Gunns recently announced it no longer believed its plan for a new Tasmanian pulp mill was “probable to proceed”. After seven long years, the controversial mill now needs an Act of God to go ahead. So where did Gunns go wrong? How did the once-mighty forestry company end up in such dire straits?
No longer are there unencumbered assets of sufficient value to allow a joint venture with an enterprise value including plantations of $3 billion, to proceed with Gunns as a JV partner. Gunns’ measure of net tangible assets (NTA) is now negative.