GTP - Great Southern Plantations

[Forenth]

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.

 

[Forenth]

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.

 

[gorillapolice]

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…

 

[wooduk]

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

 

[brty]

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

 

[doctorj]

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.

 

[brty]

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

 

[doctorj]

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.

 

[brty]

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

 

[jiml]

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

 

[Teddy Bear]

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.

 

[jiml]

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.

 

[gorillapolice]

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'.

 

[cathadfab]

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.

 

[Forenth]

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!

 

[Grumpy Old Man]

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

 

[doctorj]

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.

 

[wooduk]

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

 

[Forenth]

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?

 

[irenebrisbane]

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.