Gunns Seeking Investors for New Tasmanian Pulp, Forest Management Company

Gunns Limited said that it has released an Information Memorandum (IM) to a number of pre-qualified international parties. The IM provides details on the proposed creation of a new corporate group to be known as Southern Star Corporation.

Gunns said the IM begins a formal process whereby potential investors are being offered an opportunity to partner with Gunns in the creation of an integrated pulp manufacturing and plantation based forest management company — Southern Star Corp.

Southern Star's principal assets will be a 1.1 million tons per year bleached hardwood Kraft pulp mill in the Bell Bay Industrial Zone of Northern Tasmania and the Tasmanian land and eucalyptus plantation resource currently owned by Gunns Limited.

Gunns' said that it intends to hold a minimum of 51% of the equity of Southern Star, which will be a standalone operation with a separate board of directors who will represent respective stakeholders.

John Gay, currently director and chairman of Gunns Limited, is the chairman of Southern Star. Gay said that he will retire from his position with Gunns, effective prior to the Gunns' AGM in November of this year.

In addition, Timo Piilonen has been named Pulp Mill Project Director for Southern Star. Piilonen has extensive experience with pulp mill projects whereby from 2004 - 2008 he was responsible for the construction and operation of what is now UPM's 1.1 million tpy eucalyptus pulp mill in Fray Bentos, Uruguay.

SOURCE: Gunns Limited
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