GTP - Great Southern Plantations

[hodgy]

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

 

[slim pickins]

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

 

[David Mond]

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.

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

 

[Forenth]

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.

 

[slim pickins]

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

 

[irenebrisbane]

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

 

[drsmith]

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.

 

[brty]

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

 

[bv2726]

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...

 

[Forenth]

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?

 

[irenebrisbane]

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.

 

[Forenth]

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.

 

[Wally1952]

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.

 

[irenebrisbane]

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.

 

[Forenth]

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.

 

[Forenth]

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.

 

[bv2726]

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?

 

[Aussiejeff]

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?

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....

 

[gorillapolice]

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.

 

[slim pickins]

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.