GTP - Great Southern Plantations

[ThePav]

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.

 

[doctorj]

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?

 

[ThePav]

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.

 

[wooduk]

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?

 

[doctorj]

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?

 

[wooduk]

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.

I am still interested in getting a reply to my 2 cents worth from this previous notice

any takers?

 

[goodie3shoes]

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?

 

[Forenth]

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...

 

[sugar3157]

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...

 

[goodie3shoes]

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.

 

[sugar3157]

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]

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]

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]

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]

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.

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

 

[drsmith]

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]

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.

If you sell your shares this week then you won't have to concern yourself as to what happens next week.

 

[wooduk]

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]

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]

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?