TIM - Timbercorp Limited

[brownbag]

URGENT - 1999 INVESTORS - CONTACT GROWER COMMITTEE

Invoices have been sent out to 1999 timber investors, but only about 40% have paid. Of course, they were sent out with a due date earlier than previous years, with often less than a week available for us to pay before the due date. The reason for this is to make it look like we are unwilling to pay, in the hope that they can wind up our project.

The only way the administrator can wind up our project is if they can prove to the court that growers are unwilling to pay invoices. So we must pay our invoices to protect our investment.

Some simple facts:
(1) If invoices are not paid, Korda Mentha may have the right to wind up the projects.
(2) If this occurs, there will still be a small return on investment for growers.
(3) Any unpaid rent/management fees will obviously be decucted from any returns by Korda Mentha.
(4) Therefore there is absolutely no advantage at all in not paying the invoice.

For more infrmation, contact the grower committee. They are the people representing you, not Korda Mentha. You can find their email addresses from the FAQ document on the Timbercorp website (I haven't posted enough to put email addresses in this document, but if somebody else has and can do so, it would be appreciated).

 

[hoppo]

Timbercorp

Hi, I am enquiring about whats is actually happening to Timbercorp. My mum has a holding in it, and she has no idea how it works. She just pays the maintenance as due and writes something off on tax. If it gets wound up on friday does anybody get any money? She was expecting $33,000 on maturity this year, obviously that is gone but they are still sending out bills for insurance on the plantation. Where then will that money go. Tried ringing Timbercorp and they have a recorded message that doesn't give any hints as to one way or the other.Has she completely lost everything and then some?

 

[brty]

From todays Age newspaper......

Mr Korda was asked if the Timbercorp assets would be sold in a fire sale.

He said there was ''significant interest'' in Timbercorp's forestry assets, including the land and trees.

''We should go to market and explore that,'' he said.

That is interesting, it seems the administrator/liquidator is treating the assets of the investors as something he can sell, ie the trees. Surely the owners of the trees have some say as to what happens with their own property.

brty

 

[brownbag]

Hi Hoppo.
Your mother still owns the trees, but the administrator would like to wind up the project and take them away. If that occurs, she will receive some nominal value for the trees, but it will not be as much as it should. It is important that she pays the invoice, because the only way the courts will allow the administrator to wind up the scheme is if investors do not pay their invoices.

See my post just above yours for an explanation. If you need to know more, contact the growers committee.

If she has that much invested in the trees, she should make an attempt to find out as much as possible. Not paying the invoice may cost her in the long run.

 

[Junior]

Hi Hoppo.
Your mother still owns the trees, but the administrator would like to wind up the project and take them away. If that occurs, she will receive some nominal value for the trees, but it will not be as much as it should. It is important that she pays the invoice, because the only way the courts will allow the administrator to wind up the scheme is if investors do not pay their invoices.

See my post just above yours for an explanation. If you need to know more, contact the growers committee.

If she has that much invested in the trees, she should make an attempt to find out as much as possible. Not paying the invoice may cost her in the long run.

I'd be careful providing advice on whether or not to pay the invoice. It's very possible that growers will receive no return. Best to obtain legal advice, Macpherson & Kelley have put together a class action so maybe contact them.

 

[brownbag]

I have spoken to the growers committee and if this lady is in a 1999 project, the situation is very different for her as it is for those in more recent projects.

Just make sure that you contact the growers' committee before making decisions about not paying the invoice. They are there to represent the growers and they are doing all that they can to defend us against the actions of the administrator.

 

[drsmith]

Of possible interest to bluegum plantation investors is the price ITC (subsidiary of Elders (formally Futuris)) has secured for the wood to the end of the year.

http://www.asx.com.au/asxpdf/20090630/pdf/31j9sx9pj579nd.pdf

 

[Ciara Barritt]

There seems to be a lot of confusion about growers rights. For me the best outcome would be to sell the plantations to Gunns and cut my losses.

 

[brownbag]

The following is direct from the growers committee. It indicates the value of our plantations and the folly of not paying rent and allowing our investment to waste away:

There is an average of 190 cubic meters across the whole of the 1999 and 1998 projects.
They range from 180 to 200 cubic meters.
There is an average of 48% moisture content which concerts the 190 cubic meters to (X .52) to 98.8 Bone dry metric tonne per hector
Marubeni are contracted to buy this at $207.40 per BDMT ie 98.8 X $207.4 = $20,491 per hector
41,076 hectors X $20,491= $841,934,000.00
Harvest, haulage and shipping reduce the returns to growers by 60% ie $504,000,000 of work for Timbercorp forestry if they can keep it.
that would leave approx $8,195 per hector for the growers.
$8195 x 41,076 hectors= $336,617,000 return to growers.
They have invoiced $16 million to the 98/99 growers and collected $8 million.
Just $8 million more to protect a $336 million dollar asset.
Sounds like a no brainer
However with misleading and deceptive statements such as
“there is no use paying as the amount invoiced will not cover the cost of rent and Timbercorp is not in a position to make up the difference” Mark Korda at Mondays meeting 29th of June.
The amount invoiced for land rent is $355 per hector.
The major landlords Timbercorp, Wapress, Mirvac are receiving less than $300 per hector.
The small farmer landlords closer to $250 per hector.
How does he substantiate that comment in the context of the INVOICED growers.

 

[Messenger]

"Just $8 million more to protect a $336 million dollar asset.
"Sounds like a no brainer
"However with misleading and deceptive statements such as
"“there is no use paying as the amount invoiced will not cover the cost of rent and Timbercorp is not in a position to make up the difference” Mark Korda at Mondays meeting 29th of June.
"The amount invoiced for land rent is $355 per hector.
"The major landlords Timbercorp, Wapress, Mirvac are receiving less than $300 per hector.
"The small farmer landlords closer to $250 per hector.
"How does he substantiate that comment in the context of the INVOICED growers."

Mark Korda was indeed misleading! Shameful!

 

[Messenger]

5:22 AM, 10 Jul 2009
Stakeholders approve Smorgon, Baillieu Timbercorp plan

According to The Australian newspaper, Align Funds Management – in which both Melbourne families have a substantial interest – is believed to have sought an in-principle agreement from growers to go ahead with a restructure of some of the collapsed agribusiness company’s almond projects.

But the plan to create the world’s second-largest almost plantation business needs the approval of ANZ Banking Group Ltd, the newspaper reports.

“If Align can sign the heads of agreement with the bank in the next 24 hours, we propose to withdraw the proposal to change the responsible entity from the courts,” a spokesman from the Timbercorp Growers Group told the paper.

ANZ and Align have been in talks for weeks, the paper says.

 

[MugPunter]

Well, according to the Korda Mentha letter I received today, the best return I can hope for on my 2003 Eucalyptus prepay is 15% on the buy in (this doesn't include years of high interest loans, maintenance and insurance).

Still, probably better than what I'll salvage from Great Southern...

 

[exgeo]

Timbercorp TIMHB 8.9% SECURED REDEEMABLE BONDS

I received a payment from the administrators (direct credit to my account on 25/3/11) for my TIMHB bonds, bought on the recommendation of The Intelligent Investor. Payment was $A56/bond. These bonds were also known as Timbercorp ASX Listed 2005 Bond.

Details can be found in a letter dated 7th Mar 2011 on the Korda Mentha website ("Bondholders Distribution Letter 7 March 2011"). According to the letter there may also be a small subsequent payment, on finalisation of the wind-up.

Just adding this, as I also own TODHA ("Timbercorp Orchard Trust"/"9.0% DEBENTURE MATURING 15-DEC-2010") and it took me a while to track down which one the payment related to. Maybe my post will save time for other readers, or remind them that they hold this investment, and are due a payment, in case they haven't received it yet.

 

[Judd]

This adds insult to the extensive injury but that is the risk when you go to litigation. And, no, I am not related or associated in any way, shape or form with the Judge who handed down the judgement.

THOUSANDS of investors who borrowed more than $450 million to invest in schemes run by collapsed agribusiness group Timbercorp are likely to be pursued over their debts after the comprehensive failure of a class action against the company.

The Victorian Supreme Court yesterday threw out a claim in which more than 2000 investors sought to set aside loans from the group that financed their investments.

Justice James Judd said the investors had failed to make their argument that they were not properly informed of the risks threatening their investments in Timbercorp's managed investment schemes.

Read more: http://www.smh.com.au/business/timbercorp-case-thrown-out-20110901-1jo5n.html#ixzz1WkPxX7w9

 

[Judd]

These investors have really lost in more ways than one.

http://www.theage.com.au/business/no-new-deals-on-timbercorp-debts-20140411-36hpw.html

Investors in failed forestry company Timbercorp may face bankruptcy if they fail to pay back loans they took out to buy stakes in the company's timber growing schemes.

The High Court on Thursday declined growers leave to appeal a Victorian court decision throwing out a class action brought against Timbercorp, opening the way for liquidator Craig Shephard of KordaMentha to pursue the debts through the courts.

About 3200 investors have outstanding loans and the amount owed has ballooned from $475 million when Timbercorp collapsed in 2009 to about $515 million due to steep penalty interest rates charged to borrowers who stopped repayments.


More..........

 

[Junior]

These investors have really lost in more ways than one.

http://www.theage.com.au/business/no-new-deals-on-timbercorp-debts-20140411-36hpw.html

M&K lawyers stepped in as the 'saviours' in 2010, telling investors that they now have professional legal representation and could stop making repayments on their loans.

More than 4 years on, those same investors now owe ALMOST DOUBLE, as loans have been accruing interest at the penalty rate of around 14%, and of course have been stung with class action fees in the meantime.

IN my opinion M&K put together a weak case, they focussed all their energy on lack of disclosure, and used risks outlined in the PDS as their primary argument. Everyone in the industry knows the list of generic risks in a 40 page PDS don't mean much. There were better angles to take. There were stories at the time about fraudulent behaviour occurring behind the scenes. Timbercorp had a complex organisational structure, with more than 10 companies and many conflicts of interest. Some land was rented and some was owned by Timbercorp controlled entities or related parties.

There was talk of suspicious transactions and land deals occurring between Timbercorp controlled entities. Investors funds apparently weren't being correctly assigned to the particular project in which they chose to invest. The harvest proceed figures often didn't seem to add up correctly.

I don't have proof for any of these claims, but perhaps where there's smoke there's fire.

The cashflow models for the projects were wildly optimistic; financial planners, accountants and investors relied on these dodgy cashflow models to justify investment into schemes. Then Timbercorp Finance would offer 10 year P & I loans at competitive interest rates to fund 100% of initial and ongoing costs of the projects. With huge tax deductions and GST rebates it proved an irresistible offer for many, as you were never out of pocket. A very easy sell for FPs and accountants.

The cashflow models showed that harvest proceeds would mean you were almost never in a negative cashflow situation. Research houses assigned '5 star' ratings to many of the projects. Harvest distributions never lived up to the projected outcomes, but investors didn't really care as their share portfolios returned 15% per annum and easily funded the shortfall. This was the status quo for 10 years, until everything came crashing down in 2009/10 and the schemes suddenly became worthless.

I feel for the individual investors on this one. I hope Korda Mentha plan on negotiating and doing some reasonable deals, otherwise many will lose their family home.

Apologies for the rant, just my random thoughts on the situation.