GTP - Great Southern Plantations

[wooduk]

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

 

[Grumpy Old Man]

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.

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.

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.

 

[Investor1]

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.

 

[Investor1]

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.

 

[Guff]

"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?

 

[kam75]

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.

 

[ajj]

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.

 

[Guff]

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"

 

[Grumpy Old Man]

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).

 

[Investor1]

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.

 

[ajj]

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?

 

[wooduk]

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]

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.

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.

 

[Investor1]

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.

 

[Investor1]

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]

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?

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]

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]

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.

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]

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

 

[edliw]

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.