Pulpwood Plantations has received support from a US hedge fund manager as the firm seeks to rescue six of Great Southern’s plantations.
Pulpwood founder and chairman, West Australian industrialist Gordon Martin, said Pulpwood has signed a heads of agreement to sell a 50 per cent stake to Och-Ziff.
The company also received an “overwhelmingly positive” response from growers for its proposal to inject cash and replace the responsible entity (RE) within six of the failed Great Southern plantation projects.
The proposed purchase by Och-Ziff will allow Pulpwood to boost its financial capacity to support all 11 of Great Southern’s forestry projects.
Pulpwood said to growers on 21 August it would inject up to $20 million of working capital if required to support six of Great Southern’s schemes through to harvesting in return for a share of harvest profits.
Pulpwood recommended that growers replace Great Southern Managers Australia (GSMA) with Primary Securities as RE.
“Since writing to growers, over 2000 have responded by registering support for a growers meeting,” Pulpwood said.
“The responses received to date are well in excess of the 5 per cent for each project required to call a meeting at which changes can be voted in.”
Martin said Pulpwood is asking growers to return a power of attorney document so that Primary can call the meeting on their behalf.
“Once this is done, growers will be only four weeks away from a meeting at which they can vote for change, either in person or by proxy,” he said.
McGrathNicol, the receiver and manager of Great Southern, on 7 September was unable to confirm that funding will be available beyond 30 September for all of Great Southern’s pulpwood schemes.
“After that date the Pulpwood Schemes will be unfunded. Accordingly, if a potential replacement RE has not been identified by that date for the relevant scheme we may need to transition to the process of winding up of the scheme, unless investors are in a position to fund the ongoing requirements of that scheme,” McGrathNicol said.
