GTP - Great Southern Plantations

[edliw]

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

 

[Forenth]

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?

 

[wooduk]

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

 

[Belrose]

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.

 

[Belrose]

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.

 

[Forenth]

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...

 

[Forenth]

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.

 

[Forenth]

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.

 

[wooduk]

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

 

[Belrose]

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.

 

[edliw]

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??

 

[wooduk]

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.

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?

 

[Forenth]

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.

 

[edliw]

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"

 

[Forenth]

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.

 

[edliw]

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

 

[edliw]

PS Forenth
Have never been offered a coppice crop in any of the projects involved with so far, they are keeping them for themselves.

 

[Forenth]

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.

 

[Belrose]

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.

 

[Jackob]

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?