News

October 29, 2008

Great Southern Plantations Struggles With Markets And The Tax Man

Our Agri Expert In Oz

Buying back the farm is not easy in a financial firestorm, as Australia’s biggest forestry management company is discovering. Two months ago Great Southern Plantations (GSP) unveiled a major restructuring plan. The essence of the proposal, which requires approval from investors in eight separate tax-effective schemes, was to convert GSP into a much simpler and more transparent company which would not be subject to the whims, and damaging legal rulings, of tax authorities. Great idea. Lousy timing.

Since the grand plan was unveiled on August 26 the share price of GSP has sagged alarmingly, triggering one re-pricing, and perhaps setting the scene for another downward re-pricing, or a return to the drawing board to try and devise a fresh plan. On the morning of the original announcement, GSP opened trading at A$86 cents, and rose to A95 cents. The initial upward move was largely because management said the complex re-structure would see new GSP shares issued to investors in the eight...