesn't matter what or who you are your money and investment is the same as anybodys except for the quantity you bought---remember that you paid for them .

In a nutshell an MIS co-operative with every body and with one voice form a block or an alliance to get the banks grubby fingers off the investments and even propose to buy the land at a substantial discount,what and how much needs to be looked at and consolidate the mish mash of investments from a logistical point and also on the annualised investment years

Too hard?,not really especially when you take a collective loan from the biggest owed entity that wants cash back and wants to lend it again

Banks want their cash,and we want the investment with a decent return and the land at a price that can pip other big companies,we want a tax effective scheme again to continue and we want to enhance our price at the mills that is if we the collective do not own  it by then.

Dream on wooduk?--NO,that is the potential my co-op members we have,from 1998 onwards,onwards and onwards


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## The Shadow (25 May 2009)

People,

I dont want to rain on your parade..after all i am a significant investor across a number of the GS MIS Projects.

However a number of you need to understand that you cannot just form a co-operative and ask people to contribute further funds. There are rules for this. (despite GS managment abusing them). A formal PDS would need to be put together and lodged & approved by ASIC. It needs to spell out the contributions etc.

This process would take atleast 3 months to put together at costs of around approx $300K-$400K. Who will fund that?

Besides I dont think that the Reciever will wait that long and dispose of the assets.

In my view a stage approach is needed.

I beleive that the fight should now be brought to GS/the Administrator & the Reciever by a Hard Ass Law Firm acting for all growers in a Class Action. This will by the significant time to then form a Growers Action Group that can explore such issues as:
* Appointment of a New R/E
* What projects are still viable?
* SHould land be purchased from the Reciever and what is the cost?

Please note that these are all not that easy to do and they would cost time and money.

From my part, let me reassure you that the Admin & Reciever are working in the Lenders best interests not ours and I for one will begin by pursuing legal action.


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## Ripped Off (25 May 2009)

I am all for a collective, co-op call it what you like, to be formed so we the investor and owner of woodlots can continue.
Anyone want my proxy for the upcoming meeting??


Cheers
Paul


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## wooduk (25 May 2009)

The Shadow said:


> People,
> 
> I dont want to rain on your parade..after all i am a significant investor across a number of the GS MIS Projects.
> 
> ...




Duly noted Shadow and is taken on board,but if it good enough for GTP and GSM to do it right under the corporate watch dogs nose then what is good enough for goose is good enough for the wooduk

                                                                 see you at the colliseum on the 27th


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## moreld (25 May 2009)

*List of accountants and advisors who recommended MIS*

Hi All
I thought it would be good to out all the accountants and advisors who recommended MIS schemes to their clients.
I posted about this and started the list here:
http://www.fusioninvesting.com/2009/05/was-bernie-madoff-a-great-southern-advisor/

Come on, out your accountant or advisor now. I believe it is more appropriate to name firms rather than individuals.

Secondly I wish to ensure TREES debt holders are represented on the Committee of Creditors. This will be voted on at Wednesday's meeting. Anyone who wishes to talk about this can contact me via the above link, or from here if that is possible.


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## KJL (25 May 2009)

The Shadow said:


> I beleive that the fight should now be brought to GS/the Administrator & the Reciever by a Hard Ass Law Firm acting for all growers in a Class Action. This will by the significant time to then form a Growers Action Group that can explore such issues as:
> * Appointment of a New R/E
> * What projects are still viable?
> * SHould land be purchased from the Reciever and what is the cost?
> ...




Shadow

All valid points in my view - thinking investors can just take over these things is (without wishing to offend anyone) pie in the sky.

Last Thursday the clients of my financial adviser went to a presentation by a Sydney litigation firm called Slater & Gordon, S&G are now looking at Great Southern and considering what grounds for a case we as investors have. 

If anyone is interested you can register your interest with S&G on their website - they are looking at a potential class action. Rest assured that registering in itself does not commit you to anything, or paying any legal fees etc.  But it does put you on an email distribution list so that the investors can have someone look at things from our point of view - as you say the admin and receivers will be seeking (and have to) protect the interest of their own clients. If there is any potential class action then you can decide whether you want to be a part at a later stage.

In particular, S&G were looking at the merits of a case, then potentially seeking assistance from a litigation funder - ie someone who pays for or funds the litigation in return for a slice of any recoveries. 

If anyone's interested the S&G site to register on is:  http://www.slatergordon.com.au/contactus.aspx

They also have a Helpline set up - 1800 555 777

Probably worth disclosing that I have no interest other than being into these MIS for $600k+ lent to me by GS. I notice they're still asking me for my loan payments, in fact they sold the loans to Bendigo on April 30, so I'm now royally shafted with a loan bill for the next decade and nothing to fund it - so this may well put me under if not sorted  

Also worth confessing that I mainly lurk and read on investment sites without usually posting, but this latest turn of events has got me having to do something!

Kev


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## Belrose (25 May 2009)

Good work Wooduk,

I agree with you.

I would definitely be interested in buying up some of GTP's land although we don't own very many woodlots.  (Large shareholding though, sadly).


----------



## jiml (25 May 2009)

Who do you go after? I was involved in Sons of Gwalia and fortunately the directors had assets and malfeasance was self evident. With GS the banks, as secured creditors believe they have first (and second, and third) bite of the cherry otherwise they would not have called in the receivers immediately after the company went into voluntary admin. Is there a case against the directors? Clearly GS as an entity has no assets other than securitised against loans it may be a case where unit holders stand in relation to woodlots etc. One thing I do know, shareholders have done there dough.


----------



## drsmith (25 May 2009)

wooduk said:


> And in quoting Dr Smith this ninny as Dr Smith from L.I.Space would say!
> 
> So investors why are not we collectively putting up an offer,proposal or at the very least a notification to the receiver or's and collectively take charge of our investments.
> Remember,we joined in this MIS investment for the long haul,if Project Transform had not happened we would have kept on paying and like some of the new investors of recent times 07/08 and the trees 1 and trees2-3 would have blithely carried on and possibly more would have bought trees in the MIS schemes.
> ...



I fail to see how the above relates to the questions I raised but the following comment from earlier in this thread is of relevance.

https://www.aussiestockforums.com/forums/showpost.php?p=385731&postcount=1432

and specifically within that post



ThePav said:


> *Regardless of who managers the schemes these schemes have a legally binding lease agreement over the land. If the bank takes possession of the land and then sells this land to another party that party is legally obliged to honour the lease agreement so the ownership of the land is irrelevant.* In fact Great Southern is currently selling such land to help keep the creditors at bay. This is a sign of their desperation. *To sell land that is encumbered by lease you have to offer it at a huge discount as the purchaser is unable to do anything with it while the lease remains intact.*




If the above is correct then why would MIS investors need to buy the land to protect their investment ?


----------



## ThePav (25 May 2009)

The above is correct. 

The potential owners would need permission from the RE if they even wished to enter the properties. 

The only "possible" scenario that might put the plantation investments at risk is if they do not harvest within the lease terms (11 years from memory). These blue gums don't grow much after the 10 year mark so there is no commercial sense in keeping them in the ground any longer. 

I can't see any real reason "commercial" reason why scheme investors would want to purchase the land unless they could buy it a good price which, lets face it, is a real possibility.

Again what needs to be considered is that although individuals own identifiable woodlots when distribution occurs it is based on your proportional interest in the project. 

I believe that determining who is RE is more important than owning the land from a security perspective. The RE is determined by a normal resolution. Controlling the RE will lock in investors security and owning the land will only add some comfort and at the right price some additional financial benefits.


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## Forenth (26 May 2009)

drsmith said:


> If the above is correct then why would MIS investors need to buy the land to protect their investment ?




Besides security of the current investments it also allows investors to get the second crop from the coppice for zero rather than paying another $3000 to someone. Or selling such rights to someone else.

Of course any of that would depend on setting up a co-op or other such structure. Difficult perhaps but if you've got a lot already invested then isn't it worth investigating?


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## cathadfab (26 May 2009)

Apart from forming co-operatives now to buy land that in effect we really should hold the leases for, my belief is now is the time to get vocal. it's one thing sitting around here planning ideas that potentially could be too grand to get off the ground, it's another to get out and badger each and every ear that we can to have our voice heard. I'd happily be part of a co-operative, but then again committees and large groups are hard to handle - ego gets in the way and that takes us back to where we started.

It is cathartic to get all that has happened out on paper, for another the power of a million voices is strong. Or perhaps the power of 45000 voices is strong.

I have no idea if it will do any good but I have just emailed Tony Burke, the MP that the administrators are briefing on the company's situation. I have also sent this email to the Sydney Morning Herald Editor. I have spilled my guts on who advised me to buy these investments, along with sharing my reason for buying into this investment scheme. I have explained that for someone with my knowledge, I do my best, but then must also trust the advice and support to this advice provided by Great Southern, my accountant, my financial adviser, ASIC and the ATO for ratifying these schemes. 

Compared to many of you I have lost little, to me though I have lost a lot. My cows converted to shares which a worth jack considering the directors gave themselves bulk lots of shares a month or two ago. My 2007 trees are probably still sitting in pots. Maybe I did go into this for tax breaks as well as investment reasons, but you know that was how it was sold to me.

If there is a time to broadcast our message of disillusionment, then it is now. While the Great Southern debacle is still newsworthy, every journo worth his salt will be looking for a new angle,  we have a chance of putting our collective stance forward and maybe somebody will listen, perhaps even publish a report to show we were duped.


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## slim pickins (27 May 2009)

shadow makes some very good points.

wooduk.... i think you are ontot a winner here but its really to early to tell at this stage if its the rigt things to do. it all depends on what the aministrators decide to do. we cant gear up for a fight if we dont have anyone to fight with.

the administrators and creditors may decide to avoid legal aciton in the future and play by the rules.

they might just decide to sell the management rigths to someone, in which case we are ok. land leased by GTP could be a problem but those trees will just be cleared and money disbured to relevant MIS owners. but its a mess because the leased lanfd might contain trees that need to be cleared not now but in 4 years time.

co-operatives are compicated as someone pointed out... they require golssy brochuers etc. the best bet is to open a company. PTY LTD and run it like a dictatorship. one CEO makes the decisions. this company has to manage the trees thats it.

it doesnt really matter who owns the land so long as the lease is valid. i mean if i rent my house out and i go bankrupt ad a bank takes my house .. what happens to the perosn living in the house......as i far as i know the renter stays there for the duration of the lease.

if land becomes available at bargain prices then go ahead and buy as much of it as you can.. in a cooperative, individual company or otherwise.


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## Judd (27 May 2009)

slim pickins said:


> .....i mean if i rent my house out and i go bankrupt ad a bank takes my house .. what happens to the perosn living in the house......as i far as i know the renter stays there for the duration of the lease......




Nope.  The new owner of the house, ie the bank, can kick the tenant out - usually 10 days notice is given - even if the tenant is not behind with the rent.  Happens all the time.

See following Links - mainly relates to NSW but similar situations apply in the other States and Territories

http://sylviahale.org.au/news/greens-move-to-protect-tenants-when-landlord-defaults

http://www.fairtrading.nsw.gov.au/A...ancy/ftr39movingoutinformationforrenters.html


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## slim pickins (27 May 2009)

Judd said:


> Nope.  The new owner of the house, ie the bank, can kick the tenant out - usually 10 days notice is given - even if the tenant is not behind with the rent.  Happens all the time.
> 
> See following Links - mainly relates to NSW but similar situations apply in the other States and Territories
> 
> ...




well well.... it does seem like the lease is terminated. oh dear..... its game over im afraid. looks like there might be massive tree fire sale. they'll probably cut all the trees down and sell them or give them to us. they will have to give us our trees but what we will do with them is another matter. 

those unable to store or claim their trees are finished. oh dear.....

it could be the case that everyone affected may have to pay tax for the years that they were able to claim the deductions. this could bankrupt a lot of people. 

we might have a chance if we are credtors... btu i doubt it... we are unsecured creditors and we'll get nothing.

someone please correct me if i am worng here!


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## Julia (27 May 2009)

slim pickins said:


> it could be the case that everyone affected may have to pay tax for the years that they were able to claim the deductions. this could bankrupt a lot of people.
> 
> 
> 
> someone please correct me if i am worng here!



I don't believe for a moment that you would have to pay tax for the years that deductions were claimed.  It was, as far as I know, a legitimate scheme at the time and it would be beyond any reason to take a retrospective approach to any changed legislation.

Good luck to all of you.  I'm really sorry this has happened.
I owned shares for quite some time a few years back when everything was going well, but don't know much about the tree etc investments.


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## slim pickins (27 May 2009)

well if the market is going to be flooded with woodchip this year.... what impact does that have on woodchip futures? 

should we short woodchip futures? does anyone sell woodchip futures?

thats probably the only way to make money on this.


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## slim pickins (27 May 2009)

i've jsut had that sinking feeling when you know you have been checkmated.

the first thing the creditors will do is get of of the trees to make the land available for sale. 

we need somone to represent our intersets and organise the cutting,  collection and sale of trees.

we need someone who can buy the trees. a paper or paper tissue manufacturer? a wholesaler? somehting can be salaveged out of this.... but not much. 25% of the original investment if we're lucky.

we have to approach the administrator to organise this.... otherwise pray for a firestorm to sweep across all of GTP owned land in the next week.


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## Judd (27 May 2009)

I really feel for the investors in the schemes if this little number holds true (an extract from today's Australian concerning Bendigo and Adelaide Bank.)  Nasty, nasty situation.

http://www.theaustralian.news.com.au/business/story/0,28124,25542964-5012439,00.html



> It said the loans were full recourse to each individual borrower. What it didn't spell out was that the loans are secured by woodlots, and if it can't get all of its money through a sale of the plantation trees or woodlots, it faces the messy and risky task of having to chase down each investor and get them to repay their loans individually. In some cases, this could mean the bank going after their homes.


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## bv2726 (27 May 2009)

slim pickins said:


> i've jsut had that sinking feeling when you know you have been checkmated.
> 
> the first thing the creditors will do is get of of the trees to make the land available for sale.
> 
> ...





Does anyone have a link for the podcast from the creditors meeting today? I had to leave the webcast at 12:30pm - there were questions starting to be asked (from creditors) that talked about some of the items mentioned above. (I think, but cant confirm as I need to find a podcast)...


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## HmfryBBearMarket (27 May 2009)

http://www.thomson-webcast.net/au/d...ad&portal_id=4a17ed2d93bb1731ad32f13eff5cfdce

FYI

Cheers


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## HmfryBBearMarket (27 May 2009)

Hi,

I have $90,000 in the 2006&2007 beef, $18,000 in 2005 trees, and $23,000 in Diversified olives 2007.

All funded by GS (now Bendigo) with $125,000 odd still owing.

My repayments will go P&I in November 2009 where my repayments will go up to $4,300 per month.

And no prospect of any cash or debt relief from anyone.

Where's our bail out from Kevin Rudd people!

Nice1


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## Belrose (27 May 2009)

Did anyone attend the first creditors meeting?  I watched the webcast (well most of it, missed the first little bit but will log in later this afternoon and catch up) and thought there were some very astute questions asked.

The link if anyone else wants to watch the webcast is http://www.thomson-webcast.net/au/d...ad&portal_id=4a17ed2d93bb1731ad32f13eff5cfdce


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## The Shadow (27 May 2009)

Hi there,

I attended the Creditors meeting today.

Very disappointed with the turn out. Way more people attended the Timbercorp meeting thna the GS meeting.

The Administrators for GS are far more professional than those of TIM.

Still there are alot of unanswered questions. The Admin did however state that it is the R/E that is in Recievership and not the individual projects. Each project will be looked at individually on its merits. I firmly believe that a good number of these projects should be okay....barring some financial contribution from the growers to fund a new R/E.

There howere still exists a real concern that the Admin should not be acting as the R/E in this matter. They clearly do not have the growers best interest at heart (as per TIM case). This in my veiw is a clear conflict of interest and needs to be dealt with.

I am advocating that all investors write/fax/email the Receivers pointing out this conflict of interest and tell them that they must resolve the conflict before taking any further action.  Also advise them that you will hold them personally responsible for any losses incurred as a grower due to this conflict.

then

Write/fax/email A.S.I.C. pointing out that the Receivers have a conflict of interest and that A.S.I.C. must take immediate steps to resolve the conflict & protect Growers interests.

then

Write/fax/email the Administrators reminding them that they must be totally mindful of Growers interests & that they must take all steps to ensure that returns to Growers are maximized & that they will be held personally responsible if they don’t.

When contacting the Receivers & Administrators show the Grower number that was allocated for the first investment: Gxxxxx.  If you don’t know it phone Great Southern on 1800 258 348, & ask them to provide it.  (They are still there to provide the investor services.)

I am also currently putting together a list of questions to the Reciever to address. Some of these questions include:

the status of the Maintenace Reserve Funds on each project which includes amounts held, on which projects and how can these funds be accessed?

I have a series of other questions, but if you would like me to add any to my list i am happy to do so and i will share the responses with you all.

Shadow.


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## ThePav (27 May 2009)

The lease can not be terminated that easily. There is nothing to be worried about from the schemes in this respect. There is plenty of precendce to comfirm this (Primal Yield for instance)

Like I mentioned before the key to security is to determine who the RE is. This can be achieved by a vote of scheme members with a 50% majority. If you are a member of a scheme they have to provide you a list of other members if you request one.


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## edliw (27 May 2009)

anyone get any information on the web site being set up for the MIS investors. Out of 43000 investors, if we can bring enough together, at $100.00 per head won't take long to have a good fighting fund. Then need to find a sharp legal rep


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## Forenth (28 May 2009)

slim pickins said:


> well well.... it does seem like the lease is terminated.




The examples were for residential leases, are agricultural leases different? Its one thing to end a lease for a flat but surely it must be different for a farmer who leases land and plants crops that take time to reach harvest. Could you really kick him out near harvest and seize the crop, and therefore his investment, without him having some recourse?


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## The Shadow (28 May 2009)

Forenth said:


> The examples were for residential leases, are agricultural leases different? Its one thing to end a lease for a flat but surely it must be different for a farmer who leases land and plants crops that take time to reach harvest. Could you really kick him out near harvest and seize the crop, and therefore his investment, without him having some recourse?





There has been alot of talk about the ownership factor in relation to the Lease & Management Agreements that Growers hold. 

It is my understanding that the Leases or Sub leases are what has been called Perpetuity Leases - that is they expire when the crop matures. I believe that this is not a fixed period.

The other aspect that i think people have forgoten is that if GS owned the land it leased it to the growers - it was paying itslef an annual lease rental offset by the 5.5% net harvest proceeds at the end of the project. In the case where land was leased from a Farmer, GS issued Sub leases to the Growers. GS maintained the lease payments to the farmer and offset this for a 5.5% Net harvest proceeds return.

If GS is not around to pay the leases...then who will pay it? This has in my view the potential to trigger a default under the lease and the land owner gets the lot??

Therefore consideration needs to be given to clarifying these points so growers fully understand the ramifications and implications attached to their investment.

Shadow.


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## slim pickins (28 May 2009)

The Shadow said:


> There has been alot of talk about the ownership factor in relation to the Lease & Management Agreements that Growers hold.
> 
> It is my understanding that the Leases or Sub leases are what has been called Perpetuity Leases - that is they expire when the crop matures. I believe that this is not a fixed period.
> 
> ...




ahhhh... let me translate for everyone here.... this in legal language means... "we dont have a clue!" 

but jokes aside... we really dont know... it all depends on the agreement they have with the bank and the relavant legistaliton dealing with long term agriculatural leases.

lots of law is common sense. you cant rent a house otu for a dollar to someone and then use the hosue as security as its essentially worthless. so a creditor has to get access to the land. 

agriculture is different. but not that different .... crops grow for a few months and they're done. this really is a strange situation. especially since we dont know what the finance agreement looks like. im drawing blank on the legislation as well. 

this is the sort of stuff that gets to the high court. is there a provision that protects the growers in case of GTP bankruptcy. if there was would banks have given 800 mill to these fools. probably not. would GTP directrs have had the foresight and good intentions to look after our interests.... ha! i think not. 

so i still think we are doomed in absence of more information. if there is no lease protection in place..... then 25% of intital investment at best, is what we'll see. if there is!... she'll be right mate!


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## KJL (28 May 2009)

Couple of issues

1. Edliw:


edliw said:


> anyone get any information on the web site being set up for the MIS investors. Out of 43000 investors, if we can bring enough together, at $100.00 per head won't take long to have a good fighting fund. Then need to find a sharp legal rep




Sydney firm Slater & Gordon are looking at the merits of a class action case, then potentially seeking assistance from a litigation funder - ie someone who pays for or funds the litigation in return for a slice of any recoveries.  If anyone's interested the S&G site to register on is: http://www.slatergordon.com.au/contactus.aspx

2. Did anyone else borrow from GS, only to have loans "transferred" to Bendigo last month (ie when GS knew they were going down the pan)? 

I've written to ASIC and to Senator Sherry asking that this aspect be reviewed - ie the loans are sold on for 38c in the dollar, and we mug investors have to repay the loans for the next 10 yrs without any income to do so?

If you have been so treated, then I encourage you to write to your senator, MP, ASIC and newspaper because this is a rort if ever I saw one. 

Kev


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## The Shadow (28 May 2009)

KJL said:


> Couple of issues
> 
> 
> 2. Did anyone else borrow from GS, only to have loans "transferred" to Bendigo last month (ie when GS knew they were going down the pan)?
> ...




Kev,

I too have a couple of GS loans now with Adelaide and Bendigo Bank.

The additional problem we are now also facing is that these jokers are looking to enforce significant breakcost/payout penalties.....can you believe it!

I have had my loan agreements reviewed and there is nothing mentioned about breakcosts or payout penalties or the method of calculating these. In fact at the time i invested I was told quite categorically by the GS Representatives and GS Employees that there are no payout penalties and I could payout any time!!

In fact a few of my freinds paid out their loans about 6-8 months ago without these excessive costs.

I have written to the Adel/Bendigo Bank advising them that I will seek legal action and informing them of the precedence they have set with my friends loans.

I am yet to get a response......funny that.

Shadow.


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## brty (28 May 2009)

The Shadow,



> I have had my loan agreements reviewed and there is nothing mentioned about breakcosts or payout penalties or the method of calculating these




Why don't you just ask them to point out in your contract where it says they can charge you. If it is not there, they are likely to back down quickly. If they don't, the banking ombudsman would become very interested very quickly.

brty


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## KJL (28 May 2009)

The Shadow said:


> I too have a couple of GS loans now with Adelaide and Bendigo Bank...
> 
> ...I have written to the Adel/Bendigo Bank advising them that I will seek legal action and informing them of the precedence they have set with my friends loans.
> 
> ...




Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action. 

One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.  

So getting any break costs back from you should be the leats of Bendigo's worries!

I think this as an issue needs greater exposure just in itself. Otherwise, we'll be paying a lump sum for jack squat.


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## Forenth (28 May 2009)

KJL said:


> I've written to ASIC and to Senator Sherry asking that this aspect be reviewed - ie the loans are sold on for 38c in the dollar, and we mug investors have to repay the loans for the next 10 yrs without any income to do so?
> 
> If you have been so treated, then I encourage you to write to your senator, MP, ASIC and newspaper because this is a rort if ever I saw one.
> 
> Kev




I wrote to all of the above about project transform and the 'majority yes we take the no voters as well' problems, as well as the complete ripoff of the offer being made. I wrote to some of them several times, as well as current affairs shows, all the major capital newspapers etc and I got exactly NO responses and there was NO coverage. This was back in October / November.

I warned of all the financial probs it would cause investors and even mentioned an HIH - like devastation.

Try contacting them but they all put their heads in the sand months ago.


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## KJL (28 May 2009)

Forenth said:


> I wrote to all of the above about project transform and the 'majority yes we take the no voters as well' problems, as well as the complete ripoff of the offer being made. I wrote to some of them several times, as well as current affairs shows, all the major capital newspapers etc and I got exactly NO responses and there was NO coverage. This was back in October / November.
> 
> I warned of all the financial probs it would cause investors and even mentioned an HIH - like devastation.
> 
> Try contacting them but they all put their heads in the sand months ago.




Forenth - don't lose hope! Project Transform was (as I undertstand it) an attempt by GS to trade themselves out of trouble, and in such circumstances there is a limit ASIC could do about a company doing its own thing. 

I acknowledge you've been proved right though. 

But the issue now is that GS is now likely to go under, indeed liquidation is one of the only 3 possible outcomes of an administration, the other two being a DOCA or (God forbid) handing the entity back to management. Now the receivers are involved, my view is that DOCA or a return to management is not likely, and the liquidator (if GS do go under) has various powers to wind back transactions.  So all is not lost yet. 

But we can and should keep the heat up on this!

Kev


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## Johnathon123 (29 May 2009)

KJL said:


> Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action.
> 
> One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.
> 
> ...





I have been down this road with Adeliade Bendigo bank - There customer service was horrific. I was origonally told there would be no break costs. I then set about arranging alternative finance and three days later was told I would have a break fee of about 10% of the loan value. 

Apparently the contract provides:

4.4   Early  repayment

      Early repayment of the Principal Sum may not take place except as permitted by the Lender, and the Borrower acknowledges that the Lender may charge the Borrower its costs and expenses (including any break fees or break costs for which the Lender may be liable however arising) and an administration fee connected with early repayment.


I asked them for a breakdown of the break fee and was not provided any meaningful response

I have now received 6 different break costs all of which are different (even when provided on the same day through different channels)

My next solution is to stop payments and at least force someone with authority to talk to me. Anyone had any luck here?????

On the issue of transferring to Adelaide Bendigo it would seem that the contract allows for this where it says 

The lender may at any time assign or otherwise transferall or any of its rights, and may transfer any or all of its obligations under this document (including the benefit of a charge) etc etc


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## drsmith (29 May 2009)

The segment of Chairmans Address from the webcast of the creditors meeting (from about 59 minutes to about 72 minutes, including the flow charts) is what I would regard as worthwhile viewing for MIS holders.

This covers the relationship between the MIS investments and the RE and how individual MIS viability will be assessed.


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## KJL (29 May 2009)

Johnathon123 said:


> On the issue of transferring to Adelaide Bendigo it would seem that the contract allows for this where it says
> 
> The lender may at any time assign or otherwise transferall or any of its rights, and may transfer any or all of its obligations under this document (including the benefit of a charge) etc etc




Jonathan 

The issue here is WHEN did this occur. Just because the provision exists in the contract does not mean it was validly exercised. If GSFPL were insolvent when the transfer occurred (and it is not public knowledge when this transfer date was but current best estimates say that it was sometime in April 09) then that transfer may not have been valid and can be unwound. 

It wouldn't be appropriate to disclose my legal advice too early, but there is also an argument to say that investors may be able to simply stop paying (ie cancel your direct debits). I'll keep you posted and might be able suggest the same law firm if it anyone else is interested in that path.  

The way I see it, a few hundred $$$ in legals is worth gambling rather than re-paying loans for 10 yrs and getting nothing in return. However, I should emphasise that this is NOT legal advice, nor is it a path I advice you take without seeking your own independent legal advice. 

Good luck all.


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## SDE (30 May 2009)

KJL said:


> Shadow - Bendigo WILL be nervous. S&G, the Sydney firm I referred to, presented to a group of investors at my financial adviser last week in relation to a potential class action.
> 
> One avenue being explored was as to the validity of the transfer of these loans to Bendigo, and whether there was any ground to challenge that we had to pay anything at all - ie should Bendigo be allowed to have the loans flicked to them just before GS goes into administration, then seek to claim 100c in the $.
> 
> ...




I think you are missing the point.

A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership. 

Default to either will be pursued, with the seizure of the debtor's other assets, including homes, likely.

Default at your own peril


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## Johnathon123 (1 June 2009)

SDE said:


> I think you are missing the point.
> 
> A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership.
> 
> ...




Isnt the other issue that the loans are all secured against the trees. Adelaide/Bendigo bank stand to own a great swag of the MIS investment. What is the value of those trees for the purpose of any guarantee they may seek to enforce against the borrowers. DO they have to wait for the loss to be realised once the trees are harvested and they have a $$ value or can they attach a nominal valuation to them today if we default under the loan agreement.

It looks messy and I agree with the general theme of the thread if we default Adelaide and Bendigo Bank are not going to go quietly into the sunset however a good lawyer might be able to find away around this. 

I am not advocating either course nor giving legal advice just seeing both sides of the coin on this one.


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## bv2726 (1 June 2009)

Johnathon123 said:


> Isnt the other issue that the loans are all secured against the trees.




Dont forget the cattle investors. Some have debts that they took out to buy cattle, which were seized and swapped into shares, which are now worthless and most likely will remain worthless. So in this situation, some folks would be paying off debt to the bank for one reason - to maintain their credit rating/assets...


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## Johnathon123 (1 June 2009)

bv2726 said:


> Dont forget the cattle investors. ...




Yes you are right - Often find it difficult to see the wood for the trees
I think that situation with "transform" is outrageous


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## Johnathon123 (1 June 2009)

My "advisor" keeps pointing me to "The Managed Investments Act"

Has anyone else had a look at this one

http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/E5DC53FA3909BCECCA256F7100522C95/$file/ManInv98.pdf


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## SDE (1 June 2009)

Johnathon123 said:


> My "advisor" keeps pointing me to "The Managed Investments Act"
> 
> Has anyone else had a look at this one
> 
> http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/E5DC53FA3909BCECCA256F7100522C95/$file/ManInv98.pdf




The Act that you "advisor" refers to has been consolidated into the Corporations Act. 

This occurred in 2001! 

Your "advisor" is well behind the times. (and probably still thinks that MIS investments are great)


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## edliw (1 June 2009)

Rumour management buy out.

Moves for a Co-Op buy out could upset them and has, if interested contact

townshend@immm.com.au

Pass it onto any one you know that is involved in GTP & MIS


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## KJL (1 June 2009)

SDE said:


> I think you are missing the point.
> 
> A debt is a debt, whether it is owed to a Bank, or is owed to a company in receivership.
> 
> ...




Yep, SDE, a debt is a debt, but not if it's ultimately judged to never have been a valid debt in the first place. For example, if we MIS investors had acted in reliance on representations by GS that were incorrect (eg, projected yields, subsidising existing projects with income from future projects) then that loan may be _void ab initio_, ie as if it were never entered into.  

This is a separate point to the issue of to whom the debt is owed. If it's owed to a liquidator then I'd feel more comfortable telling them to get nicked (in return for my 20yrs of zero return) than I would telling Bendigo had it been validly assigned to them prior to GS's insolvency.

Although your reply to Jonathan's FA made me smile and tells me you know what you're talking about 

In short, my position is that there is much to be discovered about this matter, and it may be that all is not as it currently seems.


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## jiml (2 June 2009)

KJL  Is there evidence to back the sale of loans to Bendigo/Adelaide Bank for 38c? Surely, who ever 'owns' the loans must abide by the conditions set out in the original agrement?


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## Johnathon123 (2 June 2009)

jiml said:


> KJL  Is there evidence to back the sale of loans to Bendigo/Adelaide Bank for 38c? Surely, who ever 'owns' the loans must abide by the conditions set out in the original agrement?




Adelaide/Bendigo are denying the acquisition at 38c in the dollar

see: www.crikey.com.au

Will Rayner, Head of Investor Relations, Bendigo and Adelaide Bank Limited, writes: Re. “Bendigo and Adelaide should come clean on MIS” (yesterday, item 26). In response to your article we make the following points…

Bendigo and Adelaide Bank has lent to more than 8000 individual credit-worthy borrowers who have subsequently invested in Great Southern MIS schemes. We continue to work with our customers to deliver the best outcome for all parties. We are closely monitoring the performance of each loan, and are in the process of contacting each customer to discuss their loan and their options going forwards. As per normal practice, provisions and write-offs are calculated on a loan-by-loan basis. We will continue to manage this portfolio in a similar manner. 
While we remain vigilant about the performance of these loans, we are ultimately comfortable with our position, and have not revised our market guidance as a result of these developments. 
The statement released to the ASX by Bendigo and Adelaide Bank on May 26, 2009 includes the customers and exposures outlined in the separate announcement by Adelaide Managed Funds. 
APRA’s decision not to support the proposed purchase of the Asset Backed Yield trust was in no way related to these issues. 
*Contrary to recent media reports, neither Bendigo and Adelaide Bank, nor any of its related parties have recently bought any portfolio of loans from Great Southern at a discount (such as the $0.38 cents figure that has been quoted). * (bold added)
We would appreciate if these facts could be reported.


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## The Shadow (2 June 2009)

Dear all,

This is an extract from a recent Research report on GS and the potential impact on Investors:-



> When determining the viability of each MIS forestry project, consideration needs to be given to both the term to maturity, and the amount of fees outstanding. This will determine the amount, if any, of additional funds required to manage the project to maturity.
> 
> As MIS investors in the 1998 to 2007 pulpwood projects and high value timber projects do not own the underlying land, they will be reliant on their leases to secure their investments over the interests of the landowner and any mortgages registered on title. Should there be ongoing lease payments required for these properties, there is a risk that GSMAL will not be able to meet the lease payments, as most of GSMAL’s remuneration for these projects is deferred and payable out of harvest proceeds. As a result, there is a risk that these leases may be terminated or that investors may be required to make additional contributions.


----------



## wooduk (2 June 2009)

Johnathon123 said:


> Adelaide/Bendigo are denying the acquisition at 38c in the dollar
> 
> see: www.crikey.com.au
> 
> ...




But does not the Bendigo Adelaide blank have a Trust fund that is a subsidary to what was the Adelaide bank as I can not confirm but there was a noise in the earlier media reports that an extra $charge would be iniatated by this other entity of Adelaide Bendigo,,,,needs to be confirmed


----------



## edliw (2 June 2009)

Re Bendigo Adelaide Bank.

ASX announcment on

08/04/2009   Company Update and TREES Coupons  4  PDF  

This has been changed, it's not what was originally posted. Very strange.


----------



## pist'n broke (2 June 2009)

edliw said:


> Re Bendigo Adelaide Bank.
> 
> ASX announcment on
> 
> ...




I have downloaded and saved this document on 24/04/2009.
Looks exactly identical to the one on the ASX website today.


----------



## moreld (3 June 2009)

I downloaded it on 8th April and it looks identical to me as well. 
Not sure about ASX releases, but I now in the US that any changes have to be made with amendment filings, which are flagged with an A. Changing announcements is highly unlikely to be allowed.


----------



## wooduk (3 June 2009)

This will give you a warm fuzzy feeling!,and I know there are advisers out there  that don't know of this.

--------------------------------------------------------------------------------

From: Adviser Services 
Sent: Friday, 29 May 2009 5:27 PM
Subject: GSFM Management Buyout Adviser Teleconference Summary







Great Southern Funds Management Ltd (GSFM) held a teleconference on 29 May 2009 to provide Advisers with an update on the negotiations with the Receivers of Great Southern Limited (GSL), McGrath Nicol, regarding a management buyout of GSFM.



If you were able to attend we hope that it provided you with sufficient information to communicate with your clients. To recap, and for those unable to attend, below is a summary of the points discussed on the conference call.



·         As previously advised, the Directors of Great Southern Limited (GSL) placed GSL in Voluntary Administration (VA). Ferrier Hodgson were appointed as Administrators on 16 May 2009.

·         GSFM and the entities that it manages remain solvent and are continuing to operate as normal.

·         The Receivers have gathered significant information from GSFM over the past week and are now beginning to understand the business. In particular the Receivers are aware of the significant outlays that they will be required to make in the coming months for the Almond Projects; 

·         The Receivers have advised that they must advertise the GSFM business to comply with their duties under the Corporations Act. The business will be advertised next week and an Information Memorandum prepared immediately;

·         A timeline for the sale process is not yet known however GSFM management anticipates it will take between 2 to 3 months;

·         GSFM management regard this step as a positive sign that the Receivers are not seeking to wind up the business or the Funds it manages as this process would not realise the maximum value for the financiers. Likewise the Receivers are aware of the consequences of this action for the underlying investors and are keen to maintain the reputation of their clients;

·         During this sale process the Funds will all continue to trade. GSFM Directors will closely monitor operations and solvency. Solvency is not expected to be an issue with any of the Funds during this sales process. All Funds and AF06 have sufficient capital to trade during this period;  

·         RFM RiverBank has a large exposure to GSMAL through the leases over properties at Hillston. GSFM management has made an offer to the Receiver regarding this which would reduce counterparty risk;

·         Importantly it does not appear that the business will be wound up. The Receivers are looking to see if the management offer reflects the market price. Management is confident that it does;

·         GSFM will send a letter to investors which details how their investment may be affected through the process. A copy of this will be sent to you before it is mailed to your client.


----------



## SDE (5 June 2009)

KJL said:


> Yep, SDE, a debt is a debt, but not if it's ultimately judged to never have been a valid debt in the first place. For example, if we MIS investors had acted in reliance on representations by GS that were incorrect (eg, projected yields, subsidising existing projects with income from future projects) then that loan may be _void ab initio_, ie as if it were never entered into.
> 
> This is a separate point to the issue of to whom the debt is owed. If it's owed to a liquidator then I'd feel more comfortable telling them to get nicked (in return for my 20yrs of zero return) than I would telling Bendigo had it been validly assigned to them prior to GS's insolvency.
> 
> ...




Hi KJL

Just got my information bulletin from G&S

You may be right. 

One approach suggested by G&S may have loans ex GSF forgiven, even if they have been on sold to BEN. Advice is NOT to default at this stage.

KPMG are also in the firing line for their assistance in Project Transform.

And let's not forget the advisors, without whose help, no one would have  been able to invest in any of GS's MIS projects.

So fingers crossed. The MIS investor may get something back after all.


----------



## Learningman (5 June 2009)

I agree with SDE ... NOT to default.

We have paid 85% of the damn loans off . So now seeking legal advice on next steps.


----------



## Judd (6 June 2009)

And some thought it was the Bendigo and Adelaide Bank.  Nice work if you can get it.

http://www.theaustralian.news.com.au/story/0,25197,25594836-601,00.html




> *Director John Young in Great Southern debt deal*
> 
> Adele Ferguson and Anthony Klan | June 06, 2009
> Article from:  The Australian
> ...


----------



## Learningman (6 June 2009)

What the ???? Does anyone get it ???

How does one know if our loans were part of this scam ???

The more I read the more I don't want to know. The whole thing is making me sick ...

Anyone looking to sue their financial planner for advice ?


----------



## SDE (6 June 2009)

Learningman said:


> What the ???? Does anyone get it ???
> 
> How does one know if our loans were part of this scam ???
> 
> ...




My financial planner is in between the crosshairs. Just waiting to get a bit closer before pulling the trigger!


----------



## jiml (7 June 2009)

Well at least we know (thanks to the Australian) where the 38 cents fits in.  In respect to the sale I would have thought that unless the directors had entered an open bidding process to sell the loans on the open the market as against a deal with a mate they may be liable for failing to meet their fiduciary duty to the shareholders. Further, it would appear a 'management buyout' of GSM is on the cards, fascinating is it not that the people who sent GTP broke may possibly purchase its only viable asset....


----------



## david001 (7 June 2009)

New member here...been following thread since early '09...have 6-figure investment in '04 and '05 trees...tipped into this investment by accountant of many years who said "I cannot give financial advice...meet Mr. X financial advisor and he will look after you!"...sales pitch was along the line of triple your money, the paper-less office is a myth, you don't want to chop trees down in the forest do you? Commissions were disclosed but I simply didn't know what was the norm, ie 2%, 3%, 85% commis, 10% didn't ring any warning bells (will forever onwards though!!!)...I have spoken with John Lawrence in Tasmania, and Fred Gulson of Dennis and Co earlier in the year when I first smelt a rat...currently disputing investment in Great Southern through Financial Ombudsman Service for inadequate Statement of Advice among other things, and intentionally witheld direct debit for end of month payment for May...Bendigo called me at work Friday so they work quickly...obtaining legal advice but one would have to question Bendigo's resources to chase 8000-odd people for payments, plus the remainder of the 43 000-odd quoted in the papers...I tend to agree with KJL, if tipped into something based on un-realistic yields (and a Ponzi-like structure) how is the buyer to be aware???...Surely like me, in my line of work, these guys have Professional Indemnity insurance (if you can call these accountants/advisers professional) and lawyers if you can afford them should be used...I flew to Melbourne for the first Creditor's  Meeting, very interesting indeed!...I will be asking my lawyer to contact Dennis and Co and discuss in legal-speak where they are at with a Class action...as KJL said, a few hundred bucks might be worth it if the total voice saves us significantly more.
I have PDF's of the '04 and '05 Product Disclosure Statements if anyone needs them...I just thought I would join the Forum...respond in sympathy or flame me...I just thought I had better be in it to win it, or lose it.


----------



## wooduk (7 June 2009)

david001 said:


> I have PDF's of the '04 and '05 Product Disclosure Statements if anyone needs them...I just thought I would join the Forum...respond in sympathy or flame me...I just thought I had better be in it to win it, or lose it.




Welcome aboard a group of people who in varying degrees are financially screwed.Read prior stuff,even my brain hurtz remembering the itrigue that has got us thus far.

Options?,I am sure there are not too many legally.

At the end of the day,this rort or tort needs to be purged and made retrospective asap


Meantime it does not stimulate me to spend 800 here,260 here,1000 here and for what?, to get a partial  judgement

One option to bring this to ahead is everybody hook up and collectively refuse to pay any money to any entity


----------



## bongcso (7 June 2009)

Thanks Judd for alerting us on the story in the Australian. With each passing day, my hopes for getting our money back diminishes...


----------



## wooduk (8 June 2009)

Timbercorp shines light on MIS investor protectionRuth Williams
June 8, 2009 
Page 1 of 2 Single page view
.REVELATIONS that a Timbercorp company charged with protecting the interests of investors has no money and is "hopelessly insolvent" have thrown the spotlight on how managed investments are regulated, and prompted calls for more protection for investors.

KordaMentha, the administrator of collapsed managed investment scheme operator Timbercorp, this week concluded that Timbercorp Securities, the "responsible entity" for the company's dozens of MIS projects, was insolvent.

Accounts filed with the Australian Securities and Investments Commission show that Timbercorp Securities suffered a drastic dwindling of cash in its last full financial year ”” from $2.15 million in 2007, to just $158,000 by September 30, 2008, although its total reported assets remained almost static. It now has no money, no access to money, and no staff, according to KordaMentha.

Up to 10,000 growers could now lose any claim on their almond and olive Timbercorp investments if the schemes ”” which need more than $300 million to keep operating for another year ”” are wound up.

The Timbercorp situation has highlighted what some argue are deep-seated problems with how managed investments ”” which include agribusiness-based schemes, mortgage trusts, property syndicates and a host of other "pooled" investments ”” are regulated.

On Thursday night, Tony D'Aloisio, chairman of the Australian Securities and Investments Commission, explained that the sector ”” estimated to manage about $350 billion worth of investors' funds ”” involved a "high level of self-regulation". MIS products must be registered with ASIC, and the responsible entity must be licensed, but there was no assessment of the "merit" of the offer, he said.

"The basic philosophy behind (MIS regulation), similar to a number of areas, was to leave it to the market with oversight and market conduct supervision from ASIC," Mr D'Aloisio said.

"ASIC's role is that we have functions of licensing REs, and we register the schemes. We don't actually vet or approve it. We are monitoring ongoing disclosure but there's no requirement that product disclosure statements be filed with ASIC."

The current system rests on the role of the so-called "responsible entity" ”” the entity charged with managing the scheme and, importantly, with protecting investors' interests. Under this system, the investment manager ”” Timbercorp for example ”” appoints a responsible entity. Previously, an independent trustee company was charged with acting on behalf of investors ”” a situation that still exists with superannuation and debentures.

"The problem was that (before the laws were changed) investors didn't know who to sue," said Owen Lennie, an associate professor at Melbourne University.

"Should they sue the trustee or the manager? The idea was that it would make these things quicker and easier, but it was also about the big fund managers saying they were too big to need a trustee."

Mr Lennie is assisting financial advisory groups that have been working to protect clients' investments in the wake of Timbercorp's collapse.

"Since 1999, we have had good economic conditions and rising property prices. This is the first time in the economic cycle that this structure has been put to the test and it hasn't worked."

Mr Lennie advocated a return to the trustee system, arguing the use of responsible entities created conflicts of interest. While trustees only had one function, the responsible entity owned the land, operated the scheme and was also supposed to serve investors' interests. Also, as with Timbercorp, the entity was often run by the same people running the parent company. Continued…
If the company collapsed, the administrators were faced with the dual, potentially contradictory role of pursing the best possible returns for creditors, while protecting investors' interests as administrators of the responsible entity.

Ian Ramsay, corporate law professor at Melbourne University, said the laws were changed because trustees were "falling down on the job". He didn't think returning to trustees was the solution ”” but adds that "no one suggests there aren't problems".

He said that one of the most significant problems was that investors in managed investments did not get the same protections as shareholders in companies. "There's all sorts of legal remedies in the Corporations Act that shareholders get that investors in managed investments don't get," he said.

Professor Ramsay said the set-up of the investments was often complex, leading to problems with disclosure. There was often a "blurring of lines" about what exactly the investor was buying.

"Rampant" charging of high commissions, and the "complicating" factor of tax incentives were other issues.

Professor Ramsay said there was "probably a strong argument" to increase the legal protections for investors, and review the regulations.

"This is an area that moves quickly, there has been quite a lot of change," he said. "Given that these are an important part of the investment scene, and because they cover such a broad range of things, I think it's probably time for a systemic review of the protections that are given to investors."

Last week, then corporate law minister Nick Sherry would not be drawn on the issue of responsible entities, saying he would "assess the outcomes" of a parliamentary committee inquiry into agribusiness MIS, chaired by Labor's Bernie Ripoll.

The inquiry's terms of reference include the need for legislative or regulatory change. "We will be looking at all of that," Senator Ripoll said.

Submissions close on June 26.


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## Learningman (8 June 2009)

david001 said:


> New member here...been following thread since early '09...have 6-figure investment in '04 and '05 trees...tipped into this investment by accountant of many years who said "I cannot give financial advice...meet Mr. X financial advisor and he will look after you!"...sales pitch was along the line of triple your money, the paper-less office is a myth, you don't want to chop trees down in the forest do you? Commissions were disclosed but I simply didn't know what was the norm, ie 2%, 3%, 85% commis, 10% didn't ring any warning bells (will forever onwards though!!!)...I have spoken with John Lawrence in Tasmania, and Fred Gulson of Dennis and Co earlier in the year when I first smelt a rat...currently disputing investment in Great Southern through Financial Ombudsman Service for inadequate Statement of Advice among other things, and intentionally witheld direct debit for end of month payment for May...Bendigo called me at work Friday so they work quickly...obtaining legal advice but one would have to question Bendigo's resources to chase 8000-odd people for payments, plus the remainder of the 43 000-odd quoted in the papers...I tend to agree with KJL, if tipped into something based on un-realistic yields (and a Ponzi-like structure) how is the buyer to be aware???...Surely like me, in my line of work, these guys have Professional Indemnity insurance (if you can call these accountants/advisers professional) and lawyers if you can afford them should be used...I flew to Melbourne for the first Creditor's  Meeting, very interesting indeed!...I will be asking my lawyer to contact Dennis and Co and discuss in legal-speak where they are at with a Class action...as KJL said, a few hundred bucks might be worth it if the total voice saves us significantly more.
> I have PDF's of the '04 and '05 Product Disclosure Statements if anyone needs them...I just thought I would join the Forum...respond in sympathy or flame me...I just thought I had better be in it to win it, or lose it.




I have paid 85% of my close to 7 figure investment with Great Southern. So the question I have is .... "What the heck do I do ????"

keeping paying or try and get my money back ????


----------



## Learningman (8 June 2009)

Can anyone recommend a good lawyer to seek legal advice ? I am not sure how to move forward given my situation.

What are others doing ????


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## Portfolio (9 June 2009)

Portfolio said:


> I still don't think GTP will be in the MIS business in 5 years (even timber).  Why?
> For anyone that watched the 4 corners show GTP have been propping up their returns to growers.  However they can only do this for the first plantations as they are really small.
> 
> If you read the annual report you will see that the first growers ACTUALLY lost money after 10 years of investing without the top up.




Read this forum back a few years and you will see some of us predicted this.


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## Judd (10 June 2009)

What a cruel, cruel joke.  Very painful for those who put money into this.

http://business.smh.com.au/business...t-manager-insolvent-report-20090609-c27x.html



> *Great Southern project manager insolvent: report*
> Danny John
> June 10, 2009
> 
> ...


----------



## The Shadow (10 June 2009)

Check this out:-

http://www.afr.com/home/login.aspx?EDP://20090610000031232548&section=industry-primary_industry


Also great article in the Aust Fin Review on Mr Young and Co. It's right on the money. Their days are numbered..................


Shadow.


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## bongcso (10 June 2009)

Judd said:


> What a cruel, cruel joke.  Very painful for those who put money into this.




Yes, tell me about it. We are among the those who will be hardest hit as we invested in the 2007 and 2008 timber schemes. Our trees are just babies and by the time they get around to selling these schemes, our trees would probably be dead from neglect by then. We invested in timber schemes because we wanted some ethical investments in our portfolio - do our bit for global warming. Our plan was to use the money from these investments to travel the world when the trees are harvested in 15-20 years time. I guess maybe we just have to contend ourselves with traveling around Australia in a combi-van in our retirement, sigh.

Christina


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## Bugsy (10 June 2009)

I've spoken to Bendigo & Adelaide bank twice already in the last 4 weeks. I've asked them to provided me with the contracts for my loan which they took over 6 weeks ago. I'm still waiting for them to send me a copy. I guess I'll have to stop making repayments if they can't produce the contracts..


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## david001 (11 June 2009)

Not an endorsement, but I would consider essential viewing Wednesday night's 7.30 Report on Timbercorp and Great Southern.
I cannot hperlink as not enough posts sorry!


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## Forenth (11 June 2009)

The Shadow said:


> Check this out:-
> 
> http://www.afr.com/home/login.aspx?EDP://20090610000031232548&section=industry-primary_industry
> 
> ...




I'm not an AFR subscriber. What's the gist of it? Is there anything more than what The Australian posted?


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## bv2726 (11 June 2009)

david001 said:


> Not an endorsement, but I would consider essential viewing Wednesday night's 7.30 Report on Timbercorp and Great Southern.
> I cannot hperlink as not enough posts sorry!




Missed this - did anyone watch it? can anyone provide a quick summary? It should be interesting.... I wonder if media pressure could change anything?


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## wooduk (11 June 2009)

bv2726 said:


> Missed this - did anyone watch it? can anyone provide a quick summary? It should be interesting.... I wonder if media pressure could change anything?




Go to ABC online,tap in 7.30 report,you will see the replay for MIS plantations,and it also has a written interview on the rort and that government body ASIC and ATO.Also allegations of stand over and bribery corruption.

PLUS a beautiful camera shot of Young


----------



## wooduk (11 June 2009)

Forenth said:


> I'm not an AFR subscriber. What's the gist of it? Is there anything more than what The Australian posted?





Read and weep,all they have done is cut timbercorp and pasted great southern, sloppy journalism,and also plagirism.But it gets better there is another news article of a director resigning after board discussion over young flogging shares and touting GTP is great when it was known that it was in trouble before 1998!

Sorry guys,we now go to plan B,Iam going to talk to townsend,you are welcome to talk to townsend too. Obviously we have our game plans ,IWC,Iam not going duk this and intend to blue them ,but let us play them




smh.com.au Great Southern project manager insolvent: reportDanny John
June 10, 2009 .
THE corporate offshoot charged with running Great Southern's managed investment schemes is insolvent and has no cash available to complete its forestry and horticulture projects.

Investigations undertaken by McGrathNicol, the receivers of the collapsed timber investment company, have indicated that the responsible entity of the Great Southern group will have to be wound up because of its financial position.

Great Southern Managers Australia (GSMA) is understood to have insufficient reserves and no chance of securing additional funds to continue in its role of managing the group's 45 schemes. GSMA was the body with direct responsibility for the schemes that over the past 10 years raised $2.3 billion from 43,000 investors attracted by the tax advantages of the group's managed investment projects.

But Great Southern's slide into administration last month after running up debts of $600 million has left the group's investor growers facing an uncertain future, especially as GSMA is no longer in a position to support their schemes.

Their situation mirrors that of the 18,500 investor growers in the rival managed investment company Timbercorp, which collapsed in late April owing creditors $900 million.

Timbercorp's responsible entity was found to be "hopelessly insolvent" by the administrators, KordaMentha, which estimated that at least $300 million in new capital was required to maintain its 24 almond and olive tree growing schemes.

Both McGrathNicol and Great Southern's administrators, Ferrier Hodgson, are now assessing the financial status of each of its projects to work out which are viable and which have little chance of surviving.

They will eventually fall into three categories: those that can be harvested and even produce a decent return for their investors in line with original forecasts; those that may still be viable with the support of a new and financially strong responsible entity to manage them; those that will have to be wound up.

The oldest of Great Southern's schemes, including its 1998 and 1999 pulpwood forestry operations that are about to be harvested, are the least affected by the company's collapse.

But the prospects of those that followed, and in particular its most recent schemes, is less certain with some investors now having to face up to the fact there is little value left in their horticultural holdings.

The receivers and adminis-trators hope to be in a position over the next three months to give a view about the best outcome for each scheme. However, Great Southern's complex financial structure and the multitude of investment schemes means that it might not be before the end of the year before investor growers get to vote on what should happen to their individual projects.


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## wooduk (11 June 2009)

wooduk said:


> ATTENTION  !!!     GREAT   SOUTHERN   INVESTORS
> IWC – AN INDEPENENT WOODLOT CO-OPEATIVE
> 
> TOWNSHEND PRUDENTIAL PTY.  LTD.  INVITE  WOODLOT OWNERS IN THE GREAT SOUTHERN PROJECTS TO JOIN IN A FARMING CO-OPERATIVE TO EXPLORE THE VARIOUS PROSPECTS OF THE PROTECTION AND MANAGEMENT OF THEIR WOODLOTS.
> ...







IF  ever a time was right,or in fact past the time to get organised and act as one voice collectively it is NOW.

Not to tomorrow,not next week,not next month.This iniated by INVESTORS by and for every grower and investor to register and be pro-activein protecting their OWN interests.So far the response is good,but we need more folks as we as a collective have more clout to deal with the bank.

The alternative is YOU the investor being beholden  to the bank with a bad debt loan that has no end,as it is possible another entity  will have on going costs for THEIR own pockets to line.

Is there a cost to this indepenent woodlot  co-op?

Yes---The cost of buying the land if it needs be,
On going pursuit of legal action(remember this will take years to sort out)
The managing of the Co-op

BUT,these costs as a collective can be minimised by the swell of numbers.

We are the responsible entity,we mange it ---the co-op,we the collective protect the individual investments


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## The Shadow (11 June 2009)

wooduk said:


> Read and weep,all they have done is cut timbercorp and pasted great southern, sloppy journalism,and also plagirism.But it gets better there is another news article of a director resigning after board discussion over young flogging shares and touting GTP is great when it was known that it was in trouble before 1998!
> 
> Wooduk,
> 
> ...


----------



## cathadfab (11 June 2009)

Forenth said:


> I'm not an AFR subscriber. What's the gist of it? Is there anything more than what The Australian posted?




You can sign up for a free 14 day trial and cancel at anytime in the 14 days to avoid charges. 

The gist of the piece is that IMF are alleging that the swap of shares for cattle was illegal for several reasons. They hope to challenge this but need cattle investor's support.

If you are interested in information, they will send out a pack via email or snail mail and their contact numbers are listed on their website at http://www.imf.com.au/contact.asp

Hope this helps someone


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## KJL (11 June 2009)

Learningman said:


> Can anyone recommend a good lawyer to seek legal advice ? I am not sure how to move forward given my situation.
> 
> What are others doing ????




Sorry Learningman - have already taken legal advice with a group of other investors, and part of that legal advice is to currently say "no comment" - I'm not meaning to be obstructive or secretive or dramatic here, just following what I'm told and am paying for (less than one month's interest, to put things in some sort of context), but the approach being taken is not dissimilar to what was discussed in an earlier post. 

Will post additional info if or when I get the all clear to do so. Safe to say that I maintain my view that something fishy has gone on, and I don't want to just sit and take it.  

In particular, I genuinely do feel for you having a 7 figure investment (gulp!)  but without wishing to sound negative, I don't hold out any hope of getting any return at all on my investments - my aim is to mount an argument which means not having to pay the loans, cut my losses and take it as a very expensive and painful lesson, although what I can learn after how they were promoted and rated, I'm still figuring out...

Good luck all.


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## jiml (12 June 2009)

As a shareholder I have done my dough and as my entry into GTP was purely speculative I bear the loss - you win some lose some. The receivers will no doubt sell the assets with a view to recovering as much as they can for secured creditors, to wit the banks. Who buys the land is relatively unimportant if the contracts (between GTP and investors) are held to be  water tight. Just have to find someone to manage and harvest the plantations. Probably OK for timber but if Timbercorp is any indication, the horticultural stuff is valueless. As the new owners will pick up th coppice lot on the second rotation, the land may be more valuable than currently perceived.


----------



## wooduk (12 June 2009)

The Shadow said:


> wooduk said:
> 
> 
> > Read and weep,all they have done is cut timbercorp and pasted great southern, sloppy journalism,and also plagirism.But it gets better there is another news article of a director resigning after board discussion over young flogging shares and touting GTP is great when it was known that it was in trouble before 1998!
> ...


----------



## brty (12 June 2009)

Hi,
Back at post 1126 on page 57 of this thread I stated the following......



> This stock now looks toast.
> 
> Falling below 50 cents is disastrous for the holders of mis units. Plus there is no incentive for anyone to take up new mis schemes.
> 
> ...




That was in September last year. Despite thousands of words since, (and thinking about it I hope ASIC looks up the identity of "Investor1" and his/her input here), nothing has changed except for the above becoming fact rather than proposition. 

Looking back, even if all the schemes had voted yes, there would still be no money to carry on operations, just more assets for sale, mostly still unsold. 
It will be very interesting to see what the courts/administrators unwind in regard to past actions by management, but I don't see much coming back to investors as a result, if anything.

brty


----------



## jiml (12 June 2009)

Yep, BRTY you are (were) spot on.  If I had looked at the cost structure and were aware that only 65% of unit holders' cash was going into the ground and that ATO scare re horticultural/cattle investments was leading to a loss of confidence in the industry and hence reduced investment with a consequence of GTP unable to roll over loans...plus the economic down turn, I would have been out of GTP before you could say 'shake the sauce bottle'


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## Forenth (14 June 2009)

*Townshend Prudential - Scammers?*

I know there are people out there who are going to try to profit from the collapse of GTP. John Young getting them to sell him the $25 million of loans for $9 million just days beforehand is a good example. No putting it out to tender, no offering it to those who took out the loans, just grabbing it off the company books for some profiteering despite being the one largely responsible for the problem in the first place. Would that be insider trading?

Anyhow, I was interested to see what this Townshend Prudential idea of a growers co-op might be about, so I contacted them. I got an email today, 2 emails actually. The first was missing attachments so the second was sent dutifully. When I opened them the first was a 'you must act immediately or you'll lose everything! (Plus a set of steak knives)' Demtel offer designed to provoke panic. Unprofessionally presented, poorly worded, misspelt, poor punctuation and grammer. No letterhead of any kind just a plain page. It could have been written by a 12 year old.

The second attachment labelled "Tax Invoice" again has no letterhead of any kind and is just a form for credit card details. Nothing else.

There was no information about a co-op, nothing included about how it might work, be set up, no questions about what investments of mine are affected or could be included. Only the 'gives us your credit card details'. Not even how much things would cost. It was asking for a blank cheque.

Wooduk, is this a scam? Its SO BADLY PRESENTED AND MISSING EVERY DETAIL that my only thought is its some teenager in his room trying to cash in. I am EXTREMELY unlikely to do anything with this mob if this is the level of their ability, and without any other facts or evidence I warn others to be wary of them as well.


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## moreld (14 June 2009)

I can't find Townsend Prudential Pty Ltd listed as a Victorian business. 
They are not listed in the yellow pages.
They have no website and no link of any credibility on the internet.


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## Ripped Off (14 June 2009)

moreld said:


> I can't find Townsend Prudential Pty Ltd listed as a Victorian business.
> They are not listed in the yellow pages.
> They have no website and no link of any credibility on the internet.




Its *TOWNSHEND PRUDENTIAL PTY LTD*
They do exist but I cant post the links I found.

Townshend & Associates Pty Ltd

Phone: 03 9879 6555

Fax: 03 9879 4466


 I will be ringing Mr Bob Wilson tomorrow to get the facts.

I registered for electronic notification from the administrators, have got nothing so far, only what you can find on their web page.
Information to investors is non existant, can someone list who the class action lawyers are, as well as any other helpful info so we can all pull together.

Another thing that worries me is who is going to end up with the sustaintial
assets (and my Trees) at a bargain price. Hopefully not another GSL insider.
This is like "Insider Trading" but a lot worse, gee.. they hung Rivkin for $300 odd... ????
Corporate thieving B#*tards should go to jail and there assets siezed and returned to the rightful owners.
The Corporations act need changing badly to stop this happening and make Directors Liable for dodgy deals and lining their own pockets.

Nobody is worth 5/600,K a year for pushing paper.

I will be going  Co-op or class action.

Extremely disgruntled 
Paul


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## cheeyeen (14 June 2009)

Not sure it is useful but you can do a search at www.asic.gov.au to see some basic information about the company.  Both TOWNSHEND PRUDENTIAL PTY LTD and TOWNSHEND & ASSOCIATES PTY LTD were registered under different names before.  They both have some charges registered on 10/07/2006.  I must have remembered incorrectly.  I thought I would be able to see the director name or something..


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## Forenth (15 June 2009)

Some more info on Townshend Prudential from www.abr.business.gov.au:

ABN status    From              To 
Active      01 Jul 2000      (current) 

Entity names                                            From               To 
TOWNSHEND PRUDENTIAL PTY LTD            06 Dec 2004    (current) 
CATFISH MULTIMEDIA PTY LTD             19 Mar 2002 06    Dec 2004 
D CAMERON SHOWER SCREENS PTY LTD   01 Jul 2000      19 Mar 2002 

Entity type 
Australian Private Company 

GST status         From             To 
Active          01 Oct 2006     (current) 

Main business locations         From               To 
VIC 3106                       19 Mar 2002      (current) 

Trading name(s)                               From                To 
FORMATION BUSINESS SERVICES     19 Mar 2002    (current) 

Deductible Gift Recipient 
Not entitled to receive tax deductible gifts 

ACN or ARBN: 
082868933  Search ASIC 


Does that really say shower screens? This has previously been a multimedia and shower screen company? No wonder their email was so unimpressive. After dealing with financial advisors and GTP I'm going to do background checks on anyone wanting to have anything to do with my woodlots.

So are these guys legit and competent? So far they haven't presented themselves as such. Yes, I'm suspicious of any group telling me they'll act in my best interests. I've heard that before from you know whom.


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## The Shadow (15 June 2009)

> So are these guys legit and competent? So far they haven't presented themselves as such. Yes, I'm suspicious of any group telling me they'll act in my best interests. I've heard that before from you know whom.




For your information this group is being run by a one man band accountant(woman actually)!! They have previously advised on and sold GS investments to their clients.

I strongly doubt their ability to muster their muscle to put together and run a co-op of this magnitude and importance!!!!

You would all be better of persuing legal action via MacPherson & Kelly, Dennis & Co or IMF as a more viable alternative.


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## SDE (16 June 2009)

*Banks to grab growers' assets*

This judgement in re Enironinvest bodes ominously for growers. Essentially the schemes' assets can be taken by the liquidator and used to pay the Banks.

_For the purpose of winding up the schemes, I have found that the leases and trees standing on the allotments leased by growers investing in the registered schemes may be dealt with by the scheme liquidator in the winding up process. The trees are scheme property for that purpose and the leases may be terminated under cl 34.4 of the PYEP constitution and the corresponding provisions in the other constitutions._

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/vic/VSC/2009/33.html?query=environinvest


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## Forenth (16 June 2009)

The above also states:

92 Notwithstanding the attempt to isolate the trees from the definition of scheme property in the scheme documents, the Act does not permit that outcome. The Act defines scheme property and requires the responsible entity to ensure that scheme property is clearly identified as scheme property. 
93 Section 9 of the Act defines scheme property:

"scheme property" of a registered scheme means: 
(a) contributions of money or money's worth to the scheme; and 
(b) money that forms part of the scheme property under provisions of this Act or the ASIC Act; and 
(c) money borrowed or raised by the responsible entity for the purposes of the scheme; and 
(d) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a), (b) or (c); and 
(e) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b), (c) or (d). 


So trees are part of project assets no matter what GTP ever said and can be used to pay costs. It also says:

94 Section 601FC of the Act provides:

(1) In exercising its powers and carrying out its duties, the responsible entity of a registered scheme must: 
(i) _ensure that scheme property is_: 
(i) _clearly identified as scheme property_; and 
(ii) held separately from property of the responsible entity and property of any other scheme; and 
(j) ensure that the scheme property is valued at regular intervals appropriate to the nature of the property; and 
(k) ensure that all payments out of the scheme property are made in accordance with the scheme's constitution and this Act; and...[16]

That's not what GTP said, wrote or otherwise implied to investors. So much for growers rights...

But it also said each project has to be assessed on its viability before any application to be wound up. Earlier projects closer to harvest might squeeze through, but I'm not hopeful of later projects. As to where woodchip sale proceeds go even if harvested... I dunno. Someone, anyone, please tell me I read this wrong!


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## jiml (17 June 2009)

Forenth, you may well be correct. I suspect the banks are of the same view as I estimate the assets are about 75% of the current land (asset) value.


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## bv2726 (17 June 2009)

Great Southern in secret share-swap deals, report

This article has just appeared on some sites...it refers to a financial review article. 

http://www.businessspectator.com.au/bs.nsf/Article/Great-Southern-in-secret-share-swap-deals-report-pd20090617-T3QYE?OpenDocument

It looks like there were dirty deals for the cattle rustling that GTP did. (Not that this would be a surprise to anyone on this forum).


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## drsmith (17 June 2009)

bv2726 said:


> Great Southern in secret share-swap deals, report
> 
> This article has just appeared on some sites...it refers to a financial review article.
> 
> http://www.businessspectator.com.au/bs.nsf/Article/Great-Southern-in-secret-share-swap-deals-report-pd20090617-T3QYE?OpenDocument



Dear oh dear!

Tony Boyd from Business Spectator is actually suggesting that


> it may well be that the most sensible outcome would be a return to the group's original Project Transform restructuring. Under that plan the MIS agricultural assets were to be transferred to the parent in return for issuing shares to the MIS investors.




http://www.businessspectator.com.au...os-wooden-stake-pd20090617-T43CC?OpenDocument

Double dear oh dear!


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## Judd (18 June 2009)

I believe a triple dear oh dear is in order drsmith.

OK it's tax law but I hope they show some humanity.

http://business.theage.com.au/business/triple-blow-for-scheme-investors-20090617-chv0.html



> *Triple blow for scheme investors*
> Stuart Washington
> June 18, 2009
> 
> ...


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## jiml (18 June 2009)

Judd: Humanity, what the ATO?

While we have all been screwed, the cattle investors who had their shares compulsory resumed and then swapped for worthless shares and compounded by a possible ATO ruling, now that is a triple whammy!


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## The Shadow (18 June 2009)

See the following re the Cattle Project:-

http://www.financialstandard.com.au/news/view/26035/

Shadow


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## david001 (20 June 2009)

Just in from my new accountant (who has been a strong opponent of agribusiness investments for many years) in relation to my attempted witholding of loan repayments to said bank...well written by a learned gent and unfortunately just adds another kick to my/our guts.

"I refer to your email of 19 June 2009.  This is not what you want to hear, but the reality is that you got the up-front tax deduction based on the scheme being one which met tax office MIS guidelines, which related to the scheme having a life of ten years until anticipated timber harvest.  Bendigo Bank’s tax point is right in that you were not supposed to on-sell prior to the expected timber harvest.
Regardless as to that issue it is highly likely that the courts will find in favour of Bendigo Bank, which took over the Bank of Adelaide, recovering its debts.  I read somewhere recently that it’s owed about $685 million from MIS investors and will have to take legal action against those in loan default to protect its own balance sheet.
I predict that it will pursue a few defaulters in the courts, and the rest will make their interest repayments and or capital repayment.  That’s not what you wanted to hear.
Again, I read somewhere that a large proportion of investors had ceased making payments.  Bendigo Bank will have the loan documentation to support their case.  Unfortunately it will also be able to point out to the courts that in probably every case the investors concerned were advised to take out the loan by their accountants, i.e. they had relevant professional advice.
As usual I’m sorry to be the one that has to point out the negatives, but I expect that the courts will uphold Bendigo Bank’s right to capital and interest payments.
Regards,"


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## SDE (21 June 2009)

By GS's own admission, plantation eucalypt project yields substantially below 250 m3/ha were "generally known and documented within the industry from as early as 2002".

In theses circumstances, was the continuing reference to yields of at least 250 m3/ha in PDS/prospectus for GS plantation projects NOT misleading and deceptive?

http://imagesignal.comsec.com.au/asxdata/20090619/pdf/00962230.pdf


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## Forenth (21 June 2009)

SDE said:


> By GS's own admission, plantation eucalypt project yields substantially below 250 m3/ha were "generally known and documented within the industry from as early as 2002".
> 
> In theses circumstances, was the continuing reference to yields of at least 250 m3/ha in PDS/prospectus for GS plantation projects NOT misleading and deceptive?
> 
> http://imagesignal.comsec.com.au/asxdata/20090619/pdf/00962230.pdf




Interesting letter. Interesting in that John Young sold 7 million shares for $32.5 million some months before the public disclosure that GTP would have to subsidise the returns to the first project. I wonder why he did that? What a fortunate coincidence for him.

As fortunate a coincidence as a company that he can take control of at any moment he chooses just happens to get $25 million of loans for $9 million only 9 days before GTP calls in administrators.

What an extremely fortunate individual.


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## KJL (24 June 2009)

david001 said:


> Just in from my new accountant (who has been a strong opponent of agribusiness investments for many years) in relation to my attempted witholding of loan repayments to said bank...well written by a learned gent and unfortunately just adds another kick to my/our guts."




David - don't lose hope or take it as a kick in the guts. The position is, for me, all a matter of interpretation. There are many learned gents out there. They frequently disagree. These disagreements, unresolved, can end up in Court, where more learned gents go toe to toe.

Your new accountant deals only with the simple issue of a right to an income stream. That's fair enough, he (like my wife) is an accountant and that's the sort of issue they consider. However, his note is somewhat light on in terms of knowledge of the situation; he is considering this "do I continue to pay" question in isolation, and his other comments demonstrate he is *not* fully across this issue or its background - in particular he makes no mention of the potentially misleading conduct of GS (I'm referring to potential non-disclosure of true financial position, which is now well-documented elsewhere) in selling these MIS products - maybe he doesn't know the background, in which case don't base your decision on that opinion! 

He assumes BB have acknowledged having to the loans assigned to them. If BB/AB do admit to having had the loans assigned to them, something they currently haven't done, then BB will be on the hook for any such conduct if the loan are set aside and found to be _void ab initio_.  This relates to all payments all growers have made so far - ie BB would need to refund all payments made to growers under the affected schemes. No wonder BB have been somewhat coy on the matter. He also makes a fair amount of other assumptions in his advice, eg "Bendigo Bank will have the loan documentation" - well, my lawyers have asked BB for it and so far they have been unable to produce it! Principally, I would suspect, because BB or AB were not the original lenders - GSFPL were.

Have a look at the Business Spectator article from yesterday (I don't know how to post the link, sorry) which details four law firms acting for about 1000 investors seeking to challenge the loans. Yes BB will need to make provision for it, because it's a potential $615M black hole in their books, but are they really going to sue and pursue 1000+ investors?  Or, could this be more like a CBA/Storm or ANZ/Opes scenario? 

I believe it's the latter, and this is turning into a PR nightmare for BB, and they need to take this into account when they report to APRA or make their annual report, both of which will make very interesting reading. Maybe you could get in touch with one of those law firms? I believe one of them, Slater & Gordon, are considering litigation funding (ie no win, no fee for you). Your alternative is to roll over and let the banks do their thing, so you can continue paying your loan for an asset you'll probably never see.

If you wish, you can trawl through my posts and see my position on this, but it has not changed throughout. And I still firmly believe this matter is not over by a long shot...


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## ajw74 (26 June 2009)

Well my first post, but I've been reading this thread ever since the first lot of Project Transform BS turned up in the mail.

BTW -Thanks to all who have contributed as it has been most helpful.

I'm a year 2000 grower with a very modest investment and no loan.

I do, however, owe them money for insurance...and according to the letter from McGrathNicol that lobbed this week they want me to  'please remit these amounts in accordance with your normal credit terms'....

Well seeing as I only paid the previous year's insurance so I could vote 'no' to PT my normal credit terms are around the 12mth mark. Hope that's fine with them.... 

But in all seriousness, should I even consider paying them?? 
Could they exclude me from getting my return (if there ever is one) because of this? 

Should I write back with a nice and tersely worded letter asking what exactly it is I am insuring, who owns them and the future return given previous discussions in this thread (forenth etal)......


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## drsmith (26 June 2009)

ajw74 said:


> I'm a year 2000 grower with a very modest investment and no loan.
> 
> 1) I do, however, owe them money for insurance...and according to the letter from McGrathNicol that lobbed this week they want me to  'please remit these amounts in accordance with your normal credit terms'....
> 
> 2) Well seeing as I only paid the previous year's insurance so I could vote 'no' to PT my normal credit terms are around the 12mth mark. Hope that's fine with them....



1) What exactly does the insurance cover ?

2) You had to take out insurance to be able to vote on Project Transform ??


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## mikes (27 June 2009)

interesting view/twist on  of recent (3.30 pm fri 26 june 2009)announcements re boq/ storm/asic investigation re financial institution practices and agents of the banks which the banks relied on to fulfil the banks regulatory obligations

hold gtpgb - but of no use to me but may be of interest to financially inept non-professional "not fully informed or properly assessed" mis investors who borrowed. 

my take is that however if referrals to the mis salespeople or advice was given to the borrowers by the borrowers own legal advisors or accountants advising the borrowers, it is up to the borrowers to target them(and their professional indemnity insurers) if they wish to do so, not the banks who are possibly off the hook.


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## jiml (27 June 2009)

I think Mikes is right: if money is borrowed from banks to fund MIS investments that turns sour, surely that is not the fault of the banks rather the greed of the commission agents more intersted in selling the product than providing good advice to their clients, incompetence on behalf of GTP management and a lack of prudence on behalf of investors. Any borrowing to purchase shares (as I have done) either by way of margin loan or securitised loan has attendant risk. As a number of commentators have argued (eg Edge), investment should be based upon the viability of the enterprise rather than than tax incentives...


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## ajw74 (27 June 2009)

drsmith said:


> 1) What exactly does the insurance cover ?
> 
> 2) You had to take out insurance to be able to vote on Project Transform ??




1) The insurance covers "the current value of the standing timber"

2) Hehe - no  I just had to pay my insurance bill to be eligible to vote.


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## david001 (1 July 2009)

KJL, I am on board with Dennis and Co. (as of only late last week) as it seems IMF and Macpherson and Kelly are looking into MIS investments NOT involving 2004-5 schemes like mine.
Bendigo have certainly written me letters chasing funds and my local lawyer emailed a .pdf copy of a very harsh letter Macpherson have written [dated 24th June I think] to said bank outlining Macpherson's position for their clients...basically telling Bendigo to hold off!
I hope Dennis and Co. can come through, as I hope the other firms can help other investors...I am due a legal win, being 0 for 4, in legal stoushes over the last few years...ie 0 wins from 4 issues...so will I finally come out on top..time will tell?
Oh yeah, paid D and Co.a tick over $1000...certainly prepared to accept payment and take me on board as a client...but said no further funds to pay...I hope!


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## Forenth (1 July 2009)

It is certainly my opinion that GTP have misled shareholders and investors about almost everything. If not by outright lies then by withholding information or muddying the waters so it can't quite be seen very well. As for the actions of management, there is still profiteering by at least one even though they failed to take action to prevent the collapse, something that seems to have been foreseen by them for several years.

My question, playing devil's advocate, is where will any monies come from even if legal proceedings succeed against GTP? If D & Co or anyone else win then who will pay? After all GTP is insolvent and I'm sure John Young & Co have set up arrangements to shelter themselves from such decisions.

I hope actions do succeed and claims are settled, but where's the money? I'm not from a legal background, do court awarded payments supercede the secured creditors?


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## drsmith (1 July 2009)

Of possible interest to bluegum plantation investors is the price ITC (subsidiary of Elders (formally Futuris)) has secured for the wood to the end of the year.

http://www.asx.com.au/asxpdf/20090630/pdf/31j9sx9pj579nd.pdf


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## jiml (3 July 2009)

I notice that evidence given in the senate inquiry indicates that 2 directors jumped ship in 2005 on the basis of  'a lack of disclosure' by GTP and that John Young had sold some $32M worth of shares prior to the announcement of the 'top-up'. Why did they not inform the ASX or the market of the reason for their departure so shareholders and prospective investors could make informed decisions? I also wonder whether, having taken the moral high ground, they showed some foresight and flogged their shares?


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## jiml (6 July 2009)

Article worth reading in the financial section of today's Australian. A pity this stuff did not come out (at least for me) a couple of years ago.


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## bv2726 (6 July 2009)

jiml said:


> Article worth reading in the financial section of today's Australian. A pity this stuff did not come out (at least for me) a couple of years ago.




Same here - I read an article slamming MIS stuff from The Intelligent Investor - in the July of the year i had just finished my last investment in Trees, Olives and Cattle. After that I decided to "not do any more and see how it goes". 

Well, I have seen how it goes - or should i I say, I have seen how it went.

Here is a link to the above mentioned article.

http://www.theaustralian.news.com.au/business/story/0,28124,25736266-5018010,00.html


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## jiml (10 July 2009)

For those of you who have not seen it, there is an interesting if not disturbing article in July 8th edition of the West Australian (business section) which can be accessed from their website, sorry I cannot provide the url as beyond my teckno competancy.


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## Forenth (10 July 2009)

jiml said:


> For those of you who have not seen it, there is an interesting if not disturbing article in July 8th edition of the West Australian (business section) which can be accessed from their website, sorry I cannot provide the url as beyond my teckno competancy.




Here it is:

http://www.thewest.com.au/default.aspx?MenuId=32&ContentID=153532

Doesn't say much more than the letter from McGrath Nicol.


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## KJL (10 July 2009)

david001 - good luck with that, the more of us kick up a fuss the better in my opinion. 

Although for me, the 'where's the money coming from' question is not that important (although I appreciate it is for many investors) - rather I don't want to keep paying the bank for the next 10 yrs when I know I'm going to get nothing, barring a miracle.   

jiml - I'm not saying the banks are at fault. Rather, I think GTP are at fault because they misled investors. Legally, if we relied on representations which were not correct when we entered into the loan, then that means the loan is 'tainted'. The Bank just happened to not do enough due diligence when it bought that loan, or income stream, or whatever it did (Bendigo are being coy about the scenario and my lawyer hasn't been able to get an answer from them). But that shouldn't mean I have to foot the bill just because the bank's a bigger gorilla than me.

I've used this analogy before, but imagine this scenario: let's say three months back, I order a brand new GM car. GM tells me it's in great financial shape, and I borrow $50k from GM to finance it.  The car's not yet been delivered, but GM sells my loan to BigBank, then goes into Chapter 11 bankruptcy. In the wash, it comes out that GM didn't tell me the truth about its financial position. 

Has BigBank done anything wrong here? No, not really, other than not doing sufficient due diligence - and even then it also might have been given incorrect information. But do I think I should keep paying my loan to BigBank under these circumstances? Hell, no! 

I don't see much difference between this made up scenario and what's gone on with GTP, unless someone can distinguish my examples.

KJL


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## Wagyu (10 July 2009)

Upon going through all the GTP paperwork for the FY, I noticed that much of the paperwork addressed lacks the date at the top of the page and is also nowhere to be found anywhere in the letter. 

This probably should have rang SOME alarm bells??? Stinking $2 company. 

Should have kept my cows in the backyard. Mooooooo


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## Messenger (10 July 2009)

FYI.

A submission to the present Parliamentary Inquiry into the Agribusiness MIS.

Abstract: 

...  *It is found that the total cost of a forestry MIS project in its 10-year lifespan grossly surpassed the revenue.  Funds collected from new investors were appropriated to support earlier projects and to pay dividends, tax and etc., leaving little to the new project itself.  Thus the business was fraudulent and designed to fail.  The business model also resembled a Ponzi scheme being described in the ASIC website.*  Suggestions for legislative or regulatory changes are proposed at the end of the paper.  *The major culprits of this fraud should be brought to justice. * Attached at the end of the paper is a past letter addressed to ASIC two years ago in which the author contended that the MIS business of Great Southern was fraudulent and cautioned of a multi-billion dollar collapse...

The full text is at the Parliament website

http://www.aph.gov.au/senate/committee/corporations_ctte/MIS/submissions.htm

with submission number 37.  Or please click on 

https://senate.aph.gov.au/submissio....aspx?id=42ccb955-e25f-4353-807e-0c3f4dce4bb5


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## Wagyu (10 July 2009)

KJL said:


> david001 - good luck with that, the more of us kick up a fuss the better in my opinion.
> 
> Although for me, the 'where's the money coming from' question is not that important (although I appreciate it is for many investors) - rather I don't want to keep paying the bank for the next 10 yrs when I know I'm going to get nothing, barring a miracle.
> 
> ...




KJL

I imagine that you still take delivery of the car. In the situation of GTP investors is;

no cattle,
no shares,
large debt,
and more than likely, the ATO wanting their money back for tax deductions that now technically do not exist.

Maybe "Bigbank" bought the loan at discount? It's been done before. Ha. I'm still looking at lots of paperwork with big numbers not worth a cracker. 

Hope you enjoy your new car smell.


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## jiml (11 July 2009)

KJL, As the marbled fleshed Japanese bovine suggests, if the goods are delivered then the obligation to meet the debt exists. In our case, does it mean if the trees are planted the obligation is met notwithstanding they either die, bulldozed or are repossessed? If the car suffers a serious mechanical failure do you stop repayments to the bank? Buggered if I know but it is worth investigating just in case...


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## KJL (11 July 2009)

jiml said:


> KJL, As the marbled fleshed Japanese bovine suggests, if the goods are delivered then the obligation to meet the debt exists. In our case, does it mean if the trees are planted the obligation is met notwithstanding they either die, bulldozed or are repossessed? If the car suffers a serious mechanical failure do you stop repayments to the bank? Buggered if I know but it is worth investigating just in case...




Yeah jiml, I forgot to mention I assumed that the car (ie the ultimate tree distribution, ongoing vine income etc) would not be delivered.   Admittedly, you can take these analogies too far... 

I saw an article in the weekend Fin today (by Matthew Drummond, about p15 or so) citing one of the law firms acting for investors (not my law firm) and saying in essence that "if it turns out that there is some problem with the original loans, such as GS did not disclose their true financial position, then Bendigo have a big problem" - which sums up my thoughts in a nutshell.

Wagyu - not sure it's "more than likely" that ATO will want monies back. Punishing people who invest in what the government saw as much needed agricultural schemes would be harsh indeed, even for the ATO. ATO have previously said (although not in this specific case, on which they've to date been silent) words to the effect that if investors could not have reasonably anticipated the scheme's failure at the time of the investment then any tax claimed would not seek to be reclaimed by ATO. If you're interested I can probably dig out the ruling.  

And I've only ever had one new car, and the new car smell lasted about 10 minutes 'til it was superceded...


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## Wagyu (11 July 2009)

KJL said:


> Yeah jiml, I forgot to mention I assumed that the car (ie the ultimate tree distribution, ongoing vine income etc) would not be delivered.   Admittedly, you can take these analogies too far...
> 
> I saw an article in the weekend Fin today (by Matthew Drummond, about p15 or so) citing one of the law firms acting for investors (not my law firm) and saying in essence that "if it turns out that there is some problem with the original loans, such as GS did not disclose their true financial position, then Bendigo have a big problem" - which sums up my thoughts in a nutshell.
> 
> ...






KJL,

yes you are more than likely to be right re ATO, but GTP is still stinging my back pocket and I am taking a rather negative view holistically speaking. Thankyou for your offer for the ruling, I sometimes allow the smoke billowing from my ears to cloud my vision. 

(still fuming) arrgh.

deep breath....ahhhh


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## Messenger (13 July 2009)

Wooduk,

You have a PM (Private Message).  Please go and have a look.

Best regards.

Messenger


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## The Shadow (14 July 2009)

Hi All,

*SAVE MY TREES!!!!!*

Your involvement is required.

We need you to register your interest on the website immediately, 

http://www.savemytrees.com.au/


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## remoteone (15 July 2009)

I joined the savemytrees site which has been established by the PIS group and has other FA's as sponsors.


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## remoteone (15 July 2009)

My quandary is that I will be a hypocrite if i now register with slatergordon expressing my interest in a suit against PIS.


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## remoteone (15 July 2009)

My current FA is with the PIS group, so on one hand I want savemytrees to assist my with lobbies to Timber Corp and GS Receivers and pertitions to Government MPs
On the other hand, given my understanding that suing a company that it in Receivership is near on useless, I see that PIS are the next target in line.
No surprise that PIS have set up the savemytrees site. It might help to influence investors to decide not to join a class action.

Checkmate again !


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## SDE (15 July 2009)

remoteone said:


> My current FA is with the PIS group, so on one hand I want savemytrees to assist my with lobbies to Timber Corp and GS Receivers and pertitions to Government MPs
> On the other hand, given my understanding that suing a company that it in Receivership is near on useless, I see that PIS are the next target in line.
> No surprise that PIS have set up the savemytrees site. It might help to influence investors to decide not to join a class action.
> 
> Checkmate again !




I'm with you remote1

Would treat PIS's involvement with savemytrees with much cynasism.

Definitely no point chasing GS as there will be no money left there. 

PIS is the much better option.


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## remoteone (15 July 2009)

I haven't checked if this is posted elsewhere, but I've been wondering weather I could apply to become the "Responsible Entity" to take on management of my own Tree Plantation Projects (that I've purchased and have loans for).
Whats the criteria and who do I speak to.?
The receivers would not be happy with the idea but I wonder if there is some legal channel I can go thru?


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## remoteone (15 July 2009)

You can express interest in class action against PIS at 
http://www.slatergordon.com.au/pages/class_actions_great_southern_timbercorp.aspx


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## wooduk (15 July 2009)

Guys that is what the lawyers and Kordeamentha re.timbercorp and McGrath Nicol would like,I am a blue collar worker,with no legal or accounting back ground,but I have learnt in life you need a bit of common dog sense to see in this game that you will get nothing from this unless everybody pulls together.

Advisers are in the same boat as the investors and growers,

Go back and read my priors,and it will and is the only way to come out the other end,remember you signed up for ten years.Project transform only did us a favour, to meet other malcontents like me and show what idiots the GTPmanagement were flagging P.T> even if it would have shown up later than sooner.
Be Proactive and get into taking the RE on collectively and do not give the liquidators any joy while he nicks $5mil a month


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## remoteone (15 July 2009)

Wooduk,
Thank you for educating me. I went back and read your posts. I advise others who have,like myself not read enough of this thread to do the same. I will be contacting TOWNSHEND PRUDENTIAL before even considering taking action against the PIS group. Your right, the FA's involved in MIS promotion stand to loose a lot of business if they dont try to assist their clients. A lawsuit against PIS would be counter productive. Only a collective force of growers, investors and advisors can push ASIC and ATO to rule that the receivers hand over management of these projects to a new RE.  If is left up to the receivers, there will be $0.00 left.
Ive got 
-3 Lots with Timbercorp 1999 that should be harvested this year. 
-33 Lots on KI with GS 2005
- and I guess my 10 droves of cattle will never be seen again.
Taking class action against GS regarding my STOLEN cattle investment might be ok (but again..wheres the money gonna come from?), but not for the Timber Plantations.
We need a new RE for Plantations. And if one was to take action against PIS, now is NOT the time to do it. That would be a last resort if at all. 

copied from previous post:
TOWNSHEND PRUDENTIAL 
PHONE 03 98796555
email: Townshend@immm.com.au
email: bzm2003@bigpond.com AFSL 223947
Townshend Prudential P/L

PH: 61 03 98796555 FAX: 61 03 98794466 Townshend Prudential Pty Ltd
Townshend Prudential- Financial Planners ‘The Bottom Line is “YOU’.


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## jiml (15 July 2009)

Remoteone, in my experience receivers have two goals, not necessarily mutually exclusive: the first is to meet the needs of those appointed them and secondly, to extract as much cash as possible without making it too obvious so something complicated is pretty well up their alley. The problem with an individual becoming a RE is that you own 1/1000 or thereabouts of the product on land owned by some other entity. My guess is you would need to ensure all other stake holders were in agreeance. What you do about those who are not, I am unsure, possibly buy them out?. I would think for those with crops maturing in the next couple of years or so, such a move may prove beneficial. 

If contributor 37 to the Senate Committee is right and that GTP is in fact a Ponzi scheme (or in our parlance) pyramid selling, the directors may be liable and as John Young has made lots of $s out of share transactions and more recently the purchase of loans (at some considerable discount), he may be a target worth pursuing.

I had a look at the 4 corners episode which has the transcripts of the interview with cameron Rhodes.  Makes intersting reading....


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## wooduk (15 July 2009)

Remoteone I need you and others understand that this RE or Co-Op is a big decision for an investor to take.You have to decide if 
1/ Is it financially viable for you,understanding that with anecdotal information in researching and canvassing the locals in the green triangle that the locals do not blink at the the thought of paying $3000 per ACRE,that is $7500 per Hectare.
Why they are not concerned about that is that I am surmising that is what timbercorp and GTP paid the owners for their farms.
No wonder Macquarie Rural  put the slipper in at the senate inquiry because they retreated when GTP hit town to buy up.

The discussion that I have had with some of the locals and check the real estate agents that the trees will default to them (my opinion)and then down they come then return the land to cattle grazing after ripping and resting the land.


2/what is the price of the treed woodlot?,and I don't mean GTPwoodlot of 3 to one hectare.
A hectare 100mX100M=10000M2-----GTPwoodlot 330m2

GTP said 250m3 per lot----which lot?,one hectare lot or a GTP woodlot?

Let us work this together on some notional sums without inflation,cpi etc

Take worst case scenario ,1 hectare is a woodlot and suppose we halve what GTP said rounded down to 120m3 per H

Green timber felled for chips at $40 per tonne/m3 (40% of the tree is water,the rest is carbon or tree fibre) at stumpage or royalty
                                             OR
Dry Bone Tonne Loaded On Board sometimes called at the mill gate
Latest price at the gate was ITC a subsidary company of Elders of former Futuris and I can be corrected that Elders is not travelling to well but doing a lot better than GTP
Price at the gate $207.50 per LOB--from this deduct harvesting,chipping on site and transporting to the mill gate----,just a heads up work on the same maximum radius as what is designated the green triangle and work from the maximum distance to on load at portland

I have not given any thought  on how you would get the trees off Kangaroo Island as GTP was suppose to build a processor there,but as I understand it now the trees I assume would have to be harvested and chipped on site and transported by the ferry to the mainland then hauled to the nearest mill.

See here is a prime example of trees in the GTP calendar ready to come down in 2016,but what if now!?

In a collective or what ever it suits you to call it,if it was mine I woud not harvest then,But get a sufficient amount to thin out and Value add them for structural and or wait for a better price.Remember in this owners RE scenario you have more  control,but not total,and in that newsflash you do not carry a total loss either,

Wooduks first law of forestry fizziks-for every action there is a re-action.

But I am confident that you will do alright,it will take a bit longer maybe

On the cattle,well Iam involved with the IWC directly and it is a woman with other women and their handbags(husbands) doing this,I for one just like the people caught in this do it on weekends and pay out of our own pockets,my accountant is $20000 out of pocket and no she did not advise me on GTP,

At present we believe breaking the cattle duffing is a priority and the Feds have been in contact and the senate inquiry is aware,but I also believe that there is a class action in WA by agroup of lawyers called Solomans,but where that is no idea

My brain is hurting ,and I am hoping all and sundry will please look at this CO /op,contributing constructive ideas and possibly a better way of getting people involvved to empower and make this succeed is paramount especially for the Agri Industry,The benefits and spin off for this industry and actually seeing something that grows and can be recycled awesome


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## jiml (16 July 2009)

Wooduck,
My guess is that the land is the only asset of GTP which will be flogged by the receivers to satisfy the club of banks and they will have no problem convincing the court of that action. Unless there is a new RE (or REs) then the receivers will no doubt recommend to the court that each project be wound up with a distribution to woodlot owners.
Are there other alternatives?

In regard to the droves of cattle, does anyone know whether they have been sold in total or in part?


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## wooduk (16 July 2009)

jiml said:


> Wooduck,
> My guess is that the land is the only asset of GTP which will be flogged by the receivers to satisfy the club of banks and they will have no problem convincing the court of that action. Unless there is a new RE (or REs) then the receivers will no doubt recommend to the court that each project be wound up with a distribution to woodlot owners.
> Are there other alternatives?
> 
> In regard to the droves of cattle, does anyone know whether they have been sold in total or in part?




There is an article reported that Charters Towers had a big day on the 12th of July and a lot was but not all GTP cattle,to add to this townsend,my accountant had alerted the federal stock police on this matter before the sale on the 12th,it is now a police matter and now on behalf of the people in cattle with the IWC has asked McGrathNicol for the record where is the money as it is believed the cattle are stolen.
There are other cattle issues and I can not use it,because Iam not allowed until it happens,sorry.Be patient and see what comes.

The trees are your property,you can go and cut them down now if you wish,I am not advising it though,there are bigger fish to catch,and does not that make you an equal (creditor) with the banks,it is your property not the banks.

As my accountant said,why did not the GTP trustee tell you that a another mortgage was placed on the land that your property is located?.
You paid the money for it and then the RE or trustee does a behind scene without you knowing,get real banks.As a tenant on the banks property,Iformally inform you that I have kept my end of the financial deal and paid off and in advance on my trees and what they are growing on I now expect you the bank to maintain like any land lord ,the property that you the bank believes is yours in a fit and habitable state with no further cost to me,otherwise terminate the original agreement in my, the tree growers favour and compensate me for my fair and reasonable return that I expected to receive at the expiry of the contract.
Failing that let us do a deal that is a win win for the hurt parties and we-the growers will bargain in good faith to purchase the land with our trees and other investors if they should wish.Mr. bank we could even take a loan from you and have a win -win.

Otherwise this will be a long drawn out process


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## Avi (16 July 2009)

Hello,

This is my 1st post on this forum.

I am a Beef Cattle 2007 investor.
So far I haven't approached any legal firm.

My question is:
Can I participate in some legal option so that my loan is written off?
I don't wish to get compensation, I just want get out of this mess.
I don't want to be paying loan for something I don't have.

Are the lawyers trying to persue this outcome?

Thanks.


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## remoteone (16 July 2009)

wooduk said:


> The trees are your property,you can go and cut them down now if you wish,I am not advising it though,there are bigger fish to catch,and does not that make you an equal (creditor) with the banks,it is your property not the banks.




Great info Wooduk,
If my 1999 Timbercorp trees are still standing, then you'r saying theres nothing stopping me contracting a company to log my woodlots?
I could cut and split for firewood and sell off at about $200+ per ton retail rather than sell as woodchip.
Ive simplified the process but you see what I'm getting at.

As for the GTP GS 2005 KI plantation, those trees wont be worth harvesting yet.

Excuse my ignorance, who is IWC?


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## brty (16 July 2009)

Remoteone,



> I could cut and split for firewood and sell off at about $200+ per ton retail rather than sell as woodchip.
> Ive simplified the process but you see what I'm getting at.




Sounds easy and profitable, until you realize that sugar gum, a much better burning wood, sells for $10-15 per m3 as standing trees to the firewood merchants, who then cut, split and dry it, then retail it for ~$90-$100 delivered. This happening in the green triangle area.

brty


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## wooduk (16 July 2009)

Talk about closing the barn door after the horse bolted,ASIC needs to first investigate the following ------------it self first

1/Was any person or persons in contact with the directors in Timbercorp and or GTP?

2/In what context and to what extent?

3/Was it generally known or specifically giving advice to the the companies and to what extent?

4/Was the contact with ASIC and the company directors at arms length?---if not,why not?

5/Under the Asic organisational chart,who was in charge and where does the specific paper trail start and finish?

6/Were the staff of ASIC competent and thorough in their due diligence?

7/Is ASIC an advisory body?,in the context that it only records in an advisory capacity and is restricted in making and or recommending a correction to be able to act on or another law enforcement body to investigate?

8/Has any person persons in ASIC or for that fact any government authority including educational institutions had formal and or informal discussions even in private
in regards to gtp and timbercorp?

As a tax payer I am entittled,to know this so has to be able to have confidence in making a proper informed investment decisions

*******************************************
I refer and urge people to reread the article in reference to the alert that ASIC got TWO AND HALF YEARS AGO,and this is tabled at the senate inquiry
************************************
In the mean time hammer ASIC,this is a set up to fold GTP and Timbercorp.
ring them fax them email them .Ask will the FIRST investigation will be in ASIC it self

Remember Hackett is a director of GTP,and was with ASIC for several years before he went to Great Southern 



ASIC look at schemes

July 16, 2009
THE Australian Securities and Investment Commission has set up a special taskforce to examine managed investment schemes. 

The Weekly Times understands the taskforce was set up following the failures of MIS giants Timbercorp and Great Southern.

The team will look at how best to protect investors and will also examine a range of regulatory issues.

The Weekly Times also understands the taskforce will carry out surveys with MIS investors, asking them about their investments and the responsible entities.

An ASIC spokeswoman would not comment on the issue.


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## wooduk (16 July 2009)

I've been having a squiz at the parliamentary inquiry reports from various professional,legal entities and people who live and make up the back bone of this country the agricultural industry in this cephlobodic city and suburban society,you learn something new eveyday.
It is pulled partly from a submission by Dean Glyn Jones
                                   *********************Quote
So, what can we learn from the GS and Timbercorp fiasco? First up, we were never interested in Timbercorp because they leased all of their project land, whereas GS owned the majority of their land. The 2008 Future Forestry project was the first time GS allowed investors to own the land on which the woodlots were grown. This came about after many years of urging from advisers like me. This land was often owned by a related party, e.g., wife on a lower income, via a unit trust structure. My understanding is that around 70-80% of the land purchased by the land trust investors had been transferred by GS to the land trust, before GS officially imploded. This land trust, being a separate legal entity, begs the question of how the GS Administrator will
be able to claim back that land, now that it is held in another legal entity. So, the unit trust structure has performed as it was designed to do, i.e., protect the assets held within it. Although the ATO indicated they preferred an unlisted company structure to hold the land for the aborted 2009 project, the unit trust still appears to be the better option. What about the woodlots themselves? Well, you cannot introduce a unit trust structure for investing into the actual woodlots. Why? Because the amount invested into the basic woodlot parcel is really prepaid management fees for looking after the lot over the estimated 10 years before harvest occurs. However, what is to stop you interposing between the scheme manager, e.g., GS, and the grower, an arms-length custodian to whom the $3,000 is originally sent. Imagine a large filing cabinet (trust account) wherein the $3,000 sits. As the scheme operator moves through the various stages of managing the lots, e.g., planting, fertilising, pruning, clearing of weeds, etc., they present an invoice to the custodian (who may or may not have a qualified person check that the work has been completed) and then gets paid for each completed stage of the management of the lots. In around 10 years time, there will be no more cash left in the filing cabinet. That is how it should be because the little seedlings tended over the years have now become healthy trees, are harvested with the harvest proceeds (after harvest costs) accruing to the investor. That is how it is supposed to work and the only thing missing is the arms-length custodian. Hopefully the enquiry will not end up throwing the baby out with the bathwater - you just need to change the water. Respectfully yours, Dean Glyn-Evans


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## wooduk (16 July 2009)

remoteone said:


> Great info Wooduk,
> If my 1999 Timbercorp trees are still standing, then you'r saying theres nothing stopping me contracting a company to log my woodlots?
> I could cut and split for firewood and sell off at about $200+ per ton retail rather than sell as woodchip.
> Ive simplified the process but you see what I'm getting at.
> ...





Sorry for not replying sooner
Rem 1
The Iwc is the Independent Woodgrowers Co-Op,there are several posts that make mention of it and I am right into it,it is made up with my accountant and other clients that are affected by this.It has no bling,what you speak to what you see,no pretence and trying bloody hard to get more people to take control themselves and collectively become farmers for want of a another description.The numbers are too small at around 400 involved it keeps you busy.Oh and I noticed a couple of them whom I am not to give up,sms'd me and said my numbers are wrong on the Harvesting,I say they are correct,I am betting them a dozen bottles of blue gum wine,


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## wooduk (17 July 2009)

A new senator to send your and other comments from ASF,you have permission to email mine to the senator .I have alerted her staff have a high expectation to be flooded from ASF in regards to Timbercorp and GTP since this ripoff was exposed
If you have problems just goople the senators name and follow the direction

Senator Michaelia Cash 
Senator for Western Australia
Party: Liberal Party of Australia

Parliament Contact: 
Phone: (02) 6277 3387 
Fax: (02) 6277 5804 


Email: Online Contact Form

Electorate Office:
44 Outram Street 
West Perth WA 6005 

PO Box 1966 
West Perth WA 6872 

Phone: (08) 9226 2000 
Fax: (08) 9226 2211 


Links:

Biography 
First Speech 
Date of Expiry of Senators' Terms of Service 
External Links:
By clicking on a link below you will leave this site 

The Liberal Party of Australia home page 
The Parliamentary Education Office home page 



--------------------------------------------------------------------------------

Comments to: web.senate@aph.gov.au
Last reviewed 17 July 2009 by the Senate Web Administrator 
Commonwealth of Australia
Parliament of Australia Web Site Privacy Statement 
Images courtesy of AUSPIC


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## jiml (18 July 2009)

Wooduck, frankly I don't know what the pollies can do at this stage. Certainly they can ask questions of ASIC and legislate for the future, but other than blaming someone (not within heir own party) what positive steps can they take to claw back our cash? As Korda-Mentha are indicating in respect to Timbercorp non-bluegum plantations (look forward to the case of bluegum wine, I assume a blue rather than red or white) it may be impossible to unscamble the mix and flogging the lot and then distributing to growers may be the only fair solution. Arguably GTP is simpler inasmuch as there are seperate REs each with legal identities but the issue I alluded to previously arises, namely that if some growers want to proceed down the road suggested by KM as against establishing a new RE, how is that resolved? My guess is only by existing growers, or others, purchasing their lots. How a purchase price could be established only John Young would know (usual commission rates of 38c in the apply).


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## wooduk (18 July 2009)

jiml said:


> Wooduck, frankly I don't know what the pollies can do at this stage. Certainly they can ask questions of ASIC and legislate for the future, but other than blaming someone (not within heir own party) what positive steps can they take to claw back our cash? As Korda-Mentha are indicating in respect to Timbercorp non-bluegum plantations (look forward to the case of bluegum wine, I assume a blue rather than red or white) it may be impossible to unscamble the mix and flogging the lot and then distributing to growers may be the only fair solution. Arguably GTP is simpler inasmuch as there are seperate REs each with legal identities but the issue I alluded to previously arises, namely that if some growers want to proceed down the road suggested by KM as against establishing a new RE, how is that resolved? My guess is only by existing growers, or others, purchasing their lots. How a purchase price could be established only John Young would know (usual commission rates of 38c in the apply).




JIML
Your comments on the various schemes in timbercore and GTP,needs me to think a bit more about it,but in a nutshell there will be some that will miss out and that is blunt

On the politicians HIT them with your threads and comments,I know it may seem a waste of effort it is NOT.
You do care?,You can see the long term benefit for yourself,people believe in yourselves,I have read some ,no aLOT of clever comments from technical analyist to down right knoock em out,

What thread am I up to now on ASF since I joined?,it is a few,and the end game is each investor who is prepared to go further and run it together.

Remember---a news article stated that this is the biggest corporate swindle in corporate history in Australia
KPMG is a waste of time in chasing as they never tended a valuation as to what the values of the assets were worth--check it please
Macquarie are dirty on FEA are doing brass(money)
Elders are bleeding,even though they put a brave face on ITC sales recently

So it is important if not to you,but to me and hundreds if not thousands of others that you forward ALL of your ASF and other comments to Senator Cash and let every body know you have done 

What have you got to lose?,and remember this is unique to Aussie corporate history and you are part of it.

GO FOR IT


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## jiml (19 July 2009)

Spot on Wooduck. Yep, every avenue needs to be explored. Those who have perpetrated this mess need to be brought to account. Political pressure may lead to some action.


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## wooduk (19 July 2009)

jiml said:


> Spot on Wooduck. Yep, every avenue needs to be explored. Those who have perpetrated this mess need to be brought to account. Political pressure may lead to some action.




Exactly JIML, do not let the Australian investors who believe inn this country be fobbed off by these bastards,and do not let the politicians treat us the the same way the communist government treat the AUSTRALIAN opposition and government over the Hu Stern arrest and detention without charges and and proper representation as what I would expect if locked up for B.S.

This is what is and will happen to you as investors,you know the whole 48,000 of us in gtp and timbercore WILL  be analysed and found to be the easy way to legally take your assets and the grubs will get the assets that rightly belong to you and the banks including Bendigo will financially screw you.

On the advisers,that creamed the millions you are going to be thrown to the wolves,and no politician will be saving you,rightly or wrongly the advisers are and will be a major casuality in this,Certified Practicing Accountants have done a good job on advisers that are not in their club

Retribution  and reactive action needs to be dealt with,but I am saying again,again and again you and if not thousands of investors in these plantations run it ourselves.

Simplistic statement,agree,feasible yes,and the spin off from every investor
is in the long term in owning the land ,options on value adding for structural grade timber.A virtual continuous recycle of forestry core production in chips,plus after  debt reduction other horizons such as cattle working in synergy ith the regional and local communities.

Did you know that cattle calving like to settle in quiet tree covered areas?,have you thought of the what agistment per head a grazier would pay per head for cattle to graze on plantation land?,have you thought that a pest introduced in in Australian rivers called carp makes a great fertilser on gums to the point that bugs and insects are significantly reduced?
Don't beleive me,go and by a few ltres follw the instructions and try it on your garden,please don't tell me that is not scientific,!

On the lollies,we need to bombard them -send a submission,call for a royal commission,call for a watchdog like the building industry has the ABCC,
After all this is as big as the construction industry!


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## wooduk (20 July 2009)

Fingers pointed at advisersArticle from:article: Herald-sun
July 16, 2009 12:00am
MOST of the 1100 financial advisers who sold questionable tax-break schemes in agribusiness investment company Great Southern were not recognised by the industry, a Senate inquiry has been told.

More than 45,000 investors had money in managed investment scheme (MIS) products with the company when it was placed in receivership in May. 

The products aimed to provide immediate compensation for investments in timber plantations that would otherwise take a decade to mature. 

Many people were encouraged by advisers to invest solely for the tax breaks rather than the long-term investment. 

But only 155 of the advisers were registered accountants or financial planners with tertiary qualifications. 

CPA Australia, which represents more than 95,000 finance, business and accountants, said only 75 of its registered members sold products for Great Southern. 

CPA general manager Paul Drum said they did this despite being aware that making an investment based on the tax deductibility features was not a very good way to make money. 

He said CPA had not taken sponsorship or marketing money from groups that use MIS schemes for many years. 

"We don't want to be seen as passively approving these types of investments," he said. 

But it was not the same story for the Institute of Chartered Accountants Australia (ICAA), which told the hearing that 80 of its members had sold products for the company. Head of financial planning Hugh Elvy said the institute had taken sponsorship money from Great Southern during the past year. 

Its suggestion to limit the tax deductibility of managed investment schemes to the income received on individual schemes was criticised by CPA Australia. 

Mr Elvy said the idea was raised as a result of the recent collapse of the two schemes. 

Quarantining tax deductibility benefits to income generated from a particular investment rather than the investment in general would occur if the idea was adopted. 

The Senate revelations came as the liquidator at Great Southern's smaller rival Timbercorp, Mark Korda, stood down 23 workers employed in its forestry business. 

The workers were asked yesterday to take leave without pay until September 30 or to take redundancy with their full entitlements. 

Mr Korda said last night that, by accepting leave without pay, employees had a better chance of retaining their jobs if a new owner could be found for the business. 

But he expected most to accept an immediate redundancy. 

The Victorian Supreme Court has heard that a winding up of olive and almond-growing projects run by Timbercorp was the best chance investors had of getting any return. 

Mr Mark Korda is seeking orders from the court to wind up the olive and almond projects, claiming there are insufficient funds to continue to operate them under their existing structure.


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## wooduk (20 July 2009)

Is this our salvation or demise?


Fund managers chase Great Southern property
20/07/2009 11:02:00 AM
Fund managers and property executives have offered to buy Great Southern Funds Management Ltd and part of the Rural Opportunities Fund, which it runs.
According to The Australian Financial Review, one of the offers has its origins in a management buy-out proposal that was close to being completed before Great Southern went into receivership on May 18.

That offer came from David Bryant, the Canberra-based founder of Rural Funds Management and the Diversified Agribusiness Fund. Great Southern bought both in 2007 and then rebranded them as Great Southern Funds Management and Rural Opportunities Fund respectively.

McGrathNicol has control of the management company and the fund, because of the parent group's problems, but both are still solvent.

"I would still be happy to buy it back through the receivers, but they are compelled to work through an open-bidding process," Mr Bryant said. "Hopefully in new hands it will prosper." 




The Australian Financial Review
Source: http://www.afr.com


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## Miner (21 July 2009)

Charlie  A from Southern Equities recommended GTP as buy in Eureka Report on 20th Jul.

I am unsure to put money on this failed company but Charlie A is a shrewed broker. Is he ramping for his clients to sell


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## remoteone (21 July 2009)

brty said:


> Remoteone,
> Sounds easy and profitable, until you realize that sugar gum, a much better burning wood, sells for $10-15 per m3 as standing trees to the firewood merchants, who then cut, split and dry it, then retail it for ~$90-$100 delivered. This happening in the green triangle area.
> brty




I admit that I have not as gotten quotes from contractors. but blue gum can sell for around $200 /ton retail here in the Adelaide hills. Red Gum is up to $280/ton) Having the area to store and personal resources to advertise and deliver the firewood myself, i would primarily need to contact a company to log/cut/split and deliver. I'd do the rest. Its not something for everyone, but given my current financial situation and resources, its certainly worth looking into. 
The first issue to clarify is weather I am legally able to log my trees.
Have any other growers done this?


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## remoteone (21 July 2009)

Avi said:


> Hello,
> This is my 1st post on this forum.
> I am a Beef Cattle 2007 investor.
> So far I haven't approached any legal firm.
> ...




Contact Tim McLernon at 400942@imf.com.au
or Brian Burke at brianburke@amnet.net.au
IMF are funding action against GS regarding the Cattle projects


----------



## remoteone (21 July 2009)

Avi said:


> Hello,
> This is my 1st post on this forum.
> I am a Beef Cattle 2007 investor.
> So far I haven't approached any legal firm.
> ...




Contact Tim McLernon at 400942@imf.com.au
or Brian Burke at brianburke@amnet.net.au
IMF are funding action against GS regarding the Cattle projects


----------



## remoteone (21 July 2009)

wooduk said:


> The Iwc is the Independent Woodgrowers Co-Op,there are several posts that make mention of it ....




Wooduk,
I searched the forum and drew a  blank for "IWC" and "Independent Woodgrowers Co-Op" apart from your post. Can you throw me a bigger bone perhaps?


----------



## wooduk (21 July 2009)

remoteone said:


> Wooduk,
> I searched the forum and drew a  blank for "IWC" and "Independent Woodgrowers Co-Op" apart from your post. Can you throw me a bigger bone perhaps?




R-1,apart from what I have stated and what you have posted with contacts to my accountant Townsend Prudential and what I have briefly described of who and what we are,and the fact the the game is to run the trees and own the land which means investors hitting their kick and owning a unit or actually a portion of land with the trees on it,it is as simple as that ---well not quite,as there are the legal issues and getting it moving and bringing the liquidator to his senses like timbercorp have moved.

That is why I have been reluctant to go after advisers and accountants as they are in the same boat as us,

The advisers and accountants have I reckon a fall back and that is what was presented to them.After all look at KPMG,did not earlier there were to be issues with them,but even a nobody like me found it odd not to find a definitve valuation,so how do you go a a little operator.

The entry and continual barrage by the media that it was a tax rort is and was wrong,if it was why did not the financial and business sections of the Fairfax and other astute media outlets say so?,now that that the media says it was a tax rort,can we litigate against the media for not investigating this as they are now canning it,where at the beginning they heap praises of it being,innovative boost for the agri industry,beneficial to communities and regional areas,trees value adding on fallow ground .blah,blah,blah

No, the media is not your friend,the R.E. now and the liquidator is not your friend,the farmers are now not your friend,ASIC is not and never was your saviour or friend,

At the end of the day,we need to consolidate as a collective and stick  together and organise to take the a scheme and if a enough get into this we get another.Remember the trees are their and they are yours,your property----remember that when they send or knock on the door to tell you we are going to take your property


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## remoteone (22 July 2009)

Wooduk,
I'm not joining any class/group actions against GS or TC or the advisers regarding timber plantations, but I am looking seriously  into IMF's litigation against GTP for unlawfull conduct regarding the Cattle Project I have lost. For the Cattle, I see no other option at this stage.


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## wooduk (22 July 2009)

remoteone said:


> Wooduk,
> I'm not joining any class/group actions against GS or TC or the advisers regarding timber plantations, but I am looking seriously  into IMF's litigation against GTP for unlawfull conduct regarding the Cattle Project I have lost. For the Cattle, I see no other option at this stage.




R-1 You do what is right for you and hope it works out well.I noticed on H/C that investors are going after the advisers and promoters,in some way there is a method in the madness that a paper trail that leads to GTP front door will possibly vindicate the issue.I still beleive there is more in this ,from the point of view that directors were still promoting diatribe weeks before the collapse of GTP,anecdooootal evidence in media papers with short quotes from Ikin and another from hackett in to things have are great are an inference either I do'nt give a stuff or I believe my propaganda.

In the cattle it is criminal charges that have to break this whole scenario,here is something to think or better research and come back and tell us.

Jamie Packers consolidated holdings was in the cattle investment?

How long ?

What was the bid that consolidated holdings made for the cattle farms?

The point is that there is a need for a royal commission into the cattle at the very least.It is  ironic that I reckon that cattle are the key to this seeing that I as one never invested in it .

Bring the cattle down and the rest falls


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## Avi (23 July 2009)

Any idea why are law firms taking so long to decide what action they want to take against GTP?
IMF is an exception, as they have 24th July as the cut-off date to participate in joint action.


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## wooduk (23 July 2009)

*Hirst feels the heat as Bendigo investors *

Print Adel Ferguson | July 13, 2009 
Article from: The Australian 
WHEN news erupted last week that the Bank of Queensland was facing legal action over its owner-manager model, it gave angry shareholders in some of Bendigo and Adelaide Bank's 238 community lenders food for thought.

Six former NSW franchisees decided to take action against BoQ and various officers, alleging the owner-manager model is flawed. At Bendigo Bank, a few shareholders in some poorly performing community banks are looking at ways to get their own back. 

*It comes as Bendigo, already under pressure to protect its $615 million exposure to 8200 customers who poured money into the collapsed Great Southern managed investment scheme*, is struggling with funding pressures related to the global financial crisis and the government guarantee on wholesale funding. 

*It also comes as the market questions the $1.37 billion goodwill sitting on its balance sheet from the acquisition of Adelaide Bank less than two years ago. *
The bank closed off its accounts on June 30, but not before making a sharp revision to its full-year earnings back in April, citing overall funding pressures and factors relating to its 2007 Adelaide Bank merger.* It was Adelaide Bank that exposed it to managed investment schemes such as Great Southern. [/B]It is a mess that Bendigo's newly appointed chief executive Mike Hirst will have to deal with. Less than two weeks into the top job, Hirst has received letters from investors refusing to pay principal and interest on loans taken out to finance investments in Great Southern managed investment schemes. He will also receive letters from interested watchers about the community banks. 
In the case of the $615m loans owed by Great Southern investors, Bendigo faces years of messy legal action and negative publicity. In the case of the community banking model, only time will tell how it all pans out. Right now, the message from the bank is that the model works, most shareholders are happy, it has 70 campaigns under way and expects to open 20 branches this financial year. 

But behind the spin the picture is not so pretty for many of the struggling community branches. The way the model works is the 238 community banks operate under a franchise arrangement, in which the local community owns and operates a branch and the bank provides all the infrastructure and support. The community company and Bendigo split the branch revenue 50-50, and the community branch pays 100 per cent of the expenses, including an annual franchise fee. 

Bendigo doesn't readily separate the earnings of the community banks, the number of loans it has made to the community banks, or whether that has increased in the past 12 months. But a retired auditor, who asked not to be named, has taken it upon himself to study the performance of all the franchises to ascertain the true state of affairs. 

His findings are illuminating. Total funds raised over the 10 years to June 30, 2008, was $112m, revenue collected by Bendigo was $116m in the year to June 30, and $112m for the banks, against total profit of $20m. Loans to community banks from Bendigo was $10m. 

The investigation also revealed that 14 of the banks were basket cases, with negative equity, 32 had poor working capital and many relied on Bendigo & Adelaide Bank loans to stay alive. They include Augusta (Margaret River), Dimboola, Donnybrook/Capel, Edenhope, Flemington, Fremantle, Homebush in NSW, Kingsway, Mt Gambier, Mukinbudin, Narrandera, Pingelly/Brookton, Robe and Wyong. 

It found that over 100 community banks that opened before 2006 had lost a good portion of their equity raised, while all but 23 branches made a profit for 2008. Another 40 that opened between 2006 and 2008 made a loss, though some had only opened in the last year. 

According to Bendigo, the number of community banks that achieved net profit before tax at June 2008 was 115, and of those 46 had fully recovered the initial equity put in by shareholders to create the bank. Of the 115, 71 recorded a profit of $100,000 or less. 

Bendigo naturally argues that the model works. It argues the strategy was in response to a vacuum created by the withdrawal of bank branches from "hundreds of Australian communities in the 1990s", its spokesman says. 

"Community Bank has never been promoted (look at any prospectus or go to any community meeting) as a high capital growth venture, where 'equity' and 'NTA' defines it success," a spokesman says. 

But the small profit made by Bendigo from the community banks, despite the fees and 50 per cent revenue it takes from the banks, goes a long way to explaining why the big four abandoned many areas: they are too small, make too little money for the effort involved and make internet banking a much cheaper option. 

Robe Community Bank, which was created in 2003 -- six years ago -- is one of many that are yet to make a profit, never mind pay a dividend. Robe Mayor William Peden, a shareholder in the Robe Community Bank, wrote to former chief executive Rob Hunt on numerous occasions outlining his concerns. The bank retaliated by taking out full-page ads in the local paper. 

Peden claims Robe Community Bank has lost $699,000 over the first five years of the franchise while Bendigo made a gross profit of $683,000 from the operation over the same period. 

Peden says that in the 2002 prospectus for the Robe branch, the worst-case scenario predicted a loss of $77,000 in the first three years. In the year to June 2008, five years into the bank's life, it made a loss far worse than the worst-case scenario of $89,000. "We were told in the prospectus by the chairman of the community bank that investing in the community bank has solid prospects of generating positive returns for investors. The chairman then said: 'I commend this investment to you.' He didn't say it would be 'a donation with no return', which is what it has become," Peden says. 

In light of the litigation that has erupted between the Bank of Queensland and a number of franchisees over alleged misrepresentation of running a bank as a viable business, it wouldn't be a big leap to think Bendigo could face a few issues. 

But the bank thinks not. Nor is the bank concerned about its $615m exposure to Great Southern through its 8200 customers. In a statement to the ASX on Friday, it warns borrowers that they have to keep paying back their loans despite the managed investment scheme's collapse. "We have loaned money invested with us by depositors and shareholders and they have every reason to expect us to pursue our rights." 

Indeed. The only fly in the ointment, and it could end up being a very big and irritating fly, is the loan assignments. Some of the loans were issued by Great Southern Finance and subsequently "sold" or assigned to Bendigo. 

Some lawyers have been hired to try to build a case that the actions of Great Southern Finance rendered the loan transactions unlawful, either on its own behalf or on behalf of Bendigo. If they are successful, it could get ugly for Bendigo. Either way, it faces a lot of bad PR and litigation in the next few years. To put it into perspective, Bendigo has a $40bn loan book, and $615m represents about 1.5 per cent of that book. If Bendigo is forced to write off $100m in bad and doubtful debts from the MIS schemes, it would effectively wipe out the group's cash earnings. Between tough credit markets, the Great Southern exposure and potential problems brewing in community branches, Hirst has his work cut out for him.
Story Tools*


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## bv2726 (31 July 2009)

Anyone have an opinion or comment on the notice today that Cameron Rhodes has resigned as a Director of GTP? Is this a procedure thing? Or does it mean GTP is closing officially?

Just wondering. I noticed that Mr Rhodes has loads and loads of shares and options etc. I am pretty sure that its correct to say that they are collectively worth $0.00 ?


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## The Shadow (31 July 2009)

bv2726 said:


> Just wondering. I noticed that Mr Rhodes has loads and loads of shares and options etc. I am pretty sure that its correct to say that they are collectively worth $0.00 ?




bv2726,

You are correct his shares are worth zip!!! But don't feel to sorry for him cause he got his larde salary and dividends.


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## MugPunter (2 August 2009)

OK...now I'm geeting worried. I have a couple of previous years tranches of trees with GTP (and TIM), and don't know if or how much I'm going to get back on my investment. The real kicker, however, is that despite assurances from my FP to the contrary, a loan I signed for in April 2009 for 2009 trees has been forwarded by Bendigo Bankto GTP, with funds being kept in trust by NAB- they won't release the loan (they are creditors?), Bendigo refuse to can the loan, and all the time I'm accruing interest on a loan against no investment.

Is anyone else in the same situation? I don't know much about this sort of thing, but surely there must be some mechanism whereby a loan is not forwarded to a company in receivership?

Any advice? Legal people are onto it, but I'm not sleeping so well...


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## Forenth (3 August 2009)

MugPunter said:


> OK...now I'm geeting worried. I have a couple of previous years tranches of trees with GTP (and TIM), and don't know if or how much I'm going to get back on my investment. The real kicker, however, is that despite assurances from my FP to the contrary, a loan I signed for in April 2009 for 2009 trees has been forwarded by Bendigo Bankto GTP, with funds being kept in trust by NAB- they won't release the loan (they are creditors?), Bendigo refuse to can the loan, and all the time I'm accruing interest on a loan against no investment.
> 
> Is anyone else in the same situation? I don't know much about this sort of thing, but surely there must be some mechanism whereby a loan is not forwarded to a company in receivership?
> 
> Any advice? Legal people are onto it, but I'm not sleeping so well...




IMHO, if funds haven't been released for the purpose they were for then the loan hasn't been drawn down, and so interest shouldn't be charged. If anyone involved is keeping any funds then you shouldn't be liable for it, and if they somehow make you then they should be liable for your costs. You should check your loan agreement to see if it says anything about this situation, but I'd be fighting it and seeking costs.

PS. All that blah blah about getting independent advice, I'm no professional advisor etc.


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## Forenth (3 August 2009)

There are still a lot of people looking to make $ out of this mess at everyone else's expense.

Is John Young in gaol yet or is he still trying to cash in on the disaster he created?


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## Terra (4 August 2009)

Hey, this guy is still pushing GTP as an investment.  Check his web site - google 'Paul O'Connor Investments'.


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## MugPunter (4 August 2009)

Needs to update his web-site! 

Also, I don't understand how it's possible (and why a person would) buy GTP now (post above re Eureka report 20th July-I couldn't actuallly find the article). Can anyone explain this? Could GTP shares actually still be worth something?


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## bv2726 (5 August 2009)

Miner said:


> Charlie  A from Southern Equities recommended GTP as buy in Eureka Report on 20th Jul.
> 
> I am unsure to put money on this failed company but Charlie A is a shrewed broker. Is he ramping for his clients to sell





Is this "article" from a previous year or something? Is this post a repeat from somewhere?

I would really like to see what Charlie A recommended about GTP early on...no doubt it would be a buy.

Charlie A also recommended CBA as a buy buy buy buy buy from Early 2007 until about mid-late 2008. Everything was a buy from Charlie A all through 2007 and 2008.  (And we know what happened). All through the first half of 2008 was "it will bounce back, this is just a correction" blah blah blah.

All of this was in the Eureka report - funny, thats why I didnt renew...

(And I never saw any articles in Eureka saying not to buy Cattle or Trees from GTP or Timbercorp or....)....


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## Bugsy (8 August 2009)

I'm an investor in the 2008 Woodlot plantation project. I was wondering if someone could tell me if I stand any chance of getting out of this mess -- I wasn't provided with the 'financial advice' from the financial planner ie i didn't sign any 'investment without advice' statement... I'm currently making repayments to Bendigo Bank.. for the next 4 years - I hope not.


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## SDE (9 August 2009)

Bugsy said:


> I'm an investor in the 2008 Woodlot plantation project. I was wondering if someone could tell me if I stand any chance of getting out of this mess -- I wasn't provided with the 'financial advice' from the financial planner ie i didn't sign any 'investment without advice' statement... I'm currently making repayments to Bendigo Bank.. for the next 4 years - I hope not.




Suggest you approach one of the legal firms that are considering initiating class actions.

http://www.mk.com.au/documents/TimbercorpMR.pdf

http://www.slatergordon.com.au/pages/class_actions_great_southern_timbercorp.aspx

Good luck!


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## jimmy g (9 August 2009)

"..I have spoken with John Lawrence in Tasmania, and Fred Gulson of Dennis and Co earlier in the year when I first smelt a rat..."


I wonder if this is the same Fred Gulson mentioned in "Whistleblower Draws Judges Ire" article in the Age (searchable & available free on line)   - he was a major shareholder in a company Main Camp , bought by Great Southern and is described , by his wife in this article (as appearing in the summary by Justice Rares) as "aggressive, irrational, manic, inconsiderate, inappropriate, unable to be reasoned with, impulsive and abusive. She said that some day he … will go over the top and hurt someone" .

If so , Dennis & Co may have made a very interesting decision  & I hope Gulson's psychatric problems, including being an involuntary psychiatric patient (as in Justice Rares summary) are being monitored


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## The Shadow (14 August 2009)

Interesting Offer!!

Check it out at 

http://www.pulpwoodplantations.com.au/

Lets hope there are more offers to come???


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## drsmith (14 August 2009)

The Shadow said:


> Interesting Offer!!



It will be interesting to see how much the want to clip from the harvest proceeds in return for their investment.

It is also interesting that the offer does not extend to the 2004 or later projects. Have they concluded that the harvest proceeds from those projects would not be sufficient to justify the investment required to maintain them and make a return on that investment for themselves ?


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## SDE (14 August 2009)

The Shadow said:


> Interesting Offer!!
> 
> Check it out at
> 
> ...




Yeah, I'm sure that they will promise a great deal, just like those thieves at Great Southern did.

Why??

Check out who is on the board of Pulpwood Plantation.

None other than Phil Butlin.

Remember Phil?

He, and his mate Cameron, brought you Project Transform, when they were both on the board of Great Southern. You know, that great scheme where you exchanged your MIS interests (worth something) for shares in Great Southern (worth nothing)


This is the same pair that are getting sued for their role in the cattle rustling ruse.

http://au.news.yahoo.com/thewest/business/a/-/national/5810257/rhodes-cole-named-in-great-southern-cattle-writ/


Like his young mate, he's coming back for a second bite. This bloke has no shame and no conscious.

http://www.pulpwoodplantations.com.au/about-pulpwood-plantations/board-and-management


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## tally-ho (15 August 2009)

*Re: Legal Action for Cattle Projects*

I have paid Dennis & Co the advance fee - but not signed authority yet. I have also been approached by IMF and could sign up with their class action, which is obviously proceeding earlier and has only a fee if won. 

Is anybody in the same situation and if yes what have you decided and why? Or would it even be advisable to join both actions?

I think the cut-off date for IMF is very close now, so I hope to get some replies from other cattle investors.


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## GumbyLearner (15 August 2009)

Gumby Learner rolls a smoke with *Tally-Ho* papers and *Drum* tobacco 

Was Brian Burke one of the failures involved in this scheme?

That's right Brian Burke former Premier of Western Australia. I'm sure Bendigo should have sympathy for him under the circumstances (diamonds aside)


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## Johnathon123 (16 August 2009)

tally-ho said:


> *Re: Legal Action for Cattle Projects*
> 
> I have paid Dennis & Co the advance fee - but not signed authority yet. I have also been approached by IMF and could sign up with their class action, which is obviously proceeding earlier and has only a fee if won.
> 
> ...




I have also paid D & C but for the trees. Not yet signed the authority. 

His letter suggests he plans to commence action against the GS entities (all in administration) To me this seems a little futile given they have no money - Anyone else have a thought


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## Forenth (17 August 2009)

The Shadow said:


> Interesting Offer!!
> 
> Check it out at
> 
> ...




I notice they have an offer to come out 24/8/09. What if the receivers decide to continue the projects to harvest? Its obvious they've been putting effort into their scheme on the assumption the projects will be wound up. Does this new group, Butlin included, know something not yet announced? Do they know someone involved in the decision making process very well? Its hard to decide who to trust...

As a 2000 investor I'm pretty sure that project did not involve any leased land, I wonder if this new offer will try to include costs for leases.

Watch the skies...


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## The Shadow (17 August 2009)

Beware the Wolf in Sheeps Clothing!!!

Further to my previous post on the proposal by Pulpwood Plantations and to air some of the concerns already posted by others, Growers should be very wary of this proposal given the involvement of the CEO - Mr Butlin (aka Project Transform).

Depending on the age or year of your project this group is seeking to charge a fee between 2% and upto 34% recoverable from grower proceeds. This effectively means they will make an absolute packet once again at the expense of the Grower. 

Is it just a coincidence that Mr Butlin finds himself on the board of this company?? Is he using all the information supplied to GS by KMPG? Too me it looks like he has gone from Cattle rustling to Tree rustling.

And wait for it.....any minute now we will see Investor1 reappear to tell us what a fantastic deal this is!!!

Fellow growers think and think hard is this a viable way for us to go? or are we to be done over again by the ex Great Sthn Executives???

I understand that there may be other proposals in the wind lets just hope like hell that they dont involve Messrs Rhodes or Young behind them.


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## Forenth (17 August 2009)

Notice how the Pulpwood Plantations website bears an uncanny resemblance to Great Southern's?

Another thing for investors to remember is that any offer by Pulpwood Plantations, or anyone else, to manage projects for a share of growers' proceeds is that growers' proceeds are what's left *AFTER* costs for harvesting, processing and selling are taken out. Under GTP this was around 50% of woodchip sales (that $207 / t) and any new entity can invent any price they like for this (Though GTP have stated several times in $ terms what these costs are, check your documents).

So when you agree to something you may find that your share of growers' proceeds is a *VERY* small proportion of the woodchip value. No matter who takes over the projects the growers will be short changed, but its a question of by how much and by whom.


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## drsmith (17 August 2009)

The Shadow said:


> And wait for it.....any minute now we will see Investor1 reappear to tell us what a fantastic deal this is!!!



I can't see Investor1 making another contribution as such. Perhaps something more along the lines of Investor2 me thinks.


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## goodie3shoes (17 August 2009)

"I understand that there may be other proposals in the wind lets just hope like hell that they dont involve Messrs Rhodes or Young behind them."
Funny thing,The Rat Rhodes (and a heap of other ex-GTP STAFF) is behind a proposal to 'salvage' the grape harvest for investors.This pack of 'conmen' just don't give up do they? I suggest caution when dealing with anyone previously associated with this 'Titanic'. Can the boat be sunk twice? I reckon these guys are so 'crooked or incompetant' that they just might be able to sink the bugger again.


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## wooduk (18 August 2009)

This article is nothing short of legal theft,and you the investor are stuffed with a loan repayment plus the on going insurancw for trees that will never see a return that you expected.
In essence all the legal argie bargie that us as investors have gone to pay for justice in this scam will come to nothing and at best I surmise that you will be grateful to at the very least accept a pittance.
Unless growers cut to the chase with this legal ponzi and take the receivers and the administrator to the high court to stop this,advisers,investors and mostly everyone who tipped into this scam are losers.
The banks have gone to each of the states supreme court to get,or tell the legal system in their roll that they the banks are the the entity that by legal switcheroo can do what they like with your property,that project transform could not.
In short as I have posted before,it is like someone walking through your front door while you are having tea with your family,and walking over to your cabinet where your wallet sits unannouced and removing money out of your wallet and walking straight out the door and it is legal.




Great Southern go-ahead for loanLeonie Wood
August 18, 2009 .
IN SOME parts of western Victoria, there are so many eucalyptus plantations that the highways seem to be walled with dark green carpet.

It's a phenomenon Justice Ross Robson of the Victorian Supreme Court probably suffers in his own courtroom; one day he is asked to rule on the failed Timbercorp group and the next he is grappling with bankrupt Great Southern Plantations.

He can't seem to get away from the companies. As the judge told counsel yesterday, his weekend drive took him down a long highway flanked on one side by huge stands of timber owned by Timbercorp and on the other by forests belonging to Great Southern.

Yesterday it was Great Southern's turn in court and, after several hours Justice Robson gave a preliminary green light for receivers of the ruined group to borrow yet more funds from three of Great Southern's four secured financiers that are already owed about $380 million.

The banks have agreed to pour another $45 million into Great Southern to ensure that the company's receivers have enough funds to protect and maintain Great Southern's vast timber, almond, olive and vineyard investment schemes until mid-2010.

The court heard Great Southern's receivers had no funds to pay rent for the land the crops are on, or to pay for fertiliser, water, pest control, fencing, firebreaks, road maintenance and harvesting. The employee bill alone is expected to top $6 million this year.

Norman O'Bryan, SC, for Great Southern's receivers, told the court there was ''no guarantee'' the $45 million would be recovered and the banks knew it was ''a risk''.

''On the other hand you have the practical certainty that if you did not spend this money, or some part of it, these schemes will literally and metaphorically wither on the vine,'' Mr O'Bryan said.

Justice Robson also gave a preliminary indication that the receivers could issue a lien to the banks, allowing them to secure the new loan against the assets of the schemes - the harvest proceeds - a security that would come before payments to Great Southern's 40,000 investor-growers.

In an affidavit filed by Great Southern receiver James Thackray of McGrathNicol, the court heard the receivers found disentangling the books and records of the responsible entity had been an extremely difficult task.

The receivers told the court that instead of attributing income and expenses to individual schemes, Great Southern's group accounts bundled income and expenses according to what type of crop was being grown.

Justice Robson said the receivers' description indicated the records were ''a mess''.

Source: The Age


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## Forenth (18 August 2009)

wooduk said:


> The banks have agreed to pour another $45 million into Great Southern to ensure that the company's receivers have enough funds to protect and maintain Great Southern's vast timber, almond, olive and vineyard investment schemes until mid-2010.




If this is the case then wouldn't this mean that the 1998, 1999 and probably 2000 projects are basically ready to harvest and don't require any further inputs from anyone else, including Phil Butlin and his Pulpwood Plantation mates? (I believe 1998 is already harvested but hasn't been distributed fully, dunno about 1999).

So why not harvest 1999 and 2000 next year? The costs for doing so were already built into the project and as far as I know the market is still there. I don't believe any of these projects have lease expenses either.

Does anyone know if replacing the RE protects projects from the banks' claims against GTP?


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## wooduk (19 August 2009)

In an affidavit filed by Great Southern receiver James Thackray of McGrathNicol, the court heard the receivers found disentangling the books and records of the responsible entity had been an extremely difficult task.

The receivers told the court that instead of attributing income and expenses to individual schemes, Great Southern's group accounts bundled income and expenses according to what type of crop was being grown.

Justice Robson said the receivers' description indicated the records were ''a mess''.

Source: The Age[/QUOTE]


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## bv2726 (20 August 2009)

wooduk said:


> Justice Robson said the receivers' description indicated the records were ''a mess''.
> 
> Source: The Age



[/QUOTE]

Don't you get in trouble if you run a company and don't keep accurate records? Maybe I am being too simplistic, but I thought all that "oogie boogie" stuff on the ATO website that says "we will get you and throw you in jail if you don't do a good job as a director blah blah" was real? Maybe it is but only for small tiny companies...or its just there to scare people off.

And if a company is listed on the ASX, isn't there more "monitoring" that goes on? Aren't there more "responsibilities" and "more severe penalties" if you dont follow the rules?

I know, I am dreaming.


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## SDE (20 August 2009)

bv2726 said:


> Don't you get in trouble if you run a company and don't keep accurate records? Maybe I am being too simplistic, but I thought all that "oogie boogie" stuff on the ATO website that says "we will get you and throw you in jail if you don't do a good job as a director blah blah" was real? Maybe it is but only for small tiny companies...or its just there to scare people off.
> 
> And if a company is listed on the ASX, isn't there more "monitoring" that goes on? Aren't there more "responsibilities" and "more severe penalties" if you dont follow the rules?
> 
> I know, I am dreaming.




Ernst&Young, the company and MIS auditors, may well have disciplinary and civil cases to answer.

I see that the auditors of Westpoint (KPMG) were banned by ASIC and are potentially facing several law suits for their role in Westpoint's collapse


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## jiml (21 August 2009)

I don't think the accounting processes used were illegal, merely sloppy and based upon a view GTP managers would never be brought to account, ie the company would not fall over. Apparently the provision of no-recourse loans to directors was also legal using shareholders assets. I suppose in the end it didn't matter as the company by that stage was well and truly rooted. Hopefully, and I say only hopefully, ASIC may regulate against directors setting their own salaries and dipping their snout into shareholder funds for no-recourse loans without the consent or approval of shareholders...


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## Forenth (25 August 2009)

The Pulpwood Plantations letter arrived today and I've sent off some questions to info@pppl.com.au. Now to wait and see if they answer...


Dear PPPL,

Today I have received your letter regarding your proposal to replace the responsible entity of Great Southern's plantations, 1998 - 2003. There has already been some discussion regarding PPPL and I have some questions regarding your proposal, if you would please respond that would be helpful:

- The receivers of Great Southern have already successfully applied to the courts for $45 million to maintain the projects until mid 2010, money which will be recouped from woodchip sales. Does PPPL's proposal include this maintenance or replace it? I would be concerned if the receivers will take this value from the projects and PPPL would want to be compensated for the same time period.

- As a 2000 project grower I can see that mid 2010 is close to harvest of the 2000 project. What % of revenue is PPPL seeking for taking over the 2000 project? PPPL's figures published online say anywhere from 2 to 34%. What is the actual figure for the 2000 project, and is this of gross sales or of final distribution to growers (after harvesting, chipping and all other costs)?

- When does PPPL envisage harvesting the 2000 project?

I accept that as a business PPPL is looking to make money from its proposal, and while the proposal is certainly interesting there are not many details being provided. Before considering any offer it would be prudent to know exactly what PPPL will do, and what exactly PPPL will require in return. Details was one thing Great Southern did not do very well.

If you wish to contact me then please feel free and I look forward to your responses to my queries.

Thanks and regards,


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## Forenth (28 August 2009)

After 3 days I got a reply, but from my own mail server:

"Unable to deliver message to the following recipients, due to being unable to connect successfully to the destination mail server."

Maybe they don't want any questions. So where's the offer, their website is still blank about it.


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## pist'n broke (28 August 2009)

Forenth said:


> After 3 days I got a reply, but from my own mail server:
> 
> "Unable to deliver message to the following recipients, due to being unable to connect successfully to the destination mail server."
> 
> Maybe they don't want any questions. So where's the offer, their website is still blank about it.




I contacted PPPL via their web site on Monday, got an answer within hours.

Correspondence copied here:

-----Original Message----- 
Sent: Monday, 17 August 2009 9:46 AM 
To: Pulpwood Plantations Web Form 
Subject: [Pulpwood Plantations] Message from the website
Type: Grower 
Are you guys serious? 
I see Mr. Butlin is on your board. From that I can only conclude this is 
another attempted grower rip-off in the grand style of 'Project Transform'. 
He and his GS mates should be in jail. 
Bloody NO in all counts from me (Gxxxxx) and my wife (Gyyyyy) while any 
former GS executive is involved in any way. 
Regards


------Answer from PPPT:-------
Thank you for your email below. We respect your position in relation to the 
involvement of Mr Butlin, however, it is important to point out that without 
the knowledge and experience provided by Mr Butlin to Pulpwood Plantations, 
Mr Gordon Martin (Chairman) has said that he would not have got to the 
position of being able to put forward the proposal to growers. Due to the 
extreme complexities in the structure of these schemes, it is critical for 
any potential replacement Responsible Entity and Manager to have specific 
knowledge on the MIS structures, forestry management and the history and 
structure of these specific projects, hence the appointment of Mr Butlin.
In our opinion it is unlikely that any offers to growers will be made 
without the involvement of some of the previous Great Southern executives 
for the reasons outlined above. Nevertheless, this is purely an offer that 
each and every grower has the right to accept or reject, should a meeting be 
convened to formally put the proposal forward. Under the Corporations Law 
the required percentages must be achieved at those meetings to allow the 
proposal to be implemented. 
Naturally, you will form your own conclusions in relation to the proposal, 
but we would like to highlight that this is a genuine offer that will see 
these projects through to harvest. Gordon Martin is a well respected 
businessman who has had no previous involvement in Great Southern and is 
funding the majority of the capital requirements necessary to fulfil this 
proposal. Pulpwood Plantations is not currently considering purchasing the 
land on which the trees sit and so there is no other reason for Pulpwood 
Plantations to put this proposal to growers, other than to ensure they 
continue to harvest, being the only time that Pulpwood Plantations receives 
revenue (as a share of net harvest proceeds) from its capital investment.
Should we be able to assist you with any further information or 
clarification, please do not hesitate to reply to this email.
Kind regards 
Pulpwood Plantations Pty Ltd


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## The Shadow (28 August 2009)

Well done pist'n broke.

This is another Project transform in the making.

What scares my to hell is that if they are relying on Mr Butlins experience then this is doomed and I for one will not be part of it. As I did with Project Transform and voted against it and will vote against this offer as well.

By the way Mr Butlin has already recruited some of his Great Southern stooges to work with him on this proposal. I know this because they have been in contact with my adviser trying to win over his support. He told then in no uncertain terms that they can take a long walk off a short pier!!

I strongly urge all GS Tree investors to resist this pathetic attempt to steal your trees and that you should send a message to PPPL that whilst Mr Bultin is involved they can forget it.


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## pist'n broke (28 August 2009)

This may well involve Great Southern woodlots:

http://www.theaustralian.news.com.au/business/story/0,28124,25992707-36418,00.html

No wonder PPPL is keeping quiet.


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## Forenth (31 August 2009)

An excerpt from Gunns announcement today:

"Gunns is well positioned to leverage its forestry management expertise.

- Actively working on proposals to play a role in the ongoing operation of forestry assets presently managed by Timbercorp and Great Southern Plantations.

Gunns primary objective is to manage assets and woodflow, rather than deploy significant capital to acquire land or other capital assets.

- Gunns is exploring a number of avenues to achieve this, including working with other parties to advance proposals."


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## Forenth (31 August 2009)

I got an answer from PPPL today:

"Thank you for your enquiry below. In answer to your questions, I can confirm that the PPPL proposal will replace any dollar funding potentially applied by the Receivers from the date on which PPPL assumes the management responsibility. Naturally, any funding applied by the Receivers between the period of the 18th May 2009 (their appointment date) and the date on which PPPL assumes responsibility could potentially be recouped by the Receivers on harvest, if it complies with the court ruling in regards to the lien.

PPPL's fee in relation to the 2000 Plantation Project will be an additional 15% of NET harvest proceeds (ie of the amount to be distributed to growers). The existing 5.5% inherent in the project will still be payable to GSMAL.

Harvesting schedules are determined by a combination of factors including the seasons, seasonal conditions, work scheduling with contractors and chipping, stock pile and vessel scheduling at the port, therefore we are notable to give you an exact date as yet with regards to the harvesting of the 2000 plantations, but due to its very large size, we would imagine that it would take place over a couple of years commencing sometime year, with interim distributions made to growers over this period."

So, PPPL envisage that the 2000 project won't be harvested completely for a number of years, and total fees will be 20.5% of what's left after costs. Perhaps it will be the best offer but I wonder what/if Gunns and others will come up with?


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## The Shadow (31 August 2009)

This is another wrought concocted by Mr Butlin and his GS cronies. He has sold this to PPPL and the GS Investors will pay again if this goes ahead.

Remember that previous GS harvests have incurred Harvesting costs totalling upto 60% of the Gross Harvest Proceeds. Now add the 20.5% that PPPL will be taking and there wont be much left for the Growers!!!!

Lets hope like hell that there is other deals to be put to the growers cause this deal in its current form does little to help the growers....but alot to help Butlin & Co.


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## Forenth (1 September 2009)

The Shadow said:


> Remember that previous GS harvests have incurred Harvesting costs totalling upto 60% of the Gross Harvest Proceeds. Now add the 20.5% that PPPL will be taking and there wont be much left for the Growers!!!!




I cring at any extra fees but with regard to harvesting costs I recall they were always estimated to be around 50% of gross proceeds. GSL gave a breakdown in actual dollar figures for each process and if processing costs are still around 50% then nothing has changed.

BUT, I think the 2000 project has a gross value of around $200 million (I think, could be wrong), so 15% of half of that is a good return on the $20 million PPPL plan to put in. After all, that was for all 6 projects not just 2000. Even if PPPL put $7 million into just 2000 they're making over 100%.

What will Gunns & others offer? We now have a top of the market so they would have to offer less to win the contract, lol. I think PPPL are looking to be first to call a meeting and so prevent anyone else getting a bid in.

I better write to Gunns and tell them to hurry up, lol.


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## Just Puzzled (1 September 2009)

Hi All,
"Just Puzzled " is about how I am feeling about this whole Great Southern thing. I have been reading what you guys have been saying and... I'm still puzzeld. If you have a moment could you tell me what is going on with this crazy investment. I invested in 2008 ( yep.. a newy ) and I don't really understand what is happening...lots of stuff I've read is very concerning about the people in charge of different areas, including some solicitors!!! I'm a single mum, who was advised that this was the way to go and now the agent who set me up no longer works for the company and I can't seem to find anyone who will spell it out in "normal terms". If you can help I would be very grateful as I am at a loss as to what to do or think. Thanks


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## jiml (2 September 2009)

Mr Martin of Coogee Chemicals is recorded as saying "a group of business men has contributed $20M...to PPPL"  I wonder if one of the contributors is a Mr John Young....


----------



## edliw (2 October 2009)

Jiml

 What happened. You killed this thread. thought there was some good info here, not mine but some of the other posters.
Any way we are not dead yet.


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## jiml (4 October 2009)

You are not wrong - I enterered the name John Young and the thread withered on the vine. Buggered if I know. Anyway, it seems if woodlot holders will get (most) of their money back, unlike shareholders...


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## bv2726 (5 October 2009)

jiml said:


> Anyway, it seems if woodlot holders will get (most) of their money back, unlike shareholders...




Not if the woodlots are growing on leased land. I read the circular closely - in the 2004 and 2005 project circular, a percentage of the trees was on "leased land". The receivers cant pay the rent, or wont, so the landlords can take the land back...and the trees become theirs. One of my lots is located on leased land (unknown to me at the time). So, looks like I have blown that money...

(The receivers said that each individual investor can obtain their own legal advice...)


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## Forenth (8 October 2009)

I'm sure that when I invested in 2000 they said the money included GTP buying the land for the trees, but in the investor portal at their website it has quite a few allotments of the 2000 project listed as being on leased land. That's something I was told they weren't going to do, at least in 2000.

I am relieved that my allotments are not on the list, but returns were always going to be averaged across investors so I guess any losses due to leased land will be suffered by all.

This forum also seems to be more active on another site.


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## Johnathon123 (8 October 2009)

Interesting announcement from AYT at 9.29am. Sorry cant seem to copy it here. They have essentially increase the write down of loan values to do with Great Southern


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## petesake (8 October 2009)

I have been a keen observer of everyones valued input on this thread and so this is my first post. Thank you all for your posts and advice. 
I also am part of the 2000 scheme and was wondering if my trees are on leased land or not. How do I find this out? I went on the Great Southern site but could not find it.
Also, has everyone received the latest paperwork and offers from pulpwood? Is it best to just sit back and wait to see if any other offers come about at this stage?


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## Johnathon123 (8 October 2009)

A few questions for the group:



If you have finance with Adelaide Bank are you still making payments.
If yes why?
If No Why?

My investment is in 2004 and on Leased Land!! Does that mean I have done my dough and should just go home or as the returns are averaged does it mean we have all done a little bit of my dough?

Finally as McGrath Nicol seem to suggest they havent paid the rent and landlords are reclaiming the land does that mean the ATO is standing by with a large hammer to reclaim its deductions.

Sorry for all the questions

Thanks


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## bv2726 (8 October 2009)

petesake said:


> I also am part of the 2000 scheme and was wondering if my trees are on leased land or not. How do I find this out? I went on the Great Southern site but could not find it.




You need to register as an investor on the great southern website (www.great-southern.com.au) and then you get access to information specific to your holdings. For the 2004 and 2005 plantations it has a list stating which grower numbers and plantation lots are on leased land.

You need to have your grower number and some other details to register..it can all be done online.


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## bv2726 (8 October 2009)

Johnathon123 said:


> A few questions for the group:
> 
> Finally as McGrath Nicol seem to suggest they havent paid the rent and landlords are reclaiming the land does that mean the ATO is standing by with a large hammer to reclaim its deductions.




On the great southern website today, they have posted three new draft rulings from the ATO about this topic. I have tried to read them...haven't understood it all yet. Time to read it again.


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## Johnathon123 (8 October 2009)

bv2726 said:


> On the great southern website today, they have posted three new draft rulings from the ATO about this topic. I have tried to read them...haven't understood it all yet. Time to read it again.




Thanks

Had a read

With the exception of 2009/D9 they all seem to relate to "Non Forestry" MIS and therefore would not relate to me with a tree investment. Is that right??

Having said that I would assume (based on nothing) that Forestry and Non Forestry are treated the same by the ATO??

Any further thoughts?


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## The Captain (9 October 2009)

All growers should take a look at the website http://www.savemytrees.com.au/ and perhaps join.
Cheers


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## Belrose (12 October 2009)

The Captain said:


> All growers should take a look at the website http://www.savemytrees.com.au/ and perhaps join.
> Cheers




Thanks Captain! That's brilliant - precisely what's needed.  Much better than those law firms that were trying to coral us together and bleed a few more drops out


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## Wally1952 (14 October 2009)

Letters from Gunns today. Offer if goes ahead sounds a bit more promising than Pulpwood. Pulpwood have changed the date of the Growers meeting. I don't think I will be submitting the new proxy forms!!


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## pist'n broke (21 October 2009)

http://www.theaustralian.news.com.au/business/story/0,28124,26240120-5013408,00.html

There seem to be quite a few similarities to Great Southern.
Let's hope ASIC has a look at them too!


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## edliw (21 October 2009)

From all the complaints  (ASIC)  has received regarding GTP, If they don't take some form of action on this, what are they there for and purpose of existing.
Unfortunately they are still letting the little people down, we tend to rely on them to keep things on the up and up.What hope do we have.

ASIC.  WAKE UP.


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## pist'n broke (30 October 2009)

Found today four new Draft Tax Determinations on http://www.great-southern.com.au/

Could anyone understanding this language make an attempt at a translation into something a simple engineer can understand?

Thanks a lot.


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## drsmith (30 October 2009)

pist'n broke said:


> Found today four new Draft Tax Determinations on http://www.great-southern.com.au/
> 
> Could anyone understanding this language make an attempt at a translation into something a simple engineer can understand?
> 
> Thanks a lot.



If a CGT event occurs within 4 years of claiming a deduction for a managed investment scheme it will be disallowed.

The example on the first ruling suggests the demise of a managemed investment scheme as a result of liquidation is a CGT event. This I assume refers to the individual schemes themselves and not the management companies such as Great Southern or Timbercorp.


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## Forenth (10 November 2009)

*To be divided and conquered*

Below is a quote from the website www.savemytrees.com.au. Basically, if more than one proposal to take over the projects is presented for a vote by the receivers, the odds are no proposal will achieve the level of support required and projects may well be wound up, I'm sure to the banks' delight.

I have voted to have just one preferred proposal presented for a vote and so improve the chances of a new RE being given control, be it Gunns, Black Tree, the IWC or the expensive Pulpwood.

Otherwise McGrath Nicol may just take the rules and beat investors over the head with them. Despite multiple offers being on the table the receivers may be able to ensure none of them get the votes. IMHO, we need just one presented for a vote. Just wish they'd release the details of Gunns and Black Tree...



"Under the current voting procedure, for any of these three proposals to succeed it must achieve a "Yes" vote in each project year of :-

50% of total woodlots (i.e. total amount invested in each year)

and,

75% of all those attending a growers meeting (either in person or by proxy).

We believe McN propose to present all three proposals to growers to vote on. With 10 pulpwood projects (1999-2008) that means there will be 30 possible voting outcomes.

This means that the chances of one commercial offer achieving the required voting hurdles over all project years, becomes much more difficult. Despite the fact that there are three competing commercial offers on the table, this means that a winding up of all projects becomes a possibility.

Please click on the below link and fill in your details to vote!

http://www.savemytrees.com.au/update_and_grower_poll.php

Or simply visit the website www.savemytrees.com.au and click on to the red icon on the left "Growers Poll".

If you are a registered grower please poll as you see fit.

If you are a grower not yet registered, please register then poll.

If you are an adviser please pass on to all other advisers and their clients so they can vote."


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## irenebrisbane (11 November 2009)

Received an insurance quote from Agricola Crop Insurance.  Has anyone else insured through this group?  It appears that we are currently uninsured - not a good place to be, methinks.  McGrath Nicol seem to go to some pain to distance themselves from it.  What do you think?  Is anyone using any other company or is this the only way to go?


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## stefanos64 (11 November 2009)

Received the same insurance offer from Agricola.  It mentions that insurance may be withdrawn if adequate fire prevention is not in place.  I called McGN and enquired if Agricola were happy with what was being done and they advised that in their risk assessment they were and have therefore offered the insurance.  I am not aware of any other insurers offering to cover our trees.


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## bv2726 (12 November 2009)

stefanos64 said:


> Received the same insurance offer from Agricola.




I also got the insurance offer from Agricola. Fascinating thing was, I only received an insurance offer on one of my woodlots from 2005. Then I checked on the Great Southern website and one of my lots is on leased land.

Looks like its now confirmed that I have done my dough on one of the woodlots, if Agricola are not even offerering to insure it...

I took up the insurance. Hey, its not that much, and after losing so much on Great Southern, it would be a shame for the remaining trees to burn down and I dont even get a cent...


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## Taltan (12 November 2009)

Does anyone know when GTP shreholders will be able to claim the Capital loss from their investment. I know we have to wait for the acknowledgement of liquidation or something, will this happen now that winding up has been recommended? will it definately happen before 30 June 2010?


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## MugPunter (13 November 2009)

I had trees in GS 2006 Plantation which were on leased land in the Tiwi Islands. I understand the landholders exercised their right to take over the trees on 1st October when the lease could not be paid. Does this mean I've lost any entitlements to this investment/any proceeds? Can I still claim the tax benefit/capital loss?

What a fiasco...


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## jiml (13 November 2009)

Taltan,
I am in a similar boat, I expect all the GTP entities should be wound up by then. There are a couple of ATO rulings about insolvent companies that are not wound up and I would suggest you speak with your accountant if there is no resolution prior to June 30 2010. As I have no CG at present I probably wont claim a deduction until the following tax year (if I am lucky). The one advantage shareholders have is that the dough been done and so there is no worry about whether an new RE will be found and whether to vote for or against a prposal, just tears...


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## SDE (13 November 2009)

MugPunter said:


> I had trees in GS 2006 Plantation which were on leased land in the Tiwi Islands. I understand the landholders exercised their right to take over the trees on 1st October when the lease could not be paid. Does this mean I've lost any entitlements to this investment/any proceeds? Can I still claim the tax benefit/capital loss?
> 
> What a fiasco...




You will remain a member of the 2006 scheme. All proceeds from this scheme are pooled, and then divided amongst the members. A bit over 20% of the 2006 scheme was on leased land. The loss of the TI plantation will be shared by all members of your scheme.

Your initial tax deduction will remain valid

http://www.savemytrees.com.au/downloads/Government_to_Provide_Tax_Certainty_to_Investors.pdf

As you have had a 100% upfront deduction, you cannot claim a second tax write off (no second bite of the cherry I'm afraid)


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## MugPunter (13 November 2009)

Thanks SDE. Was the info regarding pooled distributions in the product disclosure statement? 

Whole thing still a fiasco...


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## preacher (17 November 2009)

Hi new to this but was wondering if any one knew ex director John young if you do tell him it was me that chased asic acccc many pollies fed police attorney general and others TO JAIL HIM how come i was 3 years ahead in my payments of 200000 and his company javellin assett managment just happened to buy my blue chip debt for 33 cents in the dollar he stands to make another 10 million outa us  How did he find out my wife was such a good payer and an excellent risk Why wasnt i asked to buy it out at that price? WHAT A SCAM i have made it my lifes work to see this man behind bars


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## preacher (17 November 2009)

Up till now i thought all i could read for imfo was gs website and save my trees Everyone has knocked me back about contacting other investors WHY DOESNT SAVE MY TREES MENTION THIS SITE ON THERES another thing is save my trees mostly consisting of advisors that sold most of this junk TIME TO RISE UP and set up an investor backed website  i am a pc dummy but surely we can do something ThE SMTREES web site seems to be a copy of the gs website THIS IS ONE OF THE BIGGEST COLLAPSES IN AUSTRALIA today tonite wont reply current affair or any abc programs whats going on LETS STICK IT TO THE MUNGRALS


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## Taltan (18 November 2009)

jiml said:


> Taltan,
> I am in a similar boat, I expect all the GTP entities should be wound up by then. There are a couple of ATO rulings about insolvent companies that are not wound up and I would suggest you speak with your accountant if there is no resolution prior to June 30 2010.




Thanks for confirming that we have to wait and that it should happen by 30 June. I know there's  a fair way to go till June but I like knowing time-frames for selling when I decide which stock to buy.


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## jiml (20 November 2009)

To the Preacher: to paraphrase the bible, 'it would be easier for a camel to go through the eye of a needle than John Young to go to gaol'. As the recipient of two golden handshakes from GTP, first the $2M 'thank you' from the board upon his retirement and latterly, the gift/purchase of your loan, his actions maybe questionable in an ethical or moral sense, but not illegal.  Sorry.


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## Vision (20 November 2009)

*Tiwi Islands Trees*

Dear Preacher and all,

I'm another investor in the the 2006 plantations on the tiwi islands.  

I agree on a lot of points, why trust another RE.  At the moment we have nothing, no rights to any of our assets and a lot of us with debt.  Due to the leasing arrangement TLC has now inherited our assets debt free.  Why should we not be kept out of the loop as the hungry PPL, Gunns etc deal directly with TLC.  

Individually we don't have the capacity, knowledge or funds to take this on.  We don't fall into the typical catagory for the save my trees group, as of yet they haven't even returned my emails. 

My plan is this. 
1. Do TLC have the right to take our assets.  Did GS have the right to give them?
2. Currrently the lease is unsatisfied.  Can we negotiate with TLC as a group to take on the lease OR can we force this through the courts.

My vision is OUR assets, OUR lease OUR control. 

I have set up an email address so we can start to contact the growers effected by this (although I need 5 posts on this site to post an email address, this is number 1).

I'm not a lawyer, not an accountant, and I don't know the intricacies of the law and administration process.  On my own I'll never know if I could have done anything, as a group, maybe we can pool some funds and get the process moving.  Among this group there must be some good knowledge of what I'm proposing is possible, maybe already in the process, even not possible, at least I'll know.


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## Vision (20 November 2009)

*Tiwi Islands Trees*

Dear Preacher and all,

Email 2.

For confirmation I have now engaged my solicitor to track down the leasing documents.  I will have this soon.


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## Vision (20 November 2009)

To Preacher and all,

Email 3

It would be really helpful to know if anyone with legal experience has looked into the asset actual ownership and if we did actually own the assets?


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## Vision (20 November 2009)

To Preacher and all,

Email 4

Has anyone had contact with PPL over their offer for the 2005 and 2006 projects? Does this included leased land?


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## Vision (20 November 2009)

To Preacher and all,

Email 5

Last one. I believe I will lhave copies of the leases today. Thanks


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## Vision (20 November 2009)

*Tiwi Islands Trees*

To Preacher and all,

This has only just been set up, so it may require a couple of hours.

Spread the word.

tiwitrees@bigpond.com


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## edliw (20 November 2009)

Re Tiwi Plantations

Why bother, they were worthless from the start and it never will be economical to harvest and export the product.

Just a JY indignious feel good fantasy and con.


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## jiml (24 November 2009)

Sadly I think EDLIW is right: Tiwi plantations have failed in the past so the history is not good and also the infrastucture costs are high let alone the maintenance, lease fees etc to harvest. A forestry economist has also indicted that when the acacia is due to be harvested it will be competing with an over supply of plantation blue gum, arguably a higher quality product. Growers, Tiwi Islanders, shareholders and the ATO have all been dudded. Seems the only entity not dudded is John Young, however he did have a considerable shareholding that is now worthless.


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## Vision (24 November 2009)

Sadly, I know your right.  Emotion taking control after a rather hefty loss. I pity the poor Tiwi islanders who I believe are now left with a enviromental mess waiting for the NT gov to bail them out... again.  Apparently McGraphNicol will be contacting tiwi growers in the next couple of weeks.

Strangly I was sent a letter from a solicitor (how he got my address I don't know) wanting growers to become involved in a case against GSMAL/AdelaideBendigo for the change in finance arragements from GSMAL to Adelaide Bendigo and that it wasn't legal? I had also read reports that Adelaide Bendigo had suffered losses as a result of people defaulting on their loans. 

I don't hold much faith in this, came with a nice little "pay money now, sign here" ending to the letter.  Just wondering if anybody had any insite into it.

Thanks


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## preacher (28 November 2009)

hey vision good on ya thomas edison tried 5000 times before the light worked we must not give up we need people like you we can get this on track


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## glendaw101 (6 December 2009)

*Great Southern Plantations*

Anyone invested in GSP trees needs to also read the offer from Black tree besides Gunns and PPL. I think Black Tree are correct in saying the receivers McGrathNicol are working for the banks. Even though us growers have a lot more invested and a lot more to lose than the banks. 
If you want to read the Black Tree proposal visit

http://www.blacktreeltd.com.au

http://www.blacktreeltd.com.au/Portals/16/20091201 BT grower letter.pdf


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## MugPunter (6 December 2009)

The Black Tree proposal at least gives me some value for my Tiwi Island leased 2006 Plantation. Gunns (and ?PPPL) will not provide any distribution to investors in 2006 Plantation on Tiwi land.

I smell a large rat. My investment has been turned over to the Tiwi Island Land Council, and I still have a large, high interest loan against no investment. The investors in 2006 Plantation had no say on whether their trees would be on Tiwi (leased) land or non-leased mainland land. The Receiver's gave no option for 2006 Plantation investors to make up the shortfall on the lease from September 30th, 2009. I can't believe this is a fair situation, and somebody, somewhere is benefitting...

Any other 2006 Plantation growers on Tiwi land taken any legal steps? What are our rights?

I'm also involved in 2008 High Value Timber. Does anyone know if there has been any bidder  interest in this ?


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## preacher (6 December 2009)

Any one got any idea what is happening with olives? Still looking for john youngs phone number will be happy to give it out when i get it HA HA


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## glendaw101 (6 December 2009)

MUGPUNTER you really should take the time to read the Blacktree proposal - the links I posted earlier - however here is a brief summary - note the Tiwi Islands are in *bold*
The Offer  

Black Tree proposes to restructure the 1999-2008 Great Southern pulpwood MIS projects to maximise returns to growers. 

The 1997 and 1998 projects, where harvesting is close to being completed, will be managed by Black Tree under the current financial arrangements.

All projects will be maintained and harvested by Black Tree. Growers will NOT be required to provide further funds to maintain plantations. 

Black Tree will fund the costs of maintaining plantations, on the basis that these costs are recoverable from Growers at the time of harvest.

The key benefits of Black Tree’s Proposal are:

Returns to growers maximised 
All growers will receive an annual cash distribution from harvest proceeds over the next 10 to 12 years. 
*Grower leases on the Tiwi Islands and on other properties where head leases have been disclaimed will not lose their interests in the projects *A modest fee structure directly aligned to growers’ interests 
Management team focussed on reducing costs and maximising revenue - not simply attracting new annual MIS sales 
The key elements of the Black Tree proposal are:





1. Pooling

The 1999-2008 Great Southern Pulpwood projects will be ‘pooled’, with growers receiving a share of the pooled proceeds of all future harvests. Pooling will enable Black Tree to manage all the projects as one forestry plantation estate and will result in a number of financial and operational efficiencies, particularly in terms of harvest scheduling.

Importantly pooling means the projects are largely self financing, reducing the cost and reliance on external finance, which in turn increases the amount of overall cash available to be distributed to growers. It also spreads growers’ geographic and climatic risk and optimises across-project performance.

The share of the proceeds growers receive will be based on an assessment of the relative current value of each of the projects and will be fixed for the life of the project.  Early projects are more valuable than later ones (because harvest revenue is closer and costs to get there are less) and will therefore receive a higher share of pooled harvest proceeds.  An independent expert will ensure relative values are fairly determined.

The 1997 and 1998 projects, where harvesting is close to being completed, will be managed under the current financial arrangements.

2. Modest fee structure

Black Tree has proposed a harvest management fee of 2.0% of net harvest proceeds across all pooled pulpwood schemes (1999 – 2008) in addition to the existing management fee of 3% due to the RE (total 5.0%).  For 1997 and 1998 projects, the fee will remain at 3% of net harvest proceeds.

These fees are significantly lower than the alternative Pulpwood Plantations proposal of 5% for the 1998 project and 13% - 37% for the 1999 to 2003 projects.

Black Tree’s proposal is structured so its interests and growers interests are perfectly aligned. 

By proposing a management fee tied solely to net harvest proceeds payable to growers, Black Tree has every incentive to maximise returns to the investors.



3. Offer fully funded

Black Tree will inject $30 million of working capital into plantation management. The working capital loan will be repaid from harvest revenue and ensures no further financial contributions to plantation management and operations are required from growers.



4. Early cash offer

In addition to the $30 million working capital loan it can inject into the business, Black Tree will arrange a cash offer to growers in early projects who would prefer to monetise their investment immediately rather than extract maximum value over the longer pooled harvest period.


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## jiml (7 December 2009)

Further to Glendaw101, the Bunnings family who I understand are the majority shareholders of Black Tree, have a significant history in forestry and have behaved ethically in regard to their enterprise. Unlike some....Sounds like the best deal to date.


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## MugPunter (7 December 2009)

Yes, I sent back the form from the Black Tree website prevailing upon the Receivers to allow Black Tree to meet the investors to discuss their proposal. They need 5% of eligible investors to return the form.

Do it now comrades!


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## Forenth (7 December 2009)

*Blacktree's devil is in the details*

Having read Blacktree's announcement they are desperately trying to sweet talk investors, as all the offers are. If there's one thing anyone can tell it's when they're talking to us they're trying to make money for themselves. Never forget that.

There's one particularly disturbing phrase in the announcement:

"The pooled structure allows the projects to become self financing through the use of a portion of the earlier project harvest proceeds to pay later project maintenance costs. This will reduce the cost of, and reliance on, external finance and will increase the amount of overall
cash available to be distributed to growers”.

So, this implies that maintaining the projects will be paid for by investors, since ultimately all value stems from the trees. The after all the other associated costs of harvest etc Blacktree take their 5%. 

My concern is what is this new cost, in dollar or %. Right now it's indefined... a blank cheque. These 'costs' could eat up 80% of revenue, depending on how its enacted. Use companies that overcharge, who could even be Blacktree subsidiaries or have the same directors, and value is funnelled away nice and legal.

As for a pooled structure, GTP dumped all their projects into one bucket when it came to finances and we've been waiting months for auditors to sort the mess. Why vote for the same mess? Pooled structures are just a lazy and cheap way to administer, it only benefits Blacktree. As for reducing costs, GTP claimed project transform would enable them to reduce costs, but they had complete control anyway and could manage how they wanted, so this argument about pooling being cheaper is all smoke and mirrors.

PPPL and Gunns offer a predefined %, and I'd rather continue with this knowing what the costs will be, not Blacktree's blank cheque on maintenance. If they announce a figure it will be worth reading but until then they are acting just like GTP.


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## glendaw101 (9 December 2009)

*Great Southern Plantations*

Anyone know what would make BlackTree back out? I quote 
 "The future of your plantation assets is now in your hands. Good luck"

http://www.blacktreeltd.com.au/Portals/16/20091209 BT Letter to Growers.pdf


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## glendaw101 (9 December 2009)

Forenth

Good sound comments
However may I add that although Gunns and PPL say they will only take 55-50% (this is the year my crop is in)  of our harvest proceeds they do not estimate what value these proceeds will be.
I cannot find any data on currents harvest values for wood chip or other plantation trees. So it may be 50-55% of something or very little.

In other words do any of these proposers offer value of what the harvest may be?
So even at a predefined %. it may be a little or nothing. 
May I quote you: If anyone can predict a figure it will be worth reading but until then they are all acting just like GTP.


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## hodgy (10 December 2009)

Time to move on,vote Gunns....

Western Australian industrialist Gordon Martin has conceded defeat in his bid to take control of Great Southern's timber schemes.

Mr Martin told WA Business News late yesterday that the level of proxy support ahead of tomorrow's vote on his proposal indicated his bid would not attract the necessary support.
"We've taken on the receiver, the banks and Gunns and that's a formidable opponent," Mr Martin said.

"Let's not kid ourselves, we're not going to get there."

The Mr-Martin led Pulpwood Plantations - backed by well known names including the former soccer club owner and fast food magnate Nick Tana and former Great Southern executive director Phillip Butlin - was set up to bid for the schemes.

The fall of Pulpwood leaves one active bid in the market, with Gunns putting its proposal before investors on December 23.


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## preacher (10 December 2009)

Got a great idea how about we get the oldest tree and chain young to it and keep him there untill all trees are harvested  we would only need cheese to feed him Thats what low down rats eat isnt it?


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## bv2726 (10 December 2009)

hodgy said:


> Time to move on,vote Gunns....





I have voted for Gunns - there seems to be no alternative. (Liquidation/winding up of the schemes??)

Anyone heard/had an offer for their Olives?


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## preacher (13 December 2009)

yes apparently olives are doing well and some keen interest in them according to gs hotline BUT who knows the whole thing is a dogs breakfast Any one heard about the slater gordon thing or are they just hot air Also someone tell me who they can sue great southern obviously has no money


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## jiml (15 December 2009)

Preacher, a couple of the directors are being sued by Brian Burke et al  for some $52M based upon the notion that inducements offered to some of the cattle drove owners, but not all, to exchange droves for shares was not kosha and indeed illegal. Unless you are able to snare John Young, which is unlikely, you are right, the company is broke...


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## bv2726 (17 December 2009)

bv2726 said:


> Anyone heard/had an offer for their Olives?





Well, to answer my own question - GTP posted (released to the ASX) the answer. Basically all Olives schemes are to be wound up, as there is no replacement entity. (I.e. No one else wants the Olives so they are a waste of time and money).

Now, does anyone know if a scheme is wound up whether any of the investors get anything? Land value? $1?


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## brty (17 December 2009)

> Now, does anyone know if a scheme is wound up whether any of the investors get anything?




As owners of the trees, you should be able to go and dig them up yourself and remove them from the property, especially the younger trees.

good luck trying to do it though..

brty


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## SDE (17 December 2009)

brty said:


> As owners of the trees, you should be able to go and dig them up yourself and remove them from the property, especially the younger trees.
> 
> good luck trying to do it though..
> 
> brty




Not so, unfortunately.

Just got my letter from MN regarding the 2005 Organic Olives project.

Apparently the land on which the olive trees grow is owned by Great Southern Olive Holdings (in liquidation) and leased to GMSAL (also in liquidation). 

GSMAL then leased the land to the mug MIS punter.

Apparently GSOH can terminate the lease to GMSAL because GSMAL haven't performed maintainace, etc.

In these circumstances, the title of the trees passes to GSOH, which is now controlled by the Banks.

Bend over and take it again.


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## Johnathon123 (18 December 2009)

OK - This seems like a fairly active group. I have a large (for me) investment in 2004 trees on terminable (but not terminated) land. 

Anyway it seems to me that Gunns is the ONLY option we have left YES the only option.

Yet Proxies as of Monday are 20 odd per cent. 

Come on everyone - if you haven't sent it in SEND IT if you know someone get them to SEND IT. Speak to your accountant and lawyers and get there clients sending it.

IT IS YOUR MONEY and INVESTMENT. 

I don't care what you vote (although it seems obvious to me) but lets not let the great Australian tradition of APATHY knock us out before we even get to the gate!!

Herein ends the rant!


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## SDE (18 December 2009)

Johnathon123 said:


> OK - This seems like a fairly active group. I have a large (for me) investment in 2004 trees on terminable (but not terminated) land.




Under the Gunns proposal, those growers with woodlots on leased land where the lease is terminated, get NOTHING.

For these growers, a vote for the Gunns proposal is a vote to make sure you get nothing. 

BEWARE.


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## Johnathon123 (18 December 2009)

Yes I agree - As i read it - that is the result.


BUT

There is no other proposal that I know of. Therefore not voting for Gunns is a guarantee you will get nothing isn't it?

The only benefit is that everyone goes down with you. 

Don't get me wrong this sucks, and if there was something else (like Black) then I would be all for it. But I don't see we have a choice here!

Correct me if I am wrong because I would rather have choice!


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## bv2726 (18 December 2009)

Johnathon123 said:


> ...
> 
> There is no other proposal that I know of. Therefore not voting for Gunns is a guarantee you will get nothing isn't it?





I have trees on terminated (ex leased) and bought land as well. I voted for gunns for both...at least having Gunns looking after whats left of my trees means I have a "chance" of getting "some" money back...one day...maybe.

If not, its over. (Like my Olives as I found out yesterday).


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## SDE (18 December 2009)

bv2726 said:


> I have trees on terminated (ex leased) and bought land as well. I voted for gunns for both...at least having Gunns looking after whats left of my trees means I have a "chance" of getting "some" money back...one day...maybe.
> 
> If not, its over. (Like my Olives as I found out yesterday).




bv2726

If your woodlots are on leased land where the leases have been terminated, then the Gunns proposal means that it is all over for you.

If you vote yes to the Gunns proposal, you are voting to get nothing. End of story.

If you vote no, you will not be any worse off, and might get something should, in the very unlikely event, another proposal emerge.

Definitely won't get anything (Vote yes for the Gunns proposal) or unlikely to get anything (Vote no to the Gunns proposal).

Your choice.


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## Johnathon123 (18 December 2009)

SDE said:


> bv2726
> 
> If your woodlots are on leased land where the leases have been terminated, then the Gunns proposal means that it is all over for you.
> 
> ...




Yes all true

BUT I would say "very unlikely" that another proposal will pop up or we would have heard about it. Therefore you are very likely to get nothing. The only thing likely to be achieved is dragging down 10's of thousands of people into the same hole you find yourself in (through no fault of your own).

I have an interest in a yes vote (full disclosure) I have a quarter chance of getting some money (I may be being optimistic here) but as I said before I don't see another realistic choice!


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## bv2726 (18 December 2009)

Johnathon123 said:


> BUT I would say "very unlikely" that another proposal will pop up or we would have heard about it. Therefore you are very likely to get nothing.




That's the way I was thinking. I had Olives, Cattle and Trees on leased land and Trees on unleased land.

Cattle - Stolen and I sold the shares for a paltry amount but got "something".

Olives - gone. Over. Leased land. Gone. Lost. 

Trees on leased land - gone anyway (lease has been terminated already).

Trees on unleased land - I can only think to tick Gunns here...and there is a chance (tiny) that I might get some money one day. A hundred bucks? well, thats better than nothing.


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## SDE (18 December 2009)

The Yes v No argument will be irrelevant if less than 50% of the members vote.

http://fw.farmonline.com.au/news/nationalrural/agribusiness-and-general/general/gunns-still-lacks-votes/1707595.aspx?src=rss

I'm voting NO as probably won't get anything beats definitely won't get anything.


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## preacher (18 December 2009)

have it on good authority a few directors areheading to jail john young included by the time this all is over i rang gs hotline 2 weeks ago they said the only certanty is olives are safe MATE what a crock i have one last idea we just buy one tree tie directors and ferrier hodgkson and mcrath nichol managment toit  cover in honey and RELEASE THE FIRE ANTS YAHOOOOOO
Also being in tas i am outa firewood for next winter do you reckon they would let me have my 250000 back in trees for firewood?


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## preacher (18 December 2009)

hey get this bendigo like javelin bought our debt for 33 cents in the dollar WHAT A JOKE Anyone here involved in the kelly class action is it worth it?


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## Johnathon123 (18 December 2009)

preacher said:


> hey get this bendigo like javelin bought our debt for 33 cents in the dollar WHAT A JOKE Anyone here involved in the kelly class action is it worth it?




Bendigo made an announcement that they didn't some months ago. VERY naughty if they really did.  No doubt ASIC will rip them a new one


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## pist'n broke (19 December 2009)

preacher said:


> have it on good authority a few directors areheading to jail john young included by the time this all is over i rang gs hotline 2 weeks ago they said the only certanty is olives are safe MATE what a crock i have one last idea we just buy one tree tie directors and ferrier hodgkson and mcrath nichol managment toit  cover in honey and RELEASE THE FIRE ANTS YAHOOOOOO




Hi preacher, great news! I hope Mr. Butlin is included.
I offer to buy 100 trees out of my own pocket to tie financial advisers to.

As I have more lots on not leased land than on terminated leases, I reluctantly voted yes to Gunns. I do not expect much return though.


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## Johnathon123 (21 December 2009)

*VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE *


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## suhm (21 December 2009)

its a bit late to vote isn't it unless you turn up to the meeting? You had to have sent in your proxy last week.


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## Johnathon123 (21 December 2009)

suhm said:


> its a bit late to vote isn't it unless you turn up to the meeting? You had to have sent in your proxy last week.




NO

Quote from Proxy Form: "For your vote to be effective it must be received by 11.00am AEDST Monday 21 December 2009"


VOTE


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## jiml (22 December 2009)

Having done me dough, I hope Gunns gets up otherwise the banks will sell land the lot asap and create a buyers market. My guess is that Gunns then buy in at bargain basement prices without the impedence of growers. Handy. Of course John Young may pick up a bargain or two...Can proxies be faxed?


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## glendaw101 (22 December 2009)

jiml said:


> Can proxies be faxed?




Sorry Jiml you have missed the boat.
"For your vote to be effective it must be received by 11.00am AEDST Monday 21 December 2009"


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## Johnathon123 (22 December 2009)

Unless he physically turns up tomorrow with the paperwork and casts a real time vote.

Rumour has it we haven't got anywhere near 50%


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## uluru11 (22 December 2009)

The earlier schemes will likely get the 50 % hurdle as GTP liquidators will likely vote YES. But the 2004, 2005, 2006 scheme will struggle to make 50 %. Gunns might call for another meeting if this is the case. It is interesting how the GTP liquidators will play their hand.


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## Johnathon123 (22 December 2009)

My accountant tells me the rumours are that apathy has prevailed. It will be interesting to see any announcement.


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## DiscoStu (22 December 2009)

My accountant was saying that if the 50% was achieved that there might be room for the courts to say that it is in the investors best interest for the RE to be replaced my Gunns and that after (some) time Gunns might get the guernsey anyway...

I'm not sure exactly how it works... but perhaps it's a glimmer of hope...


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## DiscoStu (23 December 2009)

DiscoStu said:


> My accountant was saying that if the 50% was achieved that there might be room for the courts to say that it is in the investors best interest for the RE to be replaced my Gunns and that after (some) time Gunns might get the guernsey anyway...
> 
> I'm not sure exactly how it works... but perhaps it's a glimmer of hope...




I meant to say if the 50% WASN'T achieved there might be room for the courts to say that it is in the growers best interest... etc...


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## pist'n broke (23 December 2009)

Seems 2001, 2002, 2003 did not make it, by a large margin too.
So Gunns may not go ahead at all. Oh well, apathy rules. 

http://www.theaustralian.com.au/bus...at-southern-vote/story-e6frg95o-1225813153806


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## bv2726 (23 December 2009)

pist'n broke said:


> Seems 2001, 2002, 2003 did not make it, by a large margin too.
> So Gunns may not go ahead at all. Oh well, apathy rules.
> 
> http://www.theaustralian.com.au/bus...at-southern-vote/story-e6frg95o-1225813153806




According to this article (posted at 6:29pm 23 Dec 2009), Gunns will get everything...except for one. Or maybe I have read it too fast.

http://www.businessspectator.com.au/bs.nsf/Article/Gunns-to-run-Great-Southern-forest-assets-pd20091223-YZ8FF?OpenDocument&src=hp2&rf=s


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## hodgy (24 December 2009)

Hmmm - good sense seems to have prevailed.
Only 2006 pple to get motivated and sort things out in Jan....and join the living.


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## ardstar (24 December 2009)

smh.com.au/business/great-gunns-vote-seals-deal-20091223-ldd6.html

PS what is happening to the 2007/2008 lots??


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## MugPunter (24 December 2009)

Does anyone know of any bidder interest in the High Value Timber schemes? Gunns weren't interested. I suspect a wind-up


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## Johnathon123 (1 February 2010)

Anybody heard from Gunns? I haven't heard from them at all since they became RE. Heard plenty from Adelaide and Bendigo though


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## Wally1952 (26 February 2010)

Johnathon123 said:


> Anybody heard from Gunns? I haven't heard from them at all since they became RE. Heard plenty from Adelaide and Bendigo though




Reckon we are any better off under this lot!

http://sj.farmonline.com.au/news/na...er-ho-gunns-looks-to-restructure/1761958.aspx

I really think I can kick the cash goodbye, what a scam!


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## irenebrisbane (26 February 2010)

This must be good news month, Wally1952!  Things just keep getting worse and worse.  Had high hopes for Gunns.  We invested in 1998 and 1999 plantations and count ourselves awfully lucky to have received SOME return after 10 years.  Not even close to the outlay, but heck, in today's climate it's ruddy amazing to receive money and not have to pay it out.  As the years ticked over we thought to ourselves, well, at least we'll have the Great Southern money coming in just when we need it!  Funny that.


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## Wally1952 (28 February 2010)

irenebrisbane said:


> As the years ticked over we thought to ourselves, well, at least we'll have the Great Southern money coming in just when we need it!  Funny that.




Yep, same here! I'm retired now and we had enough trees to go on a nice overseas holiday every year for four years. Well, might be enough to fill the tank and head down the beach, if we are lucky!


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## irenebrisbane (1 March 2010)

It sure sucks!  They say there is a sucker born every minute.  Well, there's two minutes accounted for!


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## ardstar (8 March 2010)

so does that mean that this is "game over" for us investors?? just read in the news that Gunns is on their way down...


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## Wally1952 (24 April 2010)

ardstar said:


> so does that mean that this is "game over" for us investors?? just read in the news that Gunns is on their way down...




And down! http://www.theaustralian.com.au/bus...r-reorganisation/story-e6frg8zx-1225857634653

Gee, and I thought maybe the Gunn's takeover was a glimmer of light! This whole debacle is a complete sham!


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## Aggie (14 June 2010)

Hi
Has anybody else received the letter from Gunns seeking unpaid insurance bills from previous years for the Great Southern projects?

Thanks


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## irenebrisbane (14 June 2010)

No, Aggie, although I don't think we have any outstanding.  We have all but given up on receiving any more payments from GSL/Gunns.


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## drsmith (24 April 2015)

The final unedifying chapter of the sorry saga of blue gum plantations which was a financial disaster on so many fronts, including the waste of several billions of taxpayer dollars.

http://www.abc.net.au/news/2015-04-...trees-in-favour-of-pasture/6416450?section=wa


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