Article from Woodbiomass.com
Gunns rubbishes reports of shareholder unrest and Australian pulp mill derailment - By Cameron wilson, news editor, ppi asia, risi March 25, 2010
SHANGHAI, March 25, 2010 (RISI) - Gunns has announced its 1.1 million tonne/yr pulp mill project in Tasmania, Australia remains on track despite reports it would be derailed if shareholders oust the company's chairman.
Local media has reported that a substantial group of shareholders had demanded that chairman John Gay and other senior board members step down following the firm's calamitous 98.7% profit drop last month.
And soon thereafter a leading national paper quoted Gay as saying that the company's market pulp project at Bell Bay in Tasmania stood no chance of going ahead if he was forced out.
But Gunns spokesman Matthew Horan told RISI that not only had Gay's remarks on the future of the pulp mill been taken out of context, but also that the reports of a shareholder revolt were unsubstantiated.
"There is no evidence for it; none of the institutional shareholders have been named. In a situation like this if you are a shareholder you come out and say whatever it is you want to say, but no one has done so," he said.
Horan added that the issue had nothing to do with the pulp mill project, which he emphasized was ready to begin construction as soon as funding was secured.
Gunns is still seeking a partner to help finance the Bell Bay facility, which would produce bleached hardwood and softwood kraft. It was originally scheduled to start up in 2008.
Martin Lawrence, a senior analyst at corporate governance consultancy RiskMetrics, expressed some surprise about the media flap.
"Usually these things are resolved behind the scenes before any formal action is taken," he said. "The fact that this is in the newspapers is a sign of extreme frustration on the shareholders' part."