GTP - Great Southern Plantations

[wooduk]

.......................................................................................................

Let's not forget Investor1, I'm sure he/she is hiding in there somewhere!!

Just shows how paranoid they are,

Spoke to my fin adviser,guess what ?,Iam not on her list from gtp as an investor,and no--- Ihave NOT signed my trees to these clowns,plus the book that stupid twit cole mentioned I assume on the loansthat people had and was flogged to the bank of Adelaide after they snipped the invetors,---wait for it

Question to Mr.Cole

If I owe gtp money on the investment and you coveted them and gave me shares,does not that mean that I do not have to pay any monies to whom you flogged the loan book to on the investment that was takenover by? the shareholders of gtp?


Mr. cole please advise what to say to the bank of Adelaide if they want to
test their belief that I would have to pay the balance of the loan.

Mr Cole if I had cattle on land that I leased for the droves would not I expect remuneration on the land in someform of private benefit,seeing that I assume the land was not signed over to gtp?

I would be very grateful if you clarify these issues for me on this forum


:behead:

 

[pist'n broke]

One question I can't make sense of - why did all the directors take salary sacrifice shares payments if they didnt even think that they could ever sell them for more than what they are today?

Question - Are the directors completely deluding themselves paying themselves with worthless scrip? Or do they genuinely believe that they are going to make lots of money...one day????

In my understanding, the directors have graciously granted themselves the option to salary sacrifice for a maximum amount of shares at their individual discretion and the actual share price at the time they may take the option.
That just a few weeks after they have scared or forced project investors to accept nearly worthless shares, at an inflated floor price and a time dictated by GTP.
Some pigs are a lot more equal.

 

[wooduk]

I tend to agree that this is quite plausible.

Here is my situation - if new MIS investors are duped into handing over money this year for trees, especially the feelgood high value timber employing people in the top parts of Australia...then...potentially...my stolen Cattle shares will go up. (As GTP earns some money).

I also have trees with great southern (I was really sucked in)...so I want the company to keep going...and pay me for the trees. When they mature.

So, now, although I hate what has happened...here I am thinking, and in an ironic way hoping, that there is a heap of new investors and great southern are actually successful so I can get some money back.

The High Court of Australia’s ruling in the Sons of Gwalia case early in 2007, which established conditions where shareholders rank beside unsecured creditors in making claims against an insolvent company, was always an unpopular decision in banking circles. Increasingly we are seeing why.

Last week the litigation funder IMF Australia said that it entered into litigation funding agreements with Centro Properties stapled security holders and Centro Retail stapled security holders. IMF will fund claims that relate to alleged breaches of continuous disclosure obligations by Centro and by Centro Retail. Claims will be in the form of representative actions.

IMF also announced that it proposed to fund claims by MFS shareholders, alleging breaches of continuous disclosure obligations, and that it proposed to fund claims by Allco Finance Group shareholders, alleging that AFG breached its continuous disclosure obligations.

A partner at Henry Davis York, Roger Dobson, said the Sons of Gwalia decision would increase the propensity of shareholders to take representative action.

For other unsecured creditors, including banks and finance companies, that means messier, more drawn-out and more costly company administrations. Bankers fear that it will take longer for them to get their money back and there will be less of it.

Dobson said: "The High Court created a new class of claimants. Many shareholders will find themselves in a different position in relation to the assets of the company."

In Sons of Gwalia v Margaretic the High Court overturned the convention that shareholders rank behind creditors in an insolvency. The court ruled that a shareholder in a failed company had the same right as an unsecured creditor to pursue a claim against the company in cases where the shareholder had suffered loss as a result of misleading and deceptive conduct by the company.

Luka Margaretic, an investor, bought shares in the gold miner Sons of Gwalia in August 2004, just 11 days before administrators were appointed to the company.

In 2005 Margaretic filed a claim in the Federal Court based on the grounds of misleading and deceptive conduct arising from an alleged failure by the company to disclose information to the Australian Securities Exchange.

The Federal Court ruled for him. The company’s administrator and a creditor appealed the decision. In 2006 the full bench of the Federal Court upheld the original decision.

The appellants were granted leave to appeal to the High Court. The Court found that Margaretic had a claim that could be proved and then looked at where that claim ranked.

The decision was based on an interpretation of section 563A of the Corporations Act, which says:

Payment of a debt owed by a company to a person in the person’s capacity as a member (shareholder) of the company, whether by way of dividends, profits or otherwise, is to be postponed until all debts owed to or claims made by persons otherwise than as members of the company have been satisfied.

While Margaretic was a "member" of the company, the Court said the key issue was whether the assumed liability of the company to Margaretic was a liability to him in his capacity as a member. The majority held that it was not.

Reflecting the majority view, Chief Justice Gleeson said:

What determines the present case is that the claim made by the respondent is not founded upon any rights he obtained or any obligations he incurred by virtue of his membership of the first appellant (Sons of Gwalia). He does not seek to recover any paid-up capital, or to avoid any liability to make a contribution to the company’s capital.

His claim would be no different if he had ceased to be a member at the time it was made, or if his name had never been entered on the register of members. The respondent’s membership of the company was not definitive of the capacity in which he made his claim. The obligations he sought to enforce arose, by virtue of the first appellant’s conduct, under one or more of the statutes mentioned in the earlier description of the respondent’s claim.

The impact of the decision is that section 563A of the Corporations Act no longer embodies a general principle that in an insolvency shareholders come last.:horse:

 

[Forenth]

It is quite possible.

A discounted cash flow analysis was applied to arrive at the PRESENT net value of each of the MIS projects. Remember, those future dollars aren't worth the same as the dollars you have now.

So yes, your 2000 project are likely to be worth $4700 when it comes to harvest time in 2012 if its present net value in 2008 after the DCF analysis was $2500.

In an accounting sleight of hand, the MIS investors were (mis)led to believe that, in accepting $2500 worth of shares (at a price of $0.50/share) in 2008, they would not be disadvantaged if, in 2012, their shares were still worth $2500 (assuming $0.50/share). After all, this was the basis of the “no disadvantage” test that KPMG, the independent expert applied. This is clearly nonsense.

Given that GTP share price is trading around $0.11, and heading south with no likelihood of a dividend payment, it is unlikely that those who exchanged MIS plantation projects for GTP shares won’t be disadvantaged.

Oh.................Don't bother going to ASIC. Apparently enforcement of the Corporations Act is a responsibility for the MIS punter.

If I am going to get 94.5% of $4700 then I will be getting a profit of around 50%. In a couple of years the future dollars aren't going to be worth much less than today's. GSL's pulled an amazing coup with their somehow valid figures... I think KPMG can do my taxes from now on!

As for ASIC, its a bit like Palpatine in Star Wars Episode 1... "I will MAKE it legal".

I wonder what plans GSL are making to grab more than the 5.5% of harvest proceeds they're entitled to. What extra 'costs' are they going to insert to soak up the proceeds. We need to watch out for that.

 

[SDE]

If I am going to get 94.5% of $4700 then I will be getting a profit of around 50%. In a couple of years the future dollars aren't going to be worth much less than today's. GSL's pulled an amazing coup with their somehow valid figures... I think KPMG can do my taxes from now on!

GSL's figures were never valid. They have somehow managed to issue new capital at $0.50 when their SP is $0.11!

As for KPMG, they would have you believe this is a fair and reasonable deal and "in the best interests of the investors as a whole". Nothing could be further from the truth.

Those who exchanged their MIS interests for shares may find they have to pay tax at the issue price of $0.50, rather than the VWAP. Watch this space.

As it is, those on the top marginal rate will find that they will be further behind when it comes to paying their tax. Even at the VWAP of $0.2845, the tax liability per share is $0.13! That's right, sell your shares at 11 cps and you still have to pay the taxman 2 cps more!

 

[Jackob]

Forenth,

GTP might NOT last to 2012 to harvest your crop at all.

Watch out its cattle farm fire-sale! Almost certain the proceeds won't cover what they have paid for them! Don’t know whether can cover the mortgage at all.

Also Watch out its MIS prospectus sale by 30/6 - anything less than last year’s $300m+ won't make GTP get up from its deathbed.

 

[mikes]

gtp to show profit with their accounting / legal whizzes

defer revaluing land etc. as of course no reliable steady market and of course gtp is a going concern

whiz bang trick to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents which is current market price.

expect friendly auditor will give green pen tick.

at least good news , directors should not renig on gtpgb interest payment as and when due.

 

[gorillapolice]

GP

The initial intention of the investment may have been over 8 years. A lot of MIS investors would have structured their affairs to accomodate this.

Cash flow during the course of the project would cover the tax liability as it became due. Due to Project Transform, the tax liability will now arise in this financial year.

Where do you suggest that the money to pay this tax liability will come from?

Do you pay with cash from other sources and hope that GTP shares increase in value, or do you sell your shares to pay your tax becomes due?

Therein lies the rump, it's really a matter of being stuck between a rock and a hard place - on paper, you've actually lost a considerable amount of the initial investment (the share price today is at $0.10!) and then you've got the tax liability on top of that. GS really have done quite the number on Cattle investors.

I cant follow this argument, gorillapolice.
Accepting this is a long term investment, is it not better to take the paper loss now and invest in something that will maximize your returns for the rest of the period?
If your crystal ball says GTP, stick with it.

I feel like i'm being a little misquoted here. I'm not presenting that as an argument, simply something in addition to consider amid all the panic and fear of what is fast becoming a $0.01 stock.

I personally believe that given that the same board are in control of the company (even after their 'transformation' - I don't know why it wasn't called 'Project We're Capital Raising but don't want investors to know it'), GS folding is an inevitability more than just possibility or chance.

I've been personally against Project Transformation from the get go (I initially thought it would be hard to come across people who were FOR it - I guess I was wrong with regard to Cattle investors!) and now it's obvious as to why.

 

[wooduk]

Has anybody looked at terms of GTPGA and GTPGB?

My read of prospectus in particular Financial Covenant is that holders can redeem GTPGA and GTPGB at full face value if there is a breach of this Financial Covenant. This Financial Covenant is that "the Group's liabilities will not exceed 65% of the Group's assets AND that net assets will not fall below $350 million.". Does anybody know whether the Financial Covenants have now been breached? I personally do not think so as NTA were reported as $627 million for year ending Sep08. However liabilities were $1.083 billion and assets were $1.793 billion resulting in 60% so one of conditions was breached.

If the net assets test is breached one day, holders of GTPGB and GTPGA can seek redemption at full face value. There are $200 million TREES on issue so if holders can seek redemption, company will not be able to pay and hence be insolvent. Do I read this correctly? comments welcome.

--------------------------------------------------------------------------------
This is not financial advice. Do your own research.


I found this comment on 3w's.hotcpper.etc

 

[Jackob]

whiz bang trick to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents which is current market price.

Mikes,

If "whiz bang trick to show extra profit as assets go on books at 50cents whilst shares issued to pay for them 11 cents", then why not let us all push the price to 1c and let GTP show more "extra profit"? LOL!

By the way, GTP share price drops another 1c to 10c now. I reckon it will reach 1c pretty soon.

 

[wooduk]

In my understanding, the directors have graciously granted themselves the option to salary sacrifice for a maximum amount of shares at their individual discretion and the actual share price at the time they may take the option.
That just a few weeks after they have scared or forced project investors to accept nearly worthless shares, at an inflated floor price and a time dictated by GTP.
Some pigs are a lot more equal.

Who cares what they issue,my daughter issued me with $50 thousand on my rental property in Mayfair st,London SW01,and I noww have enough money(script) to buy Marleybone Station,Oxford st London SW01 and still be able to pay the $200 to get of jail.

Now it is time for you to roll the dice,you will need a 666 to get going

 

[wooduk]

Hi,
If you google
costello 4745 sam paton

You get a pdf of submission in 2006 to treasurer on tree farming and mis's.
Towards the end discusses land values and cost of rehabilitation of land , after tree farming.
Answers a few questions regarding likely value of GTP's assets[assuming no panic selling of land].

gtpga and gtpgb

seen the share prices drop

looks like whispers are out that gtp directors are to default on paying non cumulative interest on gtpga and cumulative interest on gtpgb.

I am not the only one that agree's with other forum posts,I urge you forum contributors to read Sam Patton&Associates critical analysis to Peter Costello

 

[Fatcat]

0.098 and heading south.

Does this debacle spell the end for agribusiness investments? Obviously GTP is a shot duck, however what does it mean for their competitors? There must be a huge question market over the industry as a whole.

Fatcat

 

[Forenth]

Hi,
If you google
costello 4745 sam paton

You get a pdf of submission in 2006 to treasurer on tree farming and mis's.
Towards the end discusses land values and cost of rehabilitation of land , after tree farming.
Answers a few questions regarding likely value of GTP's assets[assuming no panic selling of land].

It points out quite clearly that its been known since the 1990's that any land with less than 700 mm / year will only yield up to 160m ³/ha, and that a lot of plantations have been established on land unsuitable for blue gums. I guess that explains the poor yields, GSL didn't have anyone who actually knew what they were doing. Unfortunately obvious now...

Maybe Dennis and Co can use that as part of the negligence or lack of care claim?

 

[Junior]

0.098 and heading south.

Does this debacle spell the end for agribusiness investments? Obviously GTP is a shot duck, however what does it mean for their competitors? There must be a huge question market over the industry as a whole.

Fatcat

FEAs harvest results last year were higher than originally forecast and growers achieved good returns (can't remember the exact figure but it was >10% p.a.)

Timbercorps' projects are a bit of a mixed bag...some are generating reasonable returns and some aren't great.

Providers like ITC, FEA and TFS should do OK going forward as all of their Projects have a 'single premium' option. ie. you make one payment at the start and the ongoing costs are deducted from the eventual harvest proceeds...unlike many of the horticultural and cattle projects where you're hit with annual management fees.

 

[shiraz]

Has anybody looked at terms of GTPGA and GTPGB?
[snip]
If the net assets test is breached one day, holders of GTPGB and GTPGA can seek redemption at full face value. There are $200 million TREES on issue so if holders can seek redemption, company will not be able to pay and hence be insolvent. Do I read this correctly? comments welcome.
[snip]:

The redemption is at face value, though not for cash, but in shares at a discount to the share price at the time of redemption. This means that for every GTPGA (TREES2) with a $100 face value, you get $105.2632 worth of shares, at the VWAP at the time of redemption. So at 10c each, that’s 1052 shares.

I’m not sure how many GTPGAs are out there, but the prospectus intended to raise $75 million. If these are redeemed either because of the breach of debt covenant or ceasing to pay the coupon (which is highly likely) then GTPGAs alone will increase the shares issued by 750 million. Currently, there are around 350 million on issue. We’re talking serious dilution.

I’m not sure what the provisions are in regard to TREES and TREES3, but if they have similar provisions, then at the current price, owners of hybrids will end up owning something like 80% of the company.

The question is, to what extent is that expected dilution already priced into the share price?

BTW, I own GTPGAs, hence my knowledge.

 

[wooduk]

The redemption is at face value, though not for cash, but in shares at a discount to the share price at the time of redemption. This means that for every GTPGA (TREES2) with a $100 face value, you get $105.2632 worth of shares, at the VWAP at the time of redemption. So at 10c each, that’s 1052 shares.

I’m not sure how many GTPGAs are out there, but the prospectus intended to raise $75 million. If these are redeemed either because of the breach of debt covenant or ceasing to pay the coupon (which is highly likely) then GTPGAs alone will increase the shares issued by 750 million. Currently, there are around 350 million on issue. We’re talking serious dilution.

I’m not sure what the provisions are in regard to TREES and TREES3, but if they have similar provisions, then at the current price, owners of hybrids will end up owning something like 80% of the company.

The question is, to what extent is that expected dilution already priced into the share price?

BTW, I own GTPGAs, hence my knowledge.

Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe

 

[shiraz]

Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe

The situation with TREES2 (GTPGA) is an all or nothing affair. At the last trade of $16, if they continue to pay the coupon, you keep getting $3.25 every 6 months, fully franked or grossed up. That's a yield north of 50% p.a., grossed up. If they don't, then you either you get your $105 worth of shares at market value (a return of 600% in 2 months), or the company is in liquidation, with hybrid note holders standing only in front of shareholders. So at $16 each, the market is pricing in an 80% chance that the company will fail, and return less than 20c in the dollar of hybrid debt.

I bought in on the Intelligent Investor recommendation at $75, before the world changed. At $16, they're only for the very hairy chested. You're either history or a legend.

 

[wooduk]

Thanks shiraz,this question intrgued me because intelligent investor said that the T1 andT2 were not connected to the hip with gtp,I assumed it was out there in the company etheral, and was fire proof as gtp stated that they would focus on the core bussiness and that is tree plantations,but now it seems to be focused on giving funny worthless script as though gtp was sovereign state like ---hmm let me see,OH I know Zimbabwe

The High Court of Australia’s ruling in the Sons of Gwalia case early in 2007, which established conditions where shareholders rank beside unsecured creditors in making claims against an insolvent company, was always an unpopular decision in banking circles. Increasingly we are seeing why.

Last week the litigation funder IMF Australia said that it entered into litigation funding agreements with Centro Properties stapled security holders and Centro Retail stapled security holders. IMF will fund claims that relate to alleged breaches of continuous disclosure obligations by Centro and by Centro Retail. Claims will be in the form of representative actions.

IMF also announced that it proposed to fund claims by MFS shareholders, alleging breaches of continuous disclosure obligations, and that it proposed to fund claims by Allco Finance Group shareholders, alleging that AFG breached its continuous disclosure obligations.

A partner at Henry Davis York, Roger Dobson, said the Sons of Gwalia decision would increase the propensity of shareholders to take representative action.

For other unsecured creditors, including banks and finance companies, that means messier, more drawn-out and more costly company administrations. Bankers fear that it will take longer for them to get their money back and there will be less of it.

Dobson said: "The High Court created a new class of claimants. Many shareholders will find themselves in a different position in relation to the assets of the company."

 

[SDE]

The situation with TREES2 (GTPGA) is an all or nothing affair. At the last trade of $16, if they continue to pay the coupon, you keep getting $3.25 every 6 months, fully franked or grossed up. That's a yield north of 50% p.a., grossed up. If they don't, then you either you get your $105 worth of shares at market value (a return of 600% in 2 months), or the company is in liquidation, with hybrid note holders standing only in front of shareholders. So at $16 each, the market is pricing in an 80% chance that the company will fail, and return less than 20c in the dollar of hybrid debt.

I bought in on the Intelligent Investor recommendation at $75, before the world changed. At $16, they're only for the very hairy chested. You're either history or a legend.

Assuming GTP pay the coupons, the Trees2 holders will get to acquire shares at just over 1 cent each if the SP maintains its current level. Woodie, this is your chance to pay the price you believe the company is worth! Or was that 1 cent for the whole company?