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pch
12th-October-2007, 07:11 PM
jackob..

I'm not an accountant, and I'm posting this based on no research, but it seems to me there are ways around this..

eg amortise revenue over say 2 or 3 years by changing the 'management fee' structure
restructure so that say, a wholly or partly owned subsiduary does the 'tree husbandry' and charges a fee to the MIS promoter

your thoughts? The 70% thing hasn't really bothered me that much actually.. I'm more worried about all that money spent on cattle :-)

Out Too Soon
13th-October-2007, 02:16 PM
I'm no accntnt but I have a good memory & despite the never-ending doom predictions on this co. they're are still around & surprising the doomsayers. I look forward to the dividend this December & will continue to profit from the sp gyrations.;)

Rainmaker2000
27th-October-2007, 07:30 AM
I'm not sure how forthcoming GTP has been so I'll just post this message from the SHV thread.........

Hi guys....sorry to fill up the post box...just did a little more analysis....the $4 million before tax, as in 10% of total profit is ONLY for the company owned acres........that is, SHV manages about 35 000 acres (40k next year) and the $4 million dollars is only water for 3300 acres which are companies owned and that's still skimping on water apparently...the 'investors' are responsible for the rest......I can now understand why that question marks the viability of the entire sector at least for this year........that's $1212 dollars an acre extra for water which no investor and financial advisor would 'foresee' when they made the 'investment'........just this year would kill the aenimic 4% return which these guys pray for when they avoid tax.....that is a very interesting development and explains why TIM has been dropping and SHV although I don't see it as such a negative for SHV as there are positive elements of this....note that the chronic water shortage probably does not affect GTP forestry much at all

pch
29th-October-2007, 10:14 AM
Saw this today - bit late I know..

http://www.abc.net.au/rural/news/content/2007/s2064181.htm

So how would they pay for this I wonder?

Out Too Soon
7th-November-2007, 02:13 PM
Nice little break out yesty but the buying volume looks quite thin today.
Now they have a 50% interest in a wood chipping mill I feel I no longer want to be associated with them. :(
Have to wait for a real up trend to dump them though. Guess patience is the word.

barnz2k
7th-November-2007, 11:34 PM
i noticed this too. I think if they make another break towards $3 im gonna sell. Hopefully at about even or slightly above entry..
I just dont have support for them now, even their fluctuations are less and just stagnating around the low 2s.

pch
19th-November-2007, 11:47 PM
Can you imagine the fallout if this is comes to pass?

http://www.businessspectator.com.au/bs.nsf/Article/DAscenzos-high-rolling-gamble-93QRP?OpenDocument

barnz2k
20th-November-2007, 12:49 AM
pch - please correct me cause I dont fully understand this.

Basically once this goes through court, either the Tax Commissioner wins his 'adaption' of the law - and basically concretes this whole deal about tax structures etc which are causing havoc on the industry and causing investors to sell, or he LOSES and has to pay back a whooole lotta cash to the companies fighting against him? As his speculation has caused their share price to fall?

So if he does lose, could we see money heading back into shares like GTP, and a nice cash deposit made to the companies themselves?

And if he wins, is this going to bring forward the downside by confirming the outcome sooner than expected?

Rainmaker2000
20th-November-2007, 07:25 AM
I'm pretty exposed to Timbercorp which mainly does agriculture projects, not forestry and Select..I used to own GTP....My view is that the market has already priced in the abolition of MIS...

Thus if they lose the case, I don't expect much negative share action......I'm not sure if you've read the legal opinions (me being a lawyer too) am of the firm view that the ATO interpretation will be thrown out. Simply because these companies just use the same deductibility provision everyone else does. It would be an interesting judgement in favour of the Commissioner.....

I would not assume that if the Commissioner loses, then MIS is here to stay......there will be a positive share price reaction.........but the Commissioner will then just ask the Government to legislate his new view just as the positive view on forestry will be legislated.........

With the new labour government in office, they will not decide to do this quickly.......and since this industry creates a lot of jobs but is not good for average farmers, it will certainly be very interesting all round....either way I see plenty of upside but not so much in GTP

Jackob
26th-November-2007, 04:36 PM
This year's annual report is out today.

EPS (diluted) = 20.7c down 49%
DPS (whole year) = 11c down 3c

They are in stark contrast with the following "brokers' consensus" (given by COMSEC).

----2006 2007 2008
EPS 41.6 43.7 46.4
DPS 15.0 15.0 15.0

pch
26th-November-2007, 06:03 PM
i don't know whether you noticed Jackob, but a lot of the things we speculated would happen as much as a year ago has come to pass.. :)

That's just from reading the presentation - haven't gotten round to the nitty gritty of the actual financials yet..

Rainmaker2000
26th-November-2007, 09:43 PM
What particularly interested you Pch.........I found GTP's future plans to be basically identical to TIM's although it is clear that GTP is far more advanced.....for example, their new investment products are presented to be far more earnings accreditive than their MIS projects.....while this is a tough proposition to believe, I always thought there was a chance that once these guys went 'back to the drawing board, they could come up with some better investment products.......after all, lots of 'farmer Joes' make exceptional rates of return off the land and GTP has more economies of scale than them........

I always thought there was a lot of value embedded in this sector and there are now some signs that people are realising that these companies have been discounted far too much.....for example, check out the new agricultural fund that is being floated on ASX.......agriculture funds management is now becoming a growth industry of sorts and GTP and TIM already have a large proportion of the finite land assets

pch
27th-November-2007, 09:31 AM
Hiya

I also think GTP is in much better shape than TIM, not only for the asset base, but also the minimal exposure to Murray/Darling water issues. TIM also have had a pretty crappy operational cashflow right now whereas GTP's has been good. I've always been in favour of them buying their land, despite the debt it takes, because all they need to do is sit tight and within 5 years, land rotations take a massive chunk of capital expenditure away.

But, in the meantime they have a lot of debt, margins tightened up because costs increased and the regulatory framework changed around them. Last year the $1 million super thing would have hit them of course, but they strangly don't mention the income tax rates where now you have to earn a lot of money before being taxed at the highest rate.

But all that aside, Jackob and I at various times discussed GTP's debt. Took me a while to get what he was saying, but in the end we concluded that it was inevitable they restructured their upfront free - which they now have increased.

I notice they also are going to amortise the income they recognise, probably to get around that 70% rule. That was also predicted.

I also suggested they will probably change the way they revalue their land to book income that way - they have dropped the discount discount rate and booked some 30+ million of income from this (and they suggest the value they care carrying is conservative for some of those land assets)

There are other things too, but it would take too damn long to write about :-)

I am pleased they reduced the amount of cash they burned as I expected them to need another $300mil by now. Instead, they drew another $50mil from their bank facility and extended their credit by $100mil. Aha, but EPS is half what it was :-)

Still, despite me saying all of this, I think it will be quite a while before GTP will have any significant rise SP. Investors and funds are much more short term oriented than GTP's eventuall payoff time.. I thought this report was so-so, for all of the positive things, there are things that make you go hmmmm :-)

Jackob
27th-November-2007, 03:30 PM
Pch,

Yes, we did discuss GTP’s debt and related issues at depth, and concluded that GTP would have to increase its pulpwood project upfront fees, otherwise it wouldn’t survive, as its projects were in a state of hidden chronical loss.

Now, thankfully, our views have been graciously confirmed by GTP announcements that it will “restructure” its pulpwood projects by raising the upfront fee by 47% from $9090/ha to $13,400/ha. :)

A 47% jump of application fee to $13,400/ha! Well, it’s of cause seemingly good for GTP, but is it also good for investors? How much returns should still be expected from schemes? Would other MIS managers (such as TIM, GNS ...) also follow GTP to raise fees? What if they wouldn’t? In that case, would anyone still rush to buy GTP's before June 30 next year? … I reckon uncertainties and dangers are obvious.

It also reminds me other questions: How was the final results of GTP’s 1996 pulpwood project? Anyone knows anything of it? Still keeping "topping up"? Or just leave as it is?

The other item of GTP’s “restructure” is reducing the CAPEX from $7000/ha to $5500/ha for the pulpwood projects. It looks like as if GTP has changed its strategy from buying lands at $7000/ha … to … renting? Just as TIM has been doing for years and now for GTP to follow? A ~$500/ha pa rent (~7.1% on the capital of $7000/ha) over 11 years just makes $5500/ha?! If this change is true, it can again confirm the failure of GTP’s old strategy. :(

… More might follow later …

Rainmaker2000
27th-November-2007, 04:16 PM
I do prefer the TIM exposure to GTP, but I agree their operational cash flow is appalling at moment, verging on troublesome...........I like TIM cause they put most of their efforts into their long term agreements (mainly 23 yrs) which produce their 'annuity style' income and cause they do 'real crops' mainly.......next years annuity income will be $300 million and its only just beginning, which is pretty significant since their currently capitalised at $550 million......TIM is also moving to a 'less capital intensive' business model.........I honestly think the 'investors' will be there for these products whatever they charge, mainly cause they pay off the 'advisors' so much

pch
27th-November-2007, 07:38 PM
Pch,

The other item of GTP’s “restructure” is reducing the CAPEX from $7000/ha to $5500/ha for the pulpwood projects. It looks like as if GTP has changed its strategy from buying lands at $7000/ha … to … renting? Just as TIM has been doing for years and now for GTP to follow? A ~$500/ha pa rent (~7.1% on the capital of $7000/ha) over 11 years just makes $5500/ha?! If this change is true, it can again confirm the failure of GTP’s old strategy. :(

… More might follow later …

Jackob you always give me too much homework to do! :-) I never looked at this bit..

Lets make a bet. If they get through to 2011 or 2012 where their major rotation kicks in (co-inciding with when their capitalised debt is due and paid by that saving), then you owe me a beer! :-)

Whether I care by then is another story!

Jackob
28th-November-2007, 12:50 PM
Hi Pch, :)

I would never mind to buy you a beer or so, but I suspect the GTP pulpwood business game may wind up soon.

I reckon the decision of raising the application fee by a hefty 47% to $1340/ha would never be taken easily, if John Young had not been prepared for a possible wind-up in his mind.

As we discussed months before, a genuine pulpwood project could never survive on a $9090/ha application fee when the land price had surged to $7000/ha or more. I reckon that a $1430/ha level fee would be the minimum to survive. So if customers are scared off at this minimum level, why not simply let them go?

On the other hand, the returns on pulpwood projects are never good, and GTP has NO money to “top up” them any more. Even if the fee were kept at $9090/ha, how many investors would still keep coming any way?

So, why not let the game be over? Alas!

The Captain
28th-November-2007, 01:50 PM
Well Jackob, maybe you should change your name to doom and gloom. You never have anything good to say about this company. I am never suprised to read your comments, but have you ever seen their plantations, yes have you done any real work and visited the plantations. If you had you would have seen a huge difference in the size in the trees in the plantations over the years. Later projects are 3 times the size of earlier projects at the same point in the projects life. While earlier trees did not have many of the advantages of the latter projects ie genetic selection.GTP did the right thing in topping up earlier returns. They wont in the future as there is no need to. Last results for 2006 returns to growers looks to be about $4300. What will we see for the future? maybe by 2009 - 2010 we should see returns of about $7500. Not a bad little earner. What about the change in Government and now the guarantee of carbon credits return to investors, another very positive aspect. And the test case should also prove to be in the industry's favour. I agree that at the moment s.p is down and may not change for some time and the short term future does not look positive for s.p. growth, but GTP is here to stay and will be a very profitable company for the future.

Rainmaker2000
28th-November-2007, 03:21 PM
Captain, it's good to hear some observations about the actual growth of the trees, but your input in relation to Jackob is unwarranted..........GTP's been a dishonest company and its whole product proposition to its investor is, well, not totally legit is it............I think its totally legitimate to take 'a glass half full' approach to the company and management.......although I do see value in the sector but GTP is my last pick

The Captain
28th-November-2007, 03:49 PM
GTP's been a dishonest company and its whole product proposition to its investor is, well, not totally legit is it............I think its totally legitimate to take 'a glass half full' approach to the company and management.......although I do see value in the sector but GTP is my last pick

Rainmaker, I am not saying that GTP is the best thing since sliced bread. But that there are positives and its not all doom and gloom. If you want doom and gloom check out Queensland Paulownia. In the not to distant future we are going to hear all about this failed company and the really dishonest part of MIS. There will be lawsuits over this one very soon and I suspect that it will change MIS forever.

Jackob
28th-November-2007, 08:51 PM
Hi Captain,

I saw what you wrote in your “signature” of your “profile”, (quote) “I'm just a beginner. Dont take me too seriously…”, so I won’t take your words all too seriously. But I am still interested in the following.

“…Later projects are 3 times the size of earlier projects at the same point in the projects life. … Last results for 2006 returns to growers looks to be about $4300.”

First I reckon the 2006 results should not be the latest by now. The latest should be the 2007. The pulpwood projects were initially of 10-years, but delayed for 1 year and all become 11 years. Growers hand in their money every year by the "June 30" deadline and should get the returns around the same date in 11 years. Today it is already 28/11/2007. Why haven’t we heard anything about the 2007 results?

Two possibilities.
(1) The project might suffer a further delay and probably have become a 12-year project. (But why no announcement?)
(2) The 2007 results were so poor that no insiders want to talk about.
(3) Or what else?

As to the earlier results of 2005/2006, we had very good discussions on this thread about a month ago from posts #975 (5/10/2007) onwards. If you go back to read those posts again, you may find that the “earlier results” were all dramatically “topped up” (or “propped up”) by up to 220%.

So even if it is true that “later projects are 3 times the size of earlier projects”, the future returns would still probably not be more than the returns in earlier years (after “propping up”).

Your 2006 returns number “about $4300”, I think refers to the $3000/lot initial investment, and it only represents a meagre 3.3% p.a. return over 11 years, barely matching the inflation. At this return rate, all the investors using a loan would lose money badly.

Alas!

pch
29th-November-2007, 05:15 PM
Captain

In relation to your post on Jackob's negativity to GTP, what is preferrable?

Nothing but fanboy ramping eg "its all blue sky from here" is of much less value than someone who is bearish and prepared to tell you why, to a level of detail that allows you to make much more accurate decisions.

For that reason, I really like the GTP thread. Jackob and Portfolio in particular encourage me to keep researching and justifying my views.

regards

pch

p.s GTP is an excellent company to use to learn how to read annual reports :-)

Portfolio
29th-November-2007, 07:29 PM
Jackob,

I think the $4,300 figure is the return from the 1996 project (delivered in 2007). So i suspect the answer to your question is #2 - its bad so they dont want to talk about it. Not sure where i read that though and they should really be disclosing this stuff to the ASX. Pretty sure there is still "topping up" in that as well but dont quote me on it.

If anyone else out there still thinks MIS is viable after companies have to actually pay out returns (yes they get to hide things for the first 11 years and then a few more if they "prop up" returns) look at their latest acquisition (ASX announcement dated 05/11/07):

They bought 14,700 hectares of hardwood plantations for $47.3 million. And the plantations were established "between 1993 and 2003".

Assuming an average planting date of 1998 this means they have effectively bought 44,100 (14,700*3) "year 9" woodlots for $47.3million. Dividing $47.3million by 44,100 equals $1,072 which means they have bought "Year 9 woodlots" for $1,072. Now given they sell a year 1 woodlot for $3,300 and sell them based on research which somehow predicts 7% returns (with alot of disclaimers). Assuming "woodlot investors" expect a return (surely they do and would expect at least 7%) they would be expecting something around $6,000 after year 9.

AND:

1. They have now increased the upfront fee making the hurdle rate higher.
2. I have assumed that the 50% interest in the woodchip mill that was in the same transaction is worth nothing but was instead just a smokescreen to stop this type of analysis.

I realise that this is a very crude calculation but I think people get the point. Hows that for cynical. Now you will think Jackob is a bull on GTP.

pch
30th-November-2007, 10:00 AM
Yes Portfolio the lack of transparency totally sucks. On one hand they state via their provisions that they do not expect to need to prop up returns again, but they do not publish any .. hmm whats the word ... 'density estimates'.

But the proposed part of the legislation that makes MIS schemes 'tradable' after 4 years? was I think designed in part to alleviate this.

One can look at it this way.. Their argument was that originally management of the planting was outsourced in the early days and now via improvements in land selection, preparation and genetic stuff, the trees are on steriods and bigger, fatter and therefore much more pulp per ha.

There is absolutely truth to this.

But by Jackobs figures (prop up by 4.6mil), you would require the pulp yeild per ha to triple, assuming prices are flat. I'm sure I spied a graph in their roadshow showing an increase in price for the resource but it was not huge so lets be fair and assume that if yields increased by a multiple 2.5 you wipe out the 'top up' factor.

So this begs the question, will the yield improve by 250% between 1996 and 1997?

I have a feeling that current projects being planted now could absolutely meet this sort of target and then some. But I think that 1997 would be nowhere near it. Each year probably improves upon the last..

regards

pch

p.s The more I think about it, the more GTP reminds me of characteristics of a LIC like Argo investments. Buying below the NTA and selling when it is over a certain premium is perhaps not a bad way to play GTP.

Jackob
1st-December-2007, 01:06 AM
:)
Pch and Portfolio,

Thank you both for your comments.


I think the $4,300 figure is the return from the 1996 project (delivered in 2007). So i suspect the answer to your question is #2 - its bad so they dont want to talk about it. Not sure where i read that though …

I agree.

I found the 2005/2006 returns (for 1994/1995 growers) at

http://www.great-southern.com.au/default.aspx?MenuID=418

They were both the same of $5,148/woodlot (after “propping up”) on an initial investment of $3,300/woodlot (including 10% GST) over 11 years. So the compound returns was both of ~4.1% pa.

Thus the $4,300 figure indeed looks like referring to this year’s return on an initial investment of $3300/woodlot (not $3,000/woodlot I used - sorry). The annual return was then a mere ~2.4% pa (after a likely “propping up”). This 2007 return is bad, so few insiders want to talk about it and few outsiders would know.

Now let’s assume that the later/future harvests will produce 3.2 times as much woodchips as the 2005 harvest. Then they will reach 4.1% pa return rate, the same as 2005 (in which year the returns were “propped up” by 220%).

Now we will have a 47% increase of application fee from 2008 onwards, the woodchip crops will need to be (3.2 times)*1.47=4.7 times as big as the 2005 crop to reach the same 4.1% return … but this 4.1% pa return will still be too hard to attract new growers.

… If we need produce a decent 10% pa return, then the woodchip harvests need to be raised to 8.6 times of the 2005 crop…



... latest acquisition (ASX announcement dated 05/11/07):

They bought 14,700 hectares of hardwood plantations for $47.3 million. And the plantations were established "between 1993 and 2003".

So these lands are worth $47.3m / 14,700ha = $3,218/ha, including trees on them and a 50% ownership of a woodchip mill. Although these lands are under “profit a prendres” with 28 year leases (14-24 more years left), it still sounds unbelievably cheap!

Based on these data supplied in the announcement (5/11/2007), I estimated that the true value of the clear freehold lands should be not more than $3500/ha or so, which is about only half of the $7000/ha price GTP used to purchase the “pulpwood” lands.

Why so cheap? I suspect this is because of a sudden drop of demand on pulpwood lands by GTP, TIM and other MIS companies in last 12 months or so. This may be consistent with the earlier complaint in the rural area on the skyrocketing land price due to those MIS buying. This may also be confirmed by recent independent valuations on ANE’s lands of ~$3000+/ha (according to my memory only, in ANE’s announcements fighting against GNS’s takeover).

A cheap land price will help to reduce GTP’s CAPEX, but it would cause other serious problems, such as reducing NTA and earnings (land appreciations/depreciations have been already included in earnings).
:(

Portfolio
1st-December-2007, 08:53 AM
Hi Jackob,

From my reading of the announcement they havent bought the land - just the trees on them. Hence my calculations above. From the wording "to use for its own resource as well as for use in its managed investments projects" I expect they will just throw the proceeds into the pool to continue "propping up".

pch
2nd-December-2007, 12:58 AM
Gents, can you check my math?

Taking into account the $5148 top up return to investors.. and based on the bone dry tonnes price of $180 would mythically yield 28 tonnes per woodlot

5148/180 = 28.6

then

"Gross proceeds (calculated by multiplying the volume produced in cubic metres by the basic density of wood divided by 1,000, adjusted for physical losses), to calculate bone dry tonnes, which is then multiplied by the prevailing woodchip price for the relevant plantation hardwood species"

"Basic density for Eucalyptus globulus at harvest is in the vicinity of 550kg/m3"

28.6 / .55 = 52 m3

Now even before we factor in the fact this is not the 'real' yield, but a mytical yield assuming the top up never needed to take place.

But to my uber untrained eye, even this 52m3 mythical volume seems smallish for a 330 square metre woodlot?

Now all we need on this forum is some tree husbandry expert that can tell us how much volume you would get out of a big, thick 11 year old Eucalyptus tree. ;) Rainmaker don't suppose you are a lawyer come tree hugger? :D

Jackob
2nd-December-2007, 04:45 PM
Pch,

Your math is correct except the size of 1 woodlot is 0.33 ha, which I reckon should equal to 3,300 m2, not only 330 m2 (1 ha = 100m x 100m = 10,000 m2, am I right?). So to produce the required 52m3 bone-dry-tonnes woodchips would be even easier.

But the question is that, if the lands could make at least $5148/woodlot return in each 11-year rotation, how would they be leased out at only $3218/ha, or $1073/lot, on 28 year contracts (~18 years on average still left) including ~5-years-old trees already planted on them. Wouldn’t the sellers all be mad?

No. My judgement would be that those lands leased out for ~18 years at only $1073/lot could never produce $5148/lot in one round of 11 years. They could only make ~$1000/lot at most due to their poor qualities.

Then what to do with them? Well, I would suggest GTP doing nothing except selling them to growers at $3000/lot immediately and get ~$2550/lot cash after deducting ~15% commissions. Then put the $2550/lot directly into banks to reduce debts with 10+% pa interests. Thus in 11 years this ~2550/lot money would become $7275+/lot, from which after paying growers $5148/lot, the $7275/lot - $5148/lot = $2027/lot left would become GTP’s real profit.

Isn’t it good? Can’t it be called “Maximum cash flow at Minimum/zero cost” or “Doing nothing is better than doing anything - Stupid!” Hahaha! :)

pch
2nd-December-2007, 08:07 PM
duh pch bad maths srikes again!, but yes you are right if I'm whinging about volume 52m3 derived from 330 m2 then i really wonder about 3300 m2 :-)

I don't quite follow your post (you're talking about the most recent aquisition? I haven't even considered that sorry).

I'm now interested in volume generally, so knowing how much volume you could expect out of a woodlot would help answer the topping up issue as well as the real physical limit to yield per woodlot.

Its just that I don't think that threes spontaneously got 3 times thicker from 96 to 97, irrespective how good their staff were when they insourced it. But over 10 years? based on my calculation those first 3 years were particularly skinny trees and it *appears* that there is considerable room for increased densities.

Jackob
2nd-December-2007, 10:26 PM
Pch,

I indeed thought you were talking about the acquisition, but you were not! Sorry for that.

How much woodchips a woodlot can produce is a question which defines whether the growers’ investments are good or not. Obviously, even a $5148/lot return on a $3300/lot capital in 11 years (4.1% pa), is not good enough for most investors (the problem was that they didn't know it beforehand).

As to the other question of GTP’s own short/medium-term survivability or profitability, it is determined by whether its income, or growers’ application fee ($3000/lot for the pulpwood project) can cover all GTP’s cost (including, commissions and promotions, seedlings, tree husbandry, office overhead, tax, debt interests, and etc). According to our discussions earlier, the answer was “NO” to the question. Luckily, this answer has now been confirmed by GTP’s decision last week to increase application fee from $3300/lot (including GST) by a hefty 47% in 2008.

Apparently, GTP has to put its own survivability ahead of investors’ profitability. Survive the company first, then investors' returns would only be possibly shown 11 years later (who cares?!).

pch
3rd-December-2007, 12:53 PM
Apparently, GTP has to put its own survivability ahead of investors’ profitability. Survive the company first, then investors' returns would only be possibly shown 11 years later (who cares?!).

Thats precisely what I as heartless nasty shareholder expect them to do! :cool: Did I mention I have never actually invested in their retail products?

Operational cashflow figures from the last 2 years suggest they have been doing okay managing expenses - compare to Timbercorp.

I agree with your assesment I think they are now likely leasing, but I wouldn't see them switching to leasing as a failure in strategy as such because they will still greatly benefit from this going forward. Although they will still have a requirement to lease land, much of it will come via rotation which should improve their ROE.

For me, it all comes back to volume per woodlot. Once you know that, you can put the whole propping up issue (and therefore ongoing sustainability) to bed.

Maybe my view of potential volume is somewhat clouded by a 20m high massive lemon scented Eucalyptus I have in my backyard :-)

Jackob
4th-December-2007, 12:28 PM
Judging by the fact that GTP has to raise its pulpwood MIS application fee by a lumpy 47% to increase its “income”, the project must be in a quite difficult financial situation.

On the other hand, such a dramatically increased upfront fee would have to scare off investors, thus the real intention of GTP might just be to wind up its money losing pulpwood business.

Jackob
8th-December-2007, 11:18 PM
An article in The Age today:

http://business.theage.com.au/agribusiness-tax-policy-the-stuff-of-pure-fantasy/20071207-1fqt.html

barnz2k
9th-December-2007, 04:38 AM
im trying but not following all this very well..
Anyone care to make a simpletons summary of the current situation?
been 4.5 months since it was last at $2.50! :eek: been dipping under $2 recently

Rainmaker2000
9th-December-2007, 08:00 AM
I can confirm I'm a lawyer, tree hugger and many other things but no botanist..........that article sums it up......Silly government policy made just worse by retaining it.....I saw much of it when I worked in govt.

I appreciate all the sums you guys are doing.......one thing you may consider about land valuation which is key to my investment in TIM........the plantation land is not just for planations....infact as the MIS critics point out, plantations are the least economic and efficient use for the land....if you believe the farmers who have to bid for land against MIS, planation land with its high rain fall and proximity to ports is by definition, the best of the best farm land.....I am thus of the school of thought that the massive inflation of 'hard commodities' is leading to a boom of soft commodities with the large agriculture landowners being the next 'infrastructure players.'..........you may wish to note the current float of 'PrimeAg'

As for the share performance of GTP and TIM, I find the downtrend a little perplexing since the perception now seems to be that the sector will win its MIS case........Dare I say it though, I think TIM has hit bottom as they have pretty much admitted their spending spree is over and now they are just going to let the annuities role in

pch
9th-December-2007, 05:46 PM
im trying but not following all this very well..
Anyone care to make a simpletons summary of the current situation?
been 4.5 months since it was last at $2.50! :eek: been dipping under $2 recently

Here's my summary..

If you do the math and do not include tax benefits as Jackob has done, the returns are crap on MIS plantations. The crux of the argument is if you take out the tax benefits, the industry wouldn't stand on its own.

But as an investor in the woodlots, you can claim up an front deduction and then claim additionally claim interest on the remaining (if you borrowed to do it), you can in effect pay less than half the upfont fee.

This has the effect of increasing the 'return'.

So critics rightfully argue that if it wasn't for the tax benefits there would be no MIS industry.

But while this has been happening, the MIS companies now own some very good assets, that unlike most assets a company owns, should retain their value going forward. Currently the market has little confidence in these companies because of a variety of reasons, but their share price right now is around or below the value of those assets.

You have to make a call on how much value these companies can get on these assets later (ie return on equity).

Jackob
9th-December-2007, 09:36 PM
I once read in a newspaper that CEO John Young said that, either with or without tax benefits, the MIS investors within top and zero marginal tax-brackets both enjoy the same return rate. This is because the distributions to the investors are all taxable at their marginal rates. In other words, the tax deducted at the beginning of the scheme is only deferred.

(In such situation, the high incomers enjoy effectively zero tax rate as the poorest. That’s why the schemes are in favour with the rich.)

Thus, if a scheme returns only say 60% of the capital to the investors, both the rich and the poor both get the same 60% of their capital after tax (both lost 40%).

So a reasonable return rate (say at least +7% p.a.) is vital to all the MIS schemes.

Austravel
9th-December-2007, 09:59 PM
Hi,

Do you know if anyone has worked out the real rate of return from the latest timber plantation harvests for Timbercorp, Gunns etc?

I've tried to track down info but to no avail. I have a few plots with them and ITC. Now with hindsight don't believe I should have gotten into them.

Thanks

Jackob
10th-December-2007, 09:19 PM
Hi Austravel,

It looks like no one knows the numbers you asked, or people who know them don’t want to tell you!

Not a good sign.

My guess is that the “real rate of return from the latest timber plantation harvests for Timbercorp, Gunns etc” will be quite poor, so that the companies and insiders don’t want to talk much.

barnz2k
11th-December-2007, 01:00 AM
PCH - cheers for that!

Seems like even if they do come through strong its going to take a while before this happens. Seems to hold around the $2 mark.. tempting to get a few at $2 to reduce avg buy price and have an earlier sell option in the event of a short rise.

Junior
11th-December-2007, 11:07 AM
I once read in a newspaper that CEO John Young said that, either with or without tax benefits, the MIS investors within top and zero marginal tax-brackets both enjoy the same return rate. This is because the distributions to the investors are all taxable at their marginal rates. In other words, the tax deducted at the beginning of the scheme is only deferred.

(In such situation, the high incomers enjoy effectively zero tax rate as the poorest. That’s why the schemes are in favour with the rich.)

Thus, if a scheme returns only say 60% of the capital to the investors, both the rich and the poor both get the same 60% of their capital after tax (both lost 40%).

So a reasonable return rate (say at least +7% p.a.) is vital to all the MIS schemes.


You need to take into account the time value of money, if you invest your tax savings elsewhere (eg shares) and it returns 10-20%pa, or if you use the savings to pay down your mortgage, then you only need a modest return from your MIS to make it worthwhile.

Also if you're a high income earner at the time of investment but then become retired by the time of harvest that adds to the tax effectiveness.

Jackob
11th-December-2007, 02:36 PM
... if you invest your tax savings elsewhere (eg shares) and it returns 10-20%pa, or if you use the savings to pay down your mortgage, then you only need a modest return from your MIS to make it worthwhile.

Hi Junior,

I happened to hear some similar stories of the extra “tax savings” years ago in GTP investment seminars. Did you get the story at similar occasions, too?

Now let me explain to you the story.

Assume you have $10,000 to invest in a pulpwood scheme. After tax deduction, you have $4000 back (assume your tax rate =40% for simplicity). Thus you actually have only invested $6000 in the pulpwood scheme, and you have $4000 “savings”.

11 years later, you will get a total return say $11,000 from your original pulpwood investment of $10,000, at the same return rate as all other growers, but because all the returns are taxable now, you will get $6,600 after a 40% tax. This represents a $600 profit, or an annualised return less than 1% pa on your original $6000 investment. Fair enough!

Now, what will happen to your “saved” $4000? Well, that $4000 “saved” money I reckon is not real, as you never really get it in your bank account.

Let’s now have a close look at your bank account with this respect. First your withdraw $10,000 from it to write a cheque to GTP, and then immediately get a $4000 cheque from the ATO for the TAX deduction. So at balance, your account is purely reduced by $6000 (not increased by $4000). At the end of the 11 year period you have the $6600 investment return back to your account, so you have earned $600 with a annual return rate close to 1% - Good luck – and this is the end of the story.

(But if people all know this result in foresight, why not put their $6000 directly into the share market to earn 10-20% pa in the first place instead of MIS? - This is one main reason I reckon why the MIS sales have to shrink year by year.)

Junior
11th-December-2007, 04:01 PM
Hi Junior,

I happened to hear some similar stories of the extra “tax savings” years ago in GTP investment seminars. Did you get the story at similar occasions, too?

Now let me explain to you the story.

Assume you have $10,000 to invest in a pulpwood scheme. After tax deduction, you have $4000 back (assume your tax rate =40% for simplicity). Thus you actually have only invested $6000 in the pulpwood scheme, and you have $4000 “savings”.

11 years later, you will get a total return say $11,000 from your original pulpwood investment of $10,000, at the same return rate as all other growers, but because all the returns are taxable now, you will get $6,600 after a 40% tax. This represents a $600 profit, or an annualised return less than 1% pa on your original $6000 investment. Fair enough!

Now, what will happen to your “saved” $4000? Well, that $4000 “saved” money I reckon is not real, as you never really get it in your bank account.

Let’s now have a close look at your bank account with this respect. First your withdraw $10,000 from it to write a cheque to GTP, and then immediately get a $4000 cheque from the ATO for the TAX deduction. So at balance, your account is purely reduced by $6000 (not increased by $4000). At the end of the 11 year period you have the $6600 investment return back to your account, so you have earned $600 with a annual return rate close to 1% - Good luck – and this is the end of the story.

(But if people all know this result in foresight, why not put their $6000 directly into the share market to earn 10-20% pa in the first place instead of MIS? - This is one main reason I reckon why the MIS sales have to shrink year by year.)

I understand the situation you're explaining. I am assuming that you borrow the initial amount, therefore you do have the $4k to invest. I'm also assuming a better return than 1%. That's why you have to DYOR when deciding which scheme to invest in.

Jackob
11th-December-2007, 05:14 PM
I reckon no matter whether the money is borrowed or not borrowed, if you invest in 3 GTP woodlots (1 ha) with a nominal $10K, you actually only paid $6K and get returns from this 6K, not from the $10K (after tax).

A common mistake is that people don’t know their distributions are all taxable, ie, they are misled to believe the first $10K of their distributions will be tax-free, so they think they have got $4000 extra free money.

Portfolio
11th-December-2007, 08:49 PM
Junior is partially right - MIS can work as a strategy in some situations - even if the client never gets $1 back. Heres how:

Take an aggressive property developer. These guys typically - leverage any equity they have very aggresively (90% LVR) and believe they can earn a high rate of return on their equity through developments.

Now lets say a property developer does a development and makes $1,000,000 profit. Assume this is in a company structure the developer has 2 options. Either

Option 1. Pay the tax ($300,000) OR
Option 2. Invest $1million into MIS with a $1million loan from the provider (GTP does offer this) The developer can pay GTP interest only for the first few years (say 3 years).

Therefore:

Option 1. -$300,000
Option 2. $0

The client can therefore use this extra $300,000 cash and borrow against it at 90% lvr to invest in another $3,000,000 investment. If the developer can turn this project around in 3 years (turning the $3million into $5million) the extra $300,000 in the clients pocket has effectively made them this extra $2million. The fact that they lose $1million on the Agri (assuming $0 return) is irrelevant. They are still $1million better off. All they have had to do is pay GTP 10% pa on the loan ($100,000pa which is tax deductible so $70,000pa. after tax).

HOWEVER while this works for some clients and is very lucrative for the planners that understand this the majority of investments are not sold under this strategy. I suspect most financial planners expect unrealist returns.

Hope this helps.

Jackob
14th-December-2007, 02:46 PM
Hi Portfolio, :)

I might be wrong, but your example still looks familiar to me. It still sounds like from a GTP promotion pamphlet.

Your example highlighted how a property developer could utilize the $300,000 tax return (30% on the $1,000,000 MIS investment) by gearing it up 10 times to $3,000,000 and make money on that $3,000,000 at a very high return rate for 3 years. Thus in this example, if the person could make any money, it was largely because his 10 times gearing strategy in a highly profitable investment, which was nothing to do with MIS at all.

Also in this hypothetical example, the real cash available for gearing should not be $300,000, but should only be $200,000, as $100,000 (10% on the $1M) were needed for GTP loan deposit.

The most strange thing of all was that, if the investor had got $1M pre-tax profit, why should he has to invest in MIS to get $300K tax return and then to gear up? Why shouldn't he directly gear up the $700K profit (after 30% tax) to $7m to earn much more money at a lower risk?

Portfolio
15th-December-2007, 09:21 AM
Hi Jackob,

Unlikely its off any pamplet as from my observations 99.9% of planners sell MIS expecting a commercial return which both you and I agree will not come.

1. Your 100% right. The advantage comes from gearing the property project at lower interest rates however for property developers that i know getting the equity (which as illustrated you can do through MIS) is always a problem.

2. Your not right on the @200k front though. They can be 100% borrowed. You might be referring to having to pay the GST but this immediately (next BAS) claimed straight back from the ATO therefore the client is still $300k cash-flow better off.

3. On the last point you are right. They do use the $700k profit to re-invest but as i said above these types constantly re-invest all sales proceeds into the next development forgetting about the tax they have had to pay.

So what i am basically saying is - I agree that anyone that invest expecting a commerical return is kidding themselves BUT GTP get sales through the structure of MIS. The same scenario above could be used for share traders / future traders that might expect a high rate of return.

Remembering that if it is done inside a company and the developer loses it all on the next project they will probably default on the GTP loan. However through the wonderful world of securitisation most of these loans are "packaged up" and sold to the unknown debt buyer (they are not on GTP's books).

The Captain
18th-December-2007, 08:52 AM
I think we are going to see below the $2. My target is $1.80 where I think it will have to be re-assessed. The weekly chart shows Elliot Wave and it is looking towards this level of $1.80 beore we see a retracement to the $3 previous levels. It shows that the wave 5 ($1.80) may come in around 26th November. Remember these are my own thoughts and you should do you own research.

Well my timing was out but my target of $1.80 has now just about to be reached and broken. Where will the price of this stock go now? Both Weekly and daily charts look like heading south. Daily showing a strong trend now starting to push this one lower. Weekly chart also beginning to agree. Maybe its all that positive talk about this stock from Jackob (LOL). I cant see this share price rising any time soon. But like others mine is just an opinion and you should not take it as a recommendation to buy or sell this stock. Do your own research.

barnz2k
18th-December-2007, 09:02 AM
shyt. what a drop.
been busy and couldnt check it. firmly below $2 now.. :(
what to do what to do.....

Jackob
18th-December-2007, 11:55 AM
... Maybe its all that positive talk about this stock from Jackob (LOL). ...

The Captain,

Thank you for your compliments, but I don't think I would have such a power. LOL.

Agree that GTP won't come back any time soon.

pch
19th-December-2007, 12:50 PM
More info on the 1996 harvest

http://gscentral.great-southern.com.au/getfile.aspx?Type=document&ID=71415&ObjectType=3&ObjectID=8587

Key points:

$4102.08 return per woodlot below expectation
prospectus volume 250m3, actual 197m3 (20% below)
expenses $50 per tonne above forecast
5.5% managagement fee waived from final result
woodchip price below inflation (1.4% vs 2.6%)

I know there will still provisions in place for propping up the 96 project but waiving the management fee is just another way of doing provisions. (I forget how much though).

I wonder if they think that from 97 onwards dropping the management fee will give them enough room to avoid the prop ups?

So, hows about those GTP managed funds then! :rolleyes:

Rainmaker2000
19th-December-2007, 02:27 PM
I must say, it was with particular amusement that I read your attachment on the recent 96 harvest and I think of how brave The Captain was, who has been the only participant on the thread for a while to subject himself to the devils advocate position on this company.......

I was shocked when I first took an intensive look at GTP about one year ago, that so much of their business comes from repeat 'customers', amazingly this includes current management.......they really are believers...

You can see why the Mums and Dads continue to be shystered.....after I read this attachment, I get the feeling that GTP is about to save the world or something and you can make a contribution too....

Unfortunately, there are just moments when the bull**** creeps through the marketing........for example, "to provide an improved outcome for
growers the Board of Great Southern contributed to the 1996 project to the equivalent of raising yeilds to the initially targeted level of 250 m³/ha."

In other words, your project failed and we are propping it up so you go with us again.......oh and by the way, we are waving our management fee and giving you 10% off..hehehe..........Would you buy from such a desperate sales person?

Junior
20th-December-2007, 11:23 AM
They're not all bad:

FEA Plantations is scheduled to distribute the final harvest dividend for its inaugural 1993 forestry managed investment project1 in May 2008.

Current forecasts indicate the Project will deliver a pre-tax return of 12.4% per annum and an after-tax return of approximately 7.5% per annum to grower investors2.

When the thinning and estimated clearfall harvest proceeds are discounted back to 1993 dollars, the total anticipated return is approximately 50% higher than original 1993 dollar Prospectus estimates based on the assumptions of a yield of 375 tonnes per hectare at age 15 years and a selling price of $20 per tonne.

Aussiejeff
21st-December-2007, 09:16 AM
Todays Annual Report had very negative overtones in the first three paragraphs.... lots of "challenging", "disappointment" etc. Followed by the even worse news that GTP had a massive 47% drop in net profit before tax (down from $133 Million last year to only $71.5 Million this year).

That can't be good for the share price today. I'm glad I got out at $4.55, many moons back when they first announce they were "diversifying" into cattle and grapes. At the time of the announcement I thought that was the stupidest thing they could do and immdiately sold off my holdings. Phew....

I guess all shareholders can do now is pray for heavy rain over the coming 12 months. Best of luck.


AJ

Rainmaker2000
21st-December-2007, 12:23 PM
I sure know where you are coming from AussieJeff and I can't say for sure, but $4.55 is looking like a reasonable exit point at the moment!!!......just from memory was that around the price GTP was offering a share purchase plan to its loyal flock....you got to love a company which shows its own shareholders a lot fo respect.....

Funny thing, I thought the cattle and grapes was a dicey move initially, but in retrospect the move into cattle has been the most lucrative thing GTP has ever done........of course except for the upcoming change of legislation.........I'm still of the view there is value in this sector mainly for its finite assets but it is more than testing the patience

pch
22nd-December-2007, 11:35 AM
Interesting listening to his boardroom radio interview and this quote in the annual

"From a cash flow perspective we believe the new pulpwood forestry project will deliver significant cash flow benefits from the end of 2007/08 onwards as land acquired for the project is on sold to investors."

Would this be the source of the big fee increase? Seems to me that while this will impact the balance sheet, it is actually not a bad move going forward because it adds an extra dimension to MIS returns that makes it easier to market.

comments? Anyone know exactly how it works?

BuyandHold
24th-December-2007, 11:38 AM
I'm intrigued by the focus on the returns from GTP MIS projects.

Now of course some investor return is required in order for GTP to prosper. However ultimately the returns to GTP investors (as opposed to MIS investors) depend upon the ability of GTP to sell its MIS and funds to investors.
Hedge funds, banks, insurers and virtually the entire financial sectors have ripped off their customers at various times and to varying degrees in recent times. Particularly hedge funds, charging absurd annual fees and performance fees in the 20 - 25% region. GTP offers a pretty decent product in comparison to some of the rubbish offered in recent times (e.g. Fincorp, Basis, Absolute, Grange, Westpoint and now even LPT's of late).

pch
24th-December-2007, 11:59 AM
It's partially academic I agree, but it is worth analysing nontheless. Now though that we have had returns for 3 years, whether the MIS marketing machine can as easily convince a new generation of investors to part with their money is an interesting question.

Rainmaker2000
24th-December-2007, 12:06 PM
I have to agree that Mums and Dads will keep buying as long as the advisors are paid so much to sell them!!!

But it is for good reason we focus so much on investor returns for MIS products.

a) If the investors don't make a return, these MIS companies will prop them up with shareholder funds..like GTP and TIM is not passing on all water liability this year......they obviously know how important the returns are

b) If MIS does not exist, these businesses themselves then need to use their assets to make returns for themselves, not their investors.......so it actually makes good sense to have real assets making real returns

I hold a position in TIM precisely because I think the assets have a sound future outside MIS

pch
26th-December-2007, 01:47 PM
Hmm, Australia looks set for another big score in the cricket..

anyhoo

I have a mate who's a financial planner (don't hold it against him) and he told me some time back that GTP's timber stuff was one of the most 'expensive' on the market. But he did go on to say that he felt their cattle stuff was actually pretty good. For all of our talk on the forestry, I must confess I've not delved anywhere near as much into the cattle project.

In relation to your comment on assets, I no longer hold TIM (and at present anyway, do not regret it :-), but as mentioned before I do like the fact that all of these companies buy appreciative assets that are not intangible. It's a nice combo. But if you are talking specifically about assets that have potential outside of MIS, how does the cattle projects compare?

Another project that we need to look into this year is the high value timber project. From an MIS point of view, that one takes much longer than the 10-11 years of the Blue-Gum. They closed oversubscribed didn't they? With a longer time-frame, combined with the 'certainty' of the up-front tax deductability, how much of a growth area is this? I mean, by the time we are all in a position to analyse returns some of us may be retired! :-)

barnz2k
4th-January-2008, 08:33 AM
CBA ceasing to be a substantial holder!

http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00800171CBA

This cant be good :confused::eek:

treefrog
4th-January-2008, 09:29 AM
I'd guess the forecasts have something to do with the slide

recently has dropped below 4yr low and strong LT support/resistance of $1:90

2007 2008 2009 2010
EPS 16.5 18.0 19.9 17.6
DPS 9.6 13.5 12.0 0.0

Jackob
4th-February-2008, 02:32 PM
I found an actual profit warning hidden in its 2007 Annual Report.

"Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)

This warning is so cunningly hidden in an extremely lengthy sentence that I bet not many people would find it.

Take care.

Nicks
4th-February-2008, 03:37 PM
Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.

treefrog
4th-February-2008, 03:45 PM
this info from comsec site:

FORECAST EARNINGS TREND
Have the analysts been upgrading or downgrading their forecasts over the last 3 months?

Jackob
4th-February-2008, 03:45 PM
Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.

No, what they said about dividend was "Dividends in the coming year ... will not necessarily reduce with the profit reduction.".

I reckon "will not necessarily reduce" should be read as "will likely reduce".

Jackob
4th-February-2008, 05:27 PM
this info from comsec site:

FORECAST EARNINGS TREND
Have the analysts been upgrading or downgrading their forecasts over the last 3 months?

Treefrog,

Thanks for posting the colourful figure on board.

According the present ComSec "consensus forecast", GTP's 2008 earnings and dividend are all higher than last year's. Apparently they haven't take GTP's own predictions into account and they will be certainly downgraded sooner or later.

(But as I said that GTP's profit warning was hidden so deep in its lengthy Report that I bet not many people would find it. Many brokers also might not see it - just wait'n see when they will find out! :D )

pch
7th-February-2008, 06:07 PM
That statement is funny, its a really long, complicated way of saying "it may go up, it may go down too", which I also notice people do when TA'ing a chart.

No time to really do much here lately Jackob, but the cynic in me sees the High Value Timber project (and its associated oversubscription) as a stroke of MIS genius. 25 years till you and I can argue about ROI and yield! :-)

The Captain
7th-February-2008, 11:03 PM
In my last post I said that Gtp would break the $2 barrier and head towards $1.80. So where to now? Selling pressure seems to be fading away and chart is indicating a EW 4 Sell. So my new target for this stock is around $1.50 before this will have to be re-assesed. The EW is not a great one as it does not conform to correct EW properties, however the chart does seem to suggest a lower price around the $1.50 mark.
Volume has been increasing so we may just see it touch this bottom before a retracement can occur. The market may see that $1.50 is a great buy. The stock recently bounced off the 50 day M.A. and is well below the 200 day. So I am still bearish on this one however a change might be around the corner if it completes the EW 5.

Again these are my own thoughts and you should not take this as a recommendation to buy or sell this stock, you should do your own research. My dog never listens to me, and my wife does the opposite. Oh and thanks to Jackob for ferreting out the bad news for me on this stock in the last annual report. I knew I wouldn't have to read it (LOL) . Cheers and Happy Trading:D

Jackob
9th-February-2008, 10:37 PM
Hi, The Captain,

Thanks a lot for showing the GTP’s diagram and the next leg of GTP's fall to $1.50.

Regarding GTP’s profit warning, we didn’t have any from GTP last year, but GTP’s earnings per share fell more than half from 41.6c (2006) to 20.7c (2007).

This year we do have a warning from GTP itself now, so I reckon its e/s reduction had to be worse last year, that is, its e/s should fall more than half from ~20c to 10c or even to 5c.

In the light of GTP historically having a p/e ratio around 10x, I would predict GTP’s price would accordingly fall to 50c - $1.00.

barnz2k
28th-February-2008, 07:25 AM
new paperprice agreement up 10%. Dunno how positive this is or what it means, how much they sell etc, but

from here (http://www.wabusinessnews.com.au/en-story/1/61070/Great-Southern-secures-new-export-woodchip-price)


Great Southern secures new export woodchip price
27-February-08 by Edited announcement

Great Southern Ltd has announced a new price agreement for the sale of hardwood woodchips to Japanese pulp and paper customers for the 2008 calendar year.

The new price of A$207.40 per bone dry tonne (BDT) was agreed for plantation hardwood supplied from the Albany region in Western Australia. This price represents an increase of $18.00 per BDT - almost ten per cent more than last year's price.

pch
28th-February-2008, 01:29 PM
Taken over the lifetime of a project it adds a around 1% per annum (not adjusted for inflation). It's good obviously as it would reduce further 'propping up' thats been discussed before. Whether its enough to mitigate it totally who knows, you'll only know when the next half yearly is released.

But I'm more interested in whether it would result in bluegum projects being close to or oversubscribed given they restructured them to improve thinning margins.

I'd say this year there are a lot of people that are going to crystalise tax losses on property stocks, wheras the last few years there have been fat capital gains. So I'm skeptical whether than can do it..

Still, at least the price increase is over CPI for once!

snabbu
29th-February-2008, 01:21 PM
I found an actual profit warning hidden in its 2007 Annual Report.

"Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)

This warning is so cunningly hidden in an extremely lengthy sentence that I bet not many people would find it.

Take care.
I don't think they are trying to bury this, Chairman David Grithifs said something to that effect in the first two minutes of his presentation, which was reittererated by the new MD later in the presentation.
The key points are there is to be no cattle MIS this year so sales will reduce.
There is a timing issue between acquisition of land and sales, the sales being in the last three months of the financial year.
The increased cost of funds.
The reduction in company gearing to 43 percent. (refer no cattle MIS)
There is also a statement by the new MD that he intends to impliment some policies designed to improve long term outlooks that will have a detrimental effect on short term performance.
The thing to watch here is the result of a test case with the ATO and what the Rud government does tax wise in regards to MIS. I guess we will have to wait for the budget to see that. What I am hoping is that the short term nervous nellies will sell this down a little more so I can buy lots cheap on the day before budget night then hope like hell for some carbon sequestration tax effective components to be rolled out.

Cheers

Gary

Jackob
4th-March-2008, 01:24 PM
Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!

The poor fundamentals just can't support it at the present price level any more.

The Captain
4th-March-2008, 01:58 PM
Yeh, Target in site, there really is a lot of selling pressure on this stock and I was wondering when it would break. Chart was just about on the money so far.

snabbu
5th-March-2008, 09:07 AM
Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!

The poor fundamentals just can't support it at the present price level any more.

I am looking at a chart on the ASX for this stock verses other diversified financials. It looks to me as if this stock if following the sector as a whole exactly, rather than having any individual problem of it's own.
So perhaps it is a sector thing.

Cheers

Gary

Out Too Soon
1st-April-2008, 03:00 PM
Maybe it's insider trading or April fools day but GTP has leapt to $1.70 today on seemingly no news.:confused: Should I ditch what I hold now or wait for an announcement that may shed light.:rolleyes:

Out Too Soon
1st-April-2008, 03:14 PM
This should be todays GTP chart, bear with me & I'll add 100 characters (who said a picture is worth a thousand words, Joe?)
19650

Jackob
2nd-April-2008, 12:22 AM
It looks not like a short journey at all since you said in your post on 7th-November-2007,

"Nice little break out yesty but the buying volume looks quite thin today.
Now they have a 50% interest in a wood chipping mill I feel I no longer want to be associated with them.
Have to wait for a real up trend to dump them though. Guess patience is the word."

On that day you wrote the above, the GTP price was ~$2.28. It dropped to as low as $1.36 last week and suddenly came back to $1.74 at today's close.

I reckon the moment you have been waiting "for a real up trend to dump them" has finally come, if you are still holding them.

I don't think this "up trend" would last long, as GTP has just announced today that its 1H sales dropped from $150m last year to $51m now.

Nicks
18th-April-2008, 02:55 PM
Hi Jackob,

I am just wondering what your position is on GTP? eg. short? CFD?

Fortunately I sold out at 2.19 or something last year, but come back every now and then to see whos still following it.

Nicks
28th-April-2008, 07:17 PM
The silence is deafening! Jakob I have never seen you so quiet on this thread before! Hope to see you respond. Cheers.

Jackob
29th-April-2008, 10:55 AM
Hi Nicks,

Sorry I missed your previous post.

I reckon the situation of GTP is worsening. More downside risk.

How about Pch and Portfolio's views on it?

Portfolio
6th-May-2008, 06:06 PM
I'm with you - surprising the SP is staying up here.

Does anyone know was has happened with the Palandri Wine MIS investors? Do they lose their money or does the buyer takeover the management of the MIS for the next x years?

Jackob
7th-May-2008, 10:37 PM
I'm with you - surprising the SP is staying up here.

Does anyone know was has happened with the Palandri Wine MIS investors? Do they lose their money or does the buyer takeover the management of the MIS for the next x years?

I didn't even know the name of "Palandri Wine" - first heard from you - sad to hear the news.

As to the question of why the SP is still staying up there, one reason might be that Ospraire is still buying - it seems that those Yankees can never know what's happening to GTP/MIS in Australia.

Jackob
11th-May-2008, 12:40 PM
Another bad news for GTP and MIS:
http://www.theage.com.au/news/environment/plan-to-make-timber-industry-pay-for-rain/2008/05/10/1210131335198.html


Plan to make timber industry pay for rain
Melissa Fyfe
May 11, 2008

IN A blow to Victoria's massive plantation industry, the State Government has moved to make thirsty timber plantations accountable for the water they use.

Companies such as Timbercorp may face extra costs as Government documents show it is considering making them pay for the water the trees suck up.

Many Victorians have sunk millions of dollars into the plantation industry because investments are tax deductible.

The move has worried the industry, which says it is being unfairly "picked on". But the documents show the Government is concerned that precious rain that would flow into groundwater and then to streams is intercepted by thousands of hectares of plantation trees, leaving less for farmers, rural towns and the environment.

Under the 2004 National Water Initiative, all Australian governments agreed that changes in land use — such as large-scale plantations — could significantly affect the amount of water available to others, and needed to be regulated. The Brumby Government, which adopted the commitment in its water plan, recently released a tender to develop such a policy. The tender documents indicate where the Government may be headed on the issue.

The Department of Primary Industries tender refers to all sorts of land use changes that affect water availability, but it clearly has the plantation industry in its sights.

It suggests the successful contractor consider a permit system or "market-based mechanisms", which the industry believes may mean it has to buy the water the trees use.

Asking companies to pay for the water trees use is controversial because it is, essentially, charging for the rain that falls on private property. Such a decision could have implications beyond the plantation industry.

"It is complicated and legally questionable about how you would charge a plantation grower for using the water that falls on their land," said Richard Stanton, manager of policy at the Australian Plantation Products and Paper Industry Council. He said the water use of plantations was exaggerated and there were far more significant issues to deal with.

The Government faces the tricky task of balancing the benefit of plantations — reducing carbon in the atmosphere, erosion prevention, better water quality — with the negative "third party" impacts of taking water out of the system.

A 2003 study said all types of reforestation in the Murray-Darling Basin would suck 600 billion litres of water from the system each year by 2020. The industry argues this overestimates the number of trees that will be planted, and its best guess is that, by 2028, plantations will take 50 billion litres from the basin.

The tender, called Impacts of land use change on water resources — policy analysis and development, shows that recent studies of south-western Victoria have found that plantations and climate change have sucked 6% to 10% of surface and groundwater from the region.

Matt Hillard, a spokesman for Victorian Agriculture Minister Joe Helper, said it was important for the Government to ensure resources were well managed.

Allan Hansard, chief executive officer of the National Association of Forest Industries, said it was too early to jump to conclusions but the industry should not be "picked on".

The companies that may be affected by any policy change include Timbercorp, Great Southern Plantations, ITC, HVP Plantations, Midway and Willmott Forests.

Under the tender, the contractor must report back with policy options by early October.

brty
13th-May-2008, 01:30 PM
Hi,

I think tonights budget will have far greater impact on the SP than the water thing.

Nothing at all tonight, means leaving it up to the courts to decide in the test case. A decision is expected around Christmas. This would be short term bullish for GTP.

However if there is something in the budget about MIS, then real game starts tomorrow.

brty

Portfolio
13th-May-2008, 06:22 PM
Keep holding then brty......its only money.

I dont think there will be anything in the budget personally.
Why would there be? Things are progressing nicely. Maybe next budget if they cant win the court case they would put something in place to stop MIS.

barnz2k
13th-May-2008, 08:20 PM
Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?

Jackob
18th-May-2008, 03:35 PM
Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?

No I am not confident in these guys in long-term either.

In short-term, wait for the HY report in the last week of this month and see any triggers for a price movement.

(I reckon the HY results would most likely be negative.)

Jackob
28th-May-2008, 03:36 PM
http://www.wabusinessnews.com.au/en-story/1/63260/Great-Southern-suffers-49m-loss

Great Southern suffers $49m loss
26-May-08 by Mark Beyer

Investment manager Great Southern Ltd has commenced a strategic review of its business after reporting a worse than expected loss of $49.1 million for the half-year to 31 March 2008.

The company has previously foreshadowed that it would incur a loss but a blow-out in provisions for doubtful debts to $37.2 million made the loss larger than anticipated.

The latest result compared with a net profit of $14.9 million in the previous corresponding half-year.

Chief executive Cameron Rhodes said the company has begun a comprehensive strategic review of its business "to provide a more sustainable, transparent and valuable business that can become less susceptible to regulatory forces".

barnz2k
1st-June-2008, 06:47 PM
Dividend is payable early July - maybe some people are holding out for the dividend and then there will be a sell off? I dont chart but seems like July last 2 years was a sell off.
I got lost, has there been a final verdict on the tax advantages yet?

3c Dividend, to me that works out at about $55 (reinvested as shares), so may not be worth holding out for

Jackob
5th-June-2008, 03:04 PM
Dividend is payable early July - maybe some people are holding out for the dividend and then there will be a sell off? I dont chart but seems like July last 2 years was a sell off.
I got lost, has there been a final verdict on the tax advantages yet?

3c Dividend, to me that works out at about $55 (reinvested as shares), so may not be worth holding out for

Barnz2k,

You are right that dividend is payable in July. However, the ex-dividend date is 16/6, less than 10 days away. It may cause some buying interest next week.

You are also right that July was usually a sell-off month for GTP in recent years. This is because on 1/7 GTP always announces its whole year sales number and in recent years the numbers were not very good at all.

In the first half of this year GTP's sales dropped by $99m from $150M to $51M and e/s dropped from 5c to -15c. In the 2H2008, if GTP could manage to sell as much as 2H2007, then it might be able to earn 15c/share as last year, the e/s of the whole year would be -15c+15c=0c. This might trigger another July sell-off.

barnz2k
5th-June-2008, 07:21 PM
Thanks Jackob

So does that mean if someone buys the shares and holds only from just before the 16th they are eligible for dividend payment??

And would I/they have to wait till the 17th to actually get the dividend? Im currently on share Reinvestment plan so would need the extra shares to clear first if I was planning to sell after it


Hope your right with some interest due to the dividend- down another 4%today :(

Jackob
6th-June-2008, 11:06 PM
Thanks Jackob

So does that mean if someone buys the shares and holds only from just before the 16th they are eligible for dividend payment??

And would I/they have to wait till the 17th to actually get the dividend? ...



Barnz2k,

Sorry that the ex-dividend date should be 12/6 instead of 16/6.

This means that if you sell your shares on 11/6 you won't have the dividend, but if you sell them on 12/6 you can get the divvy.

barnz2k
7th-June-2008, 11:22 PM
thanks for clearing that up. Very interesting.
Potentially selling may start on 12th then.
Although with reinvestment plan selected, even selling all my shares I would be given back a small parcel of shares (which selling would lose half in brokerage) unless I could change that option or it does auto on selling all shares.

barnz2k
11th-June-2008, 05:38 PM
well I was right about the sell off - but it seems to all have happened a day early :banghead: 12% down in one day. $&%#

Now will this continue to keep sliding or possible rebound.

Aussiejeff
27th-June-2008, 09:20 AM
well I was right about the sell off - but it seems to all have happened a day early :banghead: 12% down in one day. $&%#

Now will this continue to keep sliding or possible rebound.

Sliding...... dropped a further 30% in 12 days to low of 69.5c on 25th June. Terrible performance.

Meanwhile, one of the US' biggest agricultural hedge funds - Ospraie Management LLC - has been chipping away and bought up almost 20% of GTP's shares.

They had their wings clipped badly in 2006 the last time agricultural and commodity markets tanked a bit. Hopefully for GTP holders, given the shaky outlook at present, Ospraie don't get caught short again and have to sell down that 20% in a hurry. All those eggs in one basket of a US hedgie is a bit of a worry to smaller shareholders?



AJ
(ex-holder)

Julia
27th-June-2008, 10:27 AM
I was only half listening to the radio news item, but isn't there currently some political discussion about wiping tax benefits for agribusiness?

Might not affect GTP. Does anyone know?

I haven't been following this company (sold it about three years ago thank goodness) but still curious about why the inexorable downward slide.

barnz2k
28th-June-2008, 03:28 AM
I dont really know a lot about it - I originally bought GTP as a friend suggested it when I was getting into shares - he still holds about double what I do.

I think GTP used to be attractive because of the tax break - and it has been in discussion a while now about getting rid of the benefist associated - leaving people with little reason left to have interest in GTP.

Not sure what that spike was yesterday up to almost 0.8. But damn, my avg cost (from div shares not buying more) is a bit under $2.80..

ohwell, holiday tomorrow woohooo dont think about my GTP/VBA/BNB nightmares

fgwyn
13th-July-2008, 04:38 PM
Just doesn't let up for these guys.. I think im just looking for an exit strategy now. Anyone still confident in these guys long-term?

Any advice now they are down below 60c ? (I bought in at $3.15 - ouch !)
Should I buy more and lower average price ?

Hard to see where this company is going (regardless of 'strategic review')
Any thoughts much appreciated.

Seneca60BC
13th-July-2008, 05:02 PM
I was only half listening to the radio news item, but isn't there currently some political discussion about wiping tax benefits for agribusiness?

Might not affect GTP. Does anyone know?

I haven't been following this company (sold it about three years ago thank goodness) but still curious about why the inexorable downward slide.

How much did you lose on this one Julia?
. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Julia
15th-July-2008, 04:48 PM
How much did you lose on this one Julia?
. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

I'm not sure why you would assume I lost anything? I said that I sold out about three years ago. If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
My entry was at 48c. So I made a comfortable profit.

bunyip
15th-July-2008, 05:26 PM
I'm not sure why you would assume I lost anything? I said that I sold out about three years ago. If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
My entry was at 48c. So I made a comfortable profit.

Crikey Julia........a 'comfortable profit'?? I'd be more inclined to say you made an absolute killing! You rode the uptrend for all it was worth. Best of all, you headed for the exit gate once the party was over. And no doubt you found a profitable home for your former GTP funds by buying another growth stock.
Your modus operandi is a valuable lesson for anyone wanting to extract maximum profits from the market.

numbercruncher
15th-July-2008, 05:33 PM
haha Julia that had me in stitches as well ......

48c to circa $4 is a " comfortable profit " , Id really love to see what cleaning up or even a good profit is :D

bunyip
16th-July-2008, 02:20 PM
Any advice now they are down below 60c ? (I bought in at $3.15 - ouch !)
Should I buy more and lower average price ?

Hard to see where this company is going (regardless of 'strategic review')
Any thoughts much appreciated.

I notice that you haven't exactly been inundated with advice as to what you should do in the case of GTP.

Should you buy more?
I won't try to advise you.....what I'll do instead is tell you about a disgruntled investor who sat beside me at an Options seminar in Brisbane some years ago.
He told me he lost a six figure sum by investing in Pasminco (PAS). He started off with a modest investment in PAS, but the stock starting going down shortly after he bought. So he bought more. And more. And more. He invested further funds into PAS every time it dropped another 10%
The company went broke and he was wiped out.

Below is an extract from someone whose views I value highly......

Don't ever fall into the seductive trap of thinking that by buying more at lower prices, the stock will only have to rally half as much before you can get out even.
Do as the professionals do....average up, not down.
The pros pile on further when the market action proves them right - not when they've been proven wrong. Instead of sitting on a problem stock, they get out promptly.
Learning how to handle a losing position and keeping losses to a minimum is one of the most important secrets of successful investing.
The averager is thrown off the profitable track when he buys more instead of getting out.
Averaging down can be particularly crippling if you hold a stock that's really being sold off heavily. Every time you average in the hope that you're near the bottom, you simply add more shares and more losses to your portfolio.
The result is that you throw good money after bad. Trying to guess the bottom in a falling stock is like fishing in the ocean with your fingers. Hope is a foolish reason for holding on, but an even worse reason for buying more.

GreatPig
17th-July-2008, 06:54 PM
From July 2006 (post #539):


Maybe Split Enz were wrong, and the history of 2000-2001 will repeat - 50 cents here we come!
50 cents - here we are! :eek:

Now who said it couldn't happen? :o

GP

Julia
17th-July-2008, 10:08 PM
Great Pig, I can remember back about three years or more ago when the GTP SP slipped below $5. I was at that stage naively nursing the belief that any drop was only temporary. Can't now remember what you said, but you picked me up on that suggestion! How right you were, huh!

GreatPig
18th-July-2008, 10:27 AM
Well even my comment was just that, not a prediction.

I have enough share price history though to see that stocks can go up and down that much, and that almost nothing is impossible given the right circumstances (not that charts show anything about circumstances). That's why it sometimes amuses me to see people making statements along the lines of something-or-rather can never happen.

Late last year on another forum, when BHP was over $40, someone was saying they thought it would never get back to $30. While I didn't really expect it to, I mentioned that I could at least see it getting back to that price if the market dropped enough. It didn't quite get there in January, but came very close ($31).

Bottom line: (almost) nothing is impossible!

GP

Jackob
18th-July-2008, 12:23 PM
From July 2006 (post #539):


50 cents - here we are! :eek:

Now who said it couldn't happen? :o

GP



Good on you, GreatPig.

It's indeed interesting to look back at the discussions 2 years ago.

http://www.aussiestockforums.com/forums/showthread.php?t=1284&page=28

At that time I did know GTP would keep falling from $2.50 but I didn't expect it would come to 50c so soon.

Just for fun, may I suggest now that GTP would shrink a further 5 time to 10c in the near future, so that I could also say "Here we are 10c" once it happens? (I reckon this is a REAL possibility).

bunyip
18th-July-2008, 12:38 PM
Good on you, GreatPig.

It's indeed interesting to look back at the discussions 2 years ago.

http://www.aussiestockforums.com/forums/showthread.php?t=1284&page=28

At that time I did know GTP would keep falling from $2.50 but I didn't expect it would come to 50c so soon.

Just for fun, may I suggest now that GTP would shrink a further 5 time to 10c in the near future, so that I could also say "Here we are 10c" once it happens? (I reckon this is a REAL possibility).

Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?

Jackob
18th-July-2008, 02:25 PM
Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?

Bunyip,

It’s hard to say, really. But just as people often say, anything can happen on earth under the sun.

My gut feeling is that, frankly, the present GTP’s MIS business model cannot survive. It has to change, but any change could involve even more risks.

Just for new comers: if you read this “GTP” thread from early days, you can find that in the past ~2 years there have been plenty of warnings on GTP's downfall, which were surprisingly enduring and penetrating. The present situation has further deteriorated due to the facts we all know.

bunyip
18th-July-2008, 04:58 PM
Bunyip,

It’s hard to say, really. But just as people often say, anything can happen on earth under the sun.

My gut feeling is that, frankly, the present GTP’s MIS business model cannot survive. It has to change, but any change could involve even more risks.

Just for new comers: if you read this “GTP” thread from early days, you can find that in the past ~2 years there have been plenty of warnings on GTP's downfall, which were surprisingly enduring and penetrating. The present situation has further deteriorated due to the facts we all know.

There were indeed many warnings on GTP's downfall. But at the same time there were folks who were trying to talk the stock up. One of these characters got quite irate with me for telling people not to buy GTP while it was downtrending.

Rainmaker2000
18th-July-2008, 06:48 PM
Wow, GTP, a 50 cent company....I have not looked for a while so its a bit of a shock.....my preferred pick was always TIM but then, that's like saying it's better to go down on the front of the titanic than the back

In this market, even perfectly good companies are getting drilled...so special treatment is reserved for these guys...

I don't reckon they are set for oblivion...unless management is especially negligent....keen to hear otherwise.

My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.

At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow

Jackob
23rd-July-2008, 04:33 PM
I heard the rumour that "GTP is in the crosshairs of the world's biggest commodities hedge fund ...", but I am amazed.

Jackob
27th-July-2008, 05:00 PM
...
My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.

At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow

Could GTP “shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off”?

I reckon the answer should be “NO”. Because GTP can get enough cash flow to survive in this way.

GTP’s NTA (net tangible assets) is officially about $610m, or say $1.90/s (at 30/3/2008).

Suppose that GTP could sell 1/10 of its assets in the first year, and what it could get would be ($610m*1/10) = $61m. (The 1/10 assumption is lenient, as most of GTP’s lands are for the 11 year woodchip schemes, and the size of them 11 years ago were only a small fraction of the present).

Now, GTP has debts of ~$700m (at 30/3/2008), which needs interest payment about $70m a year. In addition, GTP has about $2.5 billion worth MIS projects under control, which need at least 2% of the total value as the maintenance cost, that is $50 m.

So, the total expenditure needed would be at least $70m+$50m=$120m, which is about twice of the $61m NTA sale results. Plainly, GTP would indeed go oblivion in such a way.

Thus GTP’s $610m ($1.90/s) “NTA” is only a pie in the sky, which you can never get it. The problem in GTP’s NTA valuation is that it has hidden its liability for maintenance of the existing MIS schemes and service of existing debts in the future. I believe if these hidden liabilities were correctly included, the present GTP’s NTA should be negative.

Jackob
27th-July-2008, 07:04 PM
Sorry, but the second paragraph of mine should be read as

I reckon the answer should be “NO”, because GTP canNOT get enough cash flow to survive in this way.

Rainmaker2000
28th-July-2008, 06:47 PM
Yeh, I certainly agree their NTA is not exactly reliable.......

When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....as I understand they are moving to this model for new MIS projects

I still think there is some value there in the enterprise and they should be able to survive but note that I would not be an investor in GTP at any price:2twocents

Jackob
11th-August-2008, 03:28 PM
....... When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....
Rainmaker,

If GTP “sell off” MIS to the investors only with the land available from rotation (from finished projects) as you suggested, the problem is that the revenue would be too little to let GTP survive.

For example, this year’s total sales were $350m, of which I reckon only a small fraction, about $50m - $100m, might be from re-selling the lands in rotation. Thus, had GTP totally relied on this amount of money, after a deduction of the 20% “commissions and promotion” expenses and servicing $700m of debt, nothing would be left to allow GTP to survive any longer.

Portfolio
27th-August-2008, 05:18 PM
Ouch. This forum has known for a long time that the MIS projects are near worthless but the restructure lets the whole world know.

1. No MIS investors will take this up (if only because of spite);
2. They have just killed off any future MIS investors by effectively telling them what the projects are actually worth;

I can see the value for GTP if MIS investors took it up but the bottom line is that they just wont. Very bad strategy.

Jackob
29th-August-2008, 04:02 PM
Yeh, it’s a bad strategy and it won’t work.

Just 3 months ago when the sp was about $1.60 it might work. But the sp is under $0.60 now – It’s too late.

It’s almost suicidal by showing all MIS projects are rorts and throwing GTP itself into a dead corner … can’t see how it can move next …

It looks like a very final gamble for GTP’s survive, but I can’t see how it can win.

brty
30th-August-2008, 10:51 AM
Jackob,

I agree it is a bad strategy, but the holders of millions of shares would see the same thing.

What can the large holders do in this situation??? All I can think of is that they will try to bid up the price over the next month or two, to get it over the $1.10 price and make the strategy semi viable.

What's the alternative?? Watch shares go to zero???

The offer for holders of those tree lots, paid $3300 in 2003, if the shares are only worth $1600, they are worse off than just paying the tax in the first place, and it will kill any future MIS sales.

Only real hope for future viability is a higher share price, probably around the $1.60 level mentioned earlier.

The real question to me is that this could be a fantastic opportunity to buy now, or management have stuffed up completely.

I can't believe that management is so stupid to offer such a strategy unless they know of backers (large holders of stock with deep pockets) that will support it.

I do not hold any shares in GTP, but I am thinking about getting some.

brty

Jackob
31st-August-2008, 04:12 PM
Brty,

Of cause some of the large shareholders would like to support the GTP share price, but the problem is how they could possible achieve that.

In the past as we may all know Ospraie was the one with a “deep pocket” to buy up GTP shares, from $3+ a share to begin with and to $0.50 to end up – Ouch! Tens of millions of dollars evaporated into the air and the GTP downward trend was even accelerated. Now they are having nearly 20% of GTP issued shares and have to stop buying.

Last Tuesday, the day GTP released its “strategic Review”, the supporters again pushed the sp up from ~70c to 95c, but soon they were defeated and the sp dropped to under 60c – even lower than where they started.

The problem is that under such a downward pressure, few major shareholders would continue to support it if they wouldn’t flee either. From both fundamental and technical view points, the GTP sp downward trend still has a looo...ong way to go.

brty
31st-August-2008, 10:56 PM
Hi Jackob,

In the 4 days since the announcement, there has been ~9m shares traded. Less than ~1m were in the initial push up. There has been over 7m traded between 56c and ~65c. Downward momentum is facing stiff resistance, volume for each cent of downward movement has risen, someone is supporting it/thinks its cheap.

Do you really think this strategy would have gone to market without getting some type of approval from large shareholders??? Maybe the idea came from there???

bye

The Captain
1st-September-2008, 11:11 AM
Some time ago, GTP posted a letter to growers asking them two things.
1. If they could sell their woodlot would they and
2. Would they like to be on a list in order for them to sell their interests in a project.
So I would think based on their announcement that they do have a number of growers who will take up their offer.

We must also consider that if GTP aren't doing so well and if you are a grower and consider that GTP aren't doing so well, would you hold out long term or would you take what you can get for your investment and run.
I think that the offers from GTP are so ridiculousy low for growers given the current share price and the ability to the growers only to get around 60 cents by onselling their shares that there is no way that they would consider it and will wait the further time to at least get their money back.
I do think we may see a further offer from GTP to growers in this area.

Some time ago i bought into GTP for 50 cents and soon after the shares jumped. I was going to write in this forum that I thought GTP shares would now increase based simply on the historical charts of GTP. Every time it hits 50cents the share price improved. If you look back you will see on their charts that there was 3 distinct occasions where this occured and those who bought shares did very well. A current example is Telstra where it hits $4.20 and bounces right back.
When I bought into GTP the chart was in EW currently on wave 3 down and looked to me to be ready for the up for the wave 4 peak which it has now completed. I sold for a nice little profit. But look out below I think that we may see a new low way under the 50c to 30 or 40 cents which would agree with EW theory. But there is very strong support at 50 cents.
If GTP survives the next few years I think we will see good share prices in this one again, there is a lot going on in MIS at the moment with Carbon credits and the test case just going to court now.
If there was a sensible offer to growers and the schemes were sold back to GTP not only would GTP begin to look very profitable and with Mr Young's stranglehold on the ownership of GTP gone, GTP becomes a real takeover target. But that is another story.
As usual dont buy or sell shares on my thoughts do your own research. Cheers and happy trading.

Jackob
2nd-September-2008, 12:35 AM
Hi Brty,

I am just looking at the GTP Charts. In the first 3 days of trading after the release of the "strategic review", apart from the first half-hour when bulls pushed the price from 86c to 95c with 1m- shares changed hands, the price was pushed down from 95c to 59c with a huge 6m+ turnover. Thus the downward momentum was apparent. Today it’s down again to 58c.

I reckon the "Strategic Review" is just GTP's last gamble to survive, but I can't see how it can win by showing all its MIS program are craps and asking MIS investors to surrender their holdings with half of value they originally put in.

brty
19th-September-2008, 12:00 PM
This stock now looks toast.

Falling below 50 cents is disastrous for the holders of mis units. Plus there is no incentive for anyone to take up new mis schemes.

The value of a timberlot, original cost ~what $3300 less the tax benefit of $1600 is now ~$300?.

I cannot see how this can end positively for holders of the timberlots or shareholders.

My only 'interest' in this company is that it was my pick in the september competition, where I stated it would either double or was toast.

I like just a little bit of butter and lots of apricot jam.:rolleyes:

brty

Jackob
21st-September-2008, 02:37 PM
Hi Brty,

We mustn't over-estimate the intelligence of the GTP management.

Had they enough intelligence, they would never ever have such a "strategic Review", then allow its share price drop to a low of under 30c and make themselves an absolute joke in the first place.

irenebrisbane
13th-November-2008, 09:39 AM
Has anybody as a grower or investor in GTP on this forum been approached by GTP with a proposal to surrender all woodlots in return for shares in Great Southern. Our woodlots go back to 1998 and 1999 and are due for harvest. With the current share price for GTP it is not an attractive proposition at all. GTP or GSL are very keen to have this scheme passed. Does anybody else have knowledge of this? I have read the explanatory memorandum and it seems to me that we would be disadvantaged by agreeing to the proposal. Any comments would be appreciated.

drsmith
13th-November-2008, 11:31 AM
While this is not a stock I have followed for some time I did invest in GTP shares several years ago for a substantial profit.

At that time I felt investment in the wood lots themselves represented a poor return on investment with the main theme being tax incentives. On this I assume nothing has changed. Tax minimisation is in essence taxable income minimisation which in the present economic environment wage earners are less able to engage in. I assume GTP's revenue is suffering on this front or that it will.

With regard to exchanging woodlots for shares the question that comes to my mind is that if the management company needs capital, do a capital raising like other companies have done. The most likely answer is that they can't so the next option is to raid timber lot holders for the capital needed to keep the management company solvent. At the very least it's a transfer of share market risk to the lot holders.

In short, don't do it.

irenebrisbane
13th-November-2008, 05:54 PM
Thank you, drSmith for your invaluable comments. What you have said reinforces our feelings on the proposal. Since posting on this site I have heard from another GSP grower and he is emphatic that he will vote no. He has also managed to get hold (obviously) of the names and addresses of some if not all of the other growers so hopefully there will be enough of us to cut this scheme off at the knees otherwise we will be landed with shares that will most likely be almost valueless and the loss would be even greater. My sentiments exactly that they need capital badly and are prepared to "do us out of our entitlements" by taking over our woodlots and cashing in on them. I hope we get something out of all this when this period is over.

Many thanks.

doctorj
13th-November-2008, 09:35 PM
Rest assured, the compliance committee (and auditors) will ensure the value of shares you receive under the deal is equal to or greater the amount of cash you'd receive normally.

You're right - GTP are probably having cash flow issues and see it as a handy way to preserve cash.

slim pickins
14th-November-2008, 01:13 AM
hi eveybody,

i have a substantial interest in the MIS schemes. hundreds of thousans of dollars..... i will be voting NO!

why.... essentially the way i understand it is that GTP would like to acquire MIS schemes worth $438 million for 72% of its share prce which today is worth $73 million.

so would you exchange $438 for $73.... if you would.... i would gladly do business with you :)

if GTP succeeds in pulling this off it will be the steal of the century. it will help the existing shareholders but i will lose a packet. there could be a run on the shares as MIS shareholders rush out of it. as if the shares arent low enough already.

please vote no via proxy as soon as possible if you are an MIS investor. i have no idea why they think they can even take this to a vote and force MIS investors to own their shares. there must be a law against it and if this vote succeeds... which i dont think it will i would be happy to start a CLASS ACTION lawsuit against GTP for this scam. if anyone has any questions please send me a message.

in case the this does nto pass and GTP goes bust the owners of the MIS scmeme will still get he benefit from thier forests, as an independent reciever will be appointed to manage it all.

cheers slim

slim pickins
14th-November-2008, 02:01 AM
regarding the company itself.... all i can say is feel sorry for the shareholders. but it was their investment decision. if this buyback is passed i do not see how it will benefit you. the MIS owners will own 72% and your holdings will be severey diluted.

the MIS owners will be left with shares in GTP..... now lets examine this comany in greater detail....

its worth $103 million as of today. looking at its annual report... what does it own?

firstly it owns a lot of debt... $800 million in debt. it has borrowed $800 milion!! they have borrowed $800 mil and they have given a loan of $800 mil to "related parties". i cant see who these related parties are in the annual report. i would love to know if these "related parties" are able to pay this money back.

they have also lent $4 million to one of the directors. thats amazing... i would not mind having a $4 million dollar loan.

the compnay spends $41 dollars on staff wages.... several directors recieve salaries of more then $1 million dollars. :)

im sure the company earns money too..... i would love to hear a positive spin on their annual report. the share is in a spiral... i would love to knwo how the market got it so wrong on this one.

the company is worth $100 million it has $800 million in debt which it has to pay. where are its assets..... how much could it get for those assets in the real world?

drsmith
14th-November-2008, 02:19 AM
i have no idea why they think they can even take this to a vote and force MIS investors to own their shares.

That thud was my bottom jaw hitting the floor when I read the following from page 63 of GTP's scheme proposals,


Significant issue of GSL Shares
The implementation of each of the Scheme Proposals and the Individual Offers will result in GSL issuing a significant number of GSL Shares
to project investors, including some project investors who may not have wanted to participate in the Scheme Proposals, but were bound
to do so under the terms of the Scheme Proposals. Some project investors may not wish to retain the GSL Shares issued to them and may
subsequently sell them on the ASX. If such sales are material, the additional supply of GSL Shares may have an adverse effect on the market
price of GSL Shares.

Does the original offer document for the MIS (which could be up to 10 years old) specify any circumstanses where Great Southern can forcably convert a a lot holder's equity into shares in the company ?

Also, what does ASIC have to say about this ?
Have any lot holders contacted ASIC and advised them on what is proposed and then asked for their assistance ?

slim pickins
14th-November-2008, 02:26 AM
With regard to exchanging woodlots for shares the question that comes to my mind is that if the management company needs capital, do a capital raising like other companies have done. The most likely answer is that they can't so the next option is to raid timber lot holders for the capital needed to keep the management company solvent. At the very least it's a transfer of share market risk to the lot holders.

In short, don't do it.

excellently articulated. why dont they raise capital .... firstly noone will ned to them. they have $800 million already they need to pay back. they could issue more shares... well the directors own 50 million shares or so amongst them out ouf a possible 317 million. they would not want to dilute it too much. if they raised capital through a share issue the share price would be 10 cents a share.

so the directors were walking along a trail one sunny afternoon and one said.....
"look at all these trees....... who do they belong to...."
----"the MIS investrors" says one.......

"hmmmm well, lets just take them!!! they must be worth $438 milion or so"

-----"yes lets give them $73 million worth of our shares for it. i dont want to hold onto these shares as the markets are sinking into a death spiral anyway"

"a capital idea old sport... a capital idea......do you think it will work?"

------"probably not... but its the only chance we've got, may god help us all"

:)

slim pickins
14th-November-2008, 02:41 AM
Does the original offer document for the MIS (which could be up to 10 years old) specify any circumstanses where Great Southern can forcably convert a a lot holder's equity into shares in the company ?

Also, what does ASIC have to say about this ?
Have any lot holders contacted ASIC and advised them on what is proposed and then asked for their assistance ?

i dont think so anyone has contacted ASIC, if such a clause existed i would nto have entered intot hsi investment. these are many legal avenues otu of it even if it exists. it might not even be mentioned..... it would create a precdent.... this is indeed a precident.

i wish i could find more MIS owners and lobby them.... i only fear some of the larger MIS owners might have had kickbacks to accept this which of course is illegal.

i do not think poeple can have their assets stripped away from them like ths. spread the word :) spread the word.... :)

who would have accpeted a clause that allows your investment to be acquired by a company on its own terms. how does a decision by one MIS investor force the other investor to abide by it? it simply cant .. or at least it shouldnt!

think of it as a condo. the management company that looks after the building says... i want your apartment.... the other apartent owners have agreed to transfer their ownership to us... you must too..... rubbish.... that cant work.

this will be a CLASS ACTION if the vote succeeeds. we all kow what will happen to the share price if 15,000 people get shares and try to sell them at once.

this company is doomed. the share price has already factored in the remote possibiliy that the "theft" of MIS schemes will work. but we must nto rest until people are aware of what is happening.

drsmith
14th-November-2008, 12:28 PM
The more I read the worse this is. Consider the following paragraph from the independent taxation opinion that forms annexure 2.


2.2 Disposal of a Grower’s interests in the Project
2.2.1 Grower’s interest in standing timber
A Grower will be taken to have disposed of their interest in the standing timber as a result of the Scheme Proposal. Pursuant to section 70-90 of the Income Tax Assessment Act 1997 (the 1997 Act), a Grower’s sale of standing timber to GSPH will be deemed to be a sale of trading stock outside the ordinary course of a Grower’s business. On this basis, a Grower will be required to include the market value of the standing timber in their assessable income in the year ending 30 June 2009.
While there's some complexity in the detail and examples below this statement, the bottom line is that the conversion of wood lot equity into shares will result in an income tax liability for the 2008/09 financial year at the individual investor's marginal rate. For MIS investors whose timber is harvested post 2008/09 this would represent a bringing forward of a tax liability from harvest to the 2008/09 financial year. That's a potentially nasty sting in the tail.

Out of curiosity I contacted Great Southern this morning and was advised that the offer document for this was approved by ASIC. If I was a MIS investor I would still contact ASIC to discuss the above details and seek further advice.

I also briefly looked at an offer document for a recent project and under the long list of risks I saw no reference to forced conversion of LIS wood lot equity into shares in the parent company. The financial position of the parent entity was however listed as a risk. Perhaps someone from a legal background with an interest in this might be able to comment further.

Guff
14th-November-2008, 07:33 PM
The bottom line question is what should MIS investors do.

If you boil it down, I can accept a loss -- investments sometimes lose money. I attended the infomation session held by Great Southern in Melbourne yesterday and it was a farce! They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.

That is the crux of what people need to decide.

1. Let GSL sweat it out and die if necessary, reject the offer.

For the MIS investor we'll call in the bank guarantee and have a new manager for the MIS. What are the details of this bank guarantee? that's the important question there.

Again I can handle a higher cost and even price gouge, because the alternative is....

2. Accept the offer and get reamed for any of those investments converted to shares by GSL

Lets face it, the shares need to be 50 cents to get your money back, they are currently at 33 cents, and if the offer went ahead they would probably drop to 10 cents as people seek to dump their newly aquired stock.


If I had investments in pre 2004 projects only, I wouldn't accept -- but having investments in 2004 2005 2006 makes a difference. ie GSL may survive long enough for us to collect on the other projects.

Perhaps the key is to accept GSL may need to fail, lets face it -- they were relying on future MIS sales to fund their obligation of all previous MIS projects, so it may not be sustainable anyway and they just fold in 3-4 years time...again not long enough for investors to collect on 2004 projects.

Does anyone know the details of the bank guarantee that would appoint a new manager??

drsmith
14th-November-2008, 08:45 PM
They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.

Who was first to comment about what happens if Great Southern goes under, a MIS investor or GSL itself ?

slim pickins
15th-November-2008, 12:18 AM
They tried to deliberately concern investors that if GSL went under, a newly appointed manager may price gouge in managing the investments.

Lets face it, the shares need to be 50 cents to get your money back, they are currently at 33 cents, and if the offer went ahead they would probably drop to 10 cents as people seek to dump their newly aquired stock.


to get your money back by my calculations the stock needs to be $1. i dont know how you see that 50c will get your money back. well mine is 2002 and 2003. plus its been growng for 6 years or so... surely it is worth more now. i mean even f you put that amount of money in the bank you would have earned interest. so to get a decent return the price needs to be $2+

unfortunately the price seems to be going down. and will probably continue to do so.

let them go bust i say. someone else will take their place. there is no bigger eye gouge then these people anyway.giving these people our trees will not save them. it will just prolong their agny and they will take us down with them.

Guff
15th-November-2008, 02:34 PM
Who was first to comment about what happens if Great Southern goes under, a MIS investor or GSL itself ?

I believe it was an MIS investor. It may be best that GSL risks insolvency, and goes under if necessary - I just cannot see the share price recovering, even in the "new Great Southern" as they claim it will become. It may not be a going concern, and there are likely to be major floors in their business model logic.

There has got to be a fair management fee for the MIS's, so can GSL provide that or are we kidding ourselves and the whole thing was doomed from the beginning?

As for the 50c, that is the "experts report" and offer floor for the calc of the quantum of shares to be exchanged.

Grumpy Old Man
15th-November-2008, 07:55 PM
I seem to remember a company advertising to buy secondary market MIS woodlots in the Fin Review last year. Does anyone recall who they were or what details?

drsmith
15th-November-2008, 08:18 PM
I believe it was an MIS investor. It may be best that GSL risks insolvency, and goes under if necessary - I just cannot see the share price recovering, even in the "new Great Southern" as they claim it will become. It may not be a going concern, and there are likely to be major floors in their business model logic.

There has got to be a fair management fee for the MIS's, so can GSL provide that or are we kidding ourselves and the whole thing was doomed from the beginning?

As for the 50c, that is the "experts report" and offer floor for the calc of the quantum of shares to be exchanged.
GSL's response to the MIS investor's query on insolvency suggests to me that GSL is trying to influence MIS investors by fear rather than rational investment argument. That speaks for itself.

I'm still trying to come to terms with how this has got past ASIC. Perhaps it was seen as being similar to property development companies merging their trusts into a single entity as Westfield did several years ago and other property groups have done since. To me the change in the nature of the MIS investors is much more fundamental and perhaps similar to a bank proposing a conversion of depositors funds into shares in the bank. If ASIC approved that under GSL's terms there would be rioting in the streets (or at least a run on the bank).

If this gets up for any of GSL's MIS's, the ultimate fallout could be very ugly. Not only could MIS investors end up with shares which are worthless (or close to it), income tax liabilities will be brought forward from harvest to the 2008/09 financial year. While selling the newly aquired shares (even for a token amount) would realise a capital loss this can only be realised against other capital gains and not income. It's a double whammy for MIS investors, particurally for those who have invested in the MIS's over multiple years and built up a large investment. The fact that the proposed arrangement brings forward tax liabilities without a garantee of sufficient income to offset this against is a clear demonstration that GSL is not acting in the interests of MIS investors.

I can't comment on the bank garantees for the MIS investors if GSL goes belly up as I know nothing about them. The key question here is whether the MIS investments are more secure as tree trunks or in the hands of GSL's management and board. The tax consequences as noted above are also a critical factor. Annexure 2 of the offer document is critical reading for all MIS investors.

Guff
17th-November-2008, 08:31 AM
I seem to remember a company advertising to buy secondary market MIS woodlots in the Fin Review last year. Does anyone recall who they were or what details?

wrt this I belive the govt/ATO approved secondary trading after a period of four years, this was also mentioned at the GSL investor information sessions -- do you know anyone that would purchase projects right now?

slim pickins
17th-November-2008, 12:39 PM
I have just talked to my lawyer, and i am trying to organise a court injunction to prevent this vote taking place next month.

in case the injunction is unsussessful, i suggest any investor in MIS that is unhappy with this arrangement contact me to organise a massive damages claim against the company.

i think there might be an action in tort law against GTP. they owed a duty of care to the MIS investors and their actions resulted in our loss.... or will result in our loss.

the aftermaket purchase of woodlots does exist it seems. they are probably being bought up by subsidiaries of GTP in order to influence the vote. that could be their ace up their sleve.

the analogy of a bank forcing deposit holders to convert deposits into shares seems pretty accurate. totally absurd. i cant belive the press hasnt got a hold of this.

to people planning to vote..... if our trees get converted into these worthless shares noone will ever buy another woodlot again and this company will be gone very very soon.

P.S. anyone that wants to buy my woodlots is welcome to do so. any information on any company that wants them would be greatly appreciated.

please Prvate message me if you are interested in joining me in lodging a court injunction.

drsmith
17th-November-2008, 01:34 PM
Further to my comments above on tax I note note that there is no confirmation from the ATO about the tax consequences for MIS holders in relation to this scheme.

This is clear from the reading of section 2.1 from annexure 2 of the explanatory memorandum (2003 plantation).

Grumpy Old Man
17th-November-2008, 09:10 PM
Given that the export price for blue gum chip (according to ITC/GTP/TIM) is so high at the moment, I can only imagine that there must be a heap of competition in Western Australia (and elsewhere) for the trees. Hence GTP wishing to trade shares for them. Are there options in the PDS for investors to individually market woodlots? Should look into this.

Find it hard to imagine that there is no other option but to trade them for 2/3 of a dead duck.

bv2726
18th-November-2008, 11:01 AM
I also went to the presentation meeting last week in Melbourne held by the GTP management.

I learnt a lot. A lot about the arrogance of the directors, and the anger that exists amongst investors towards this "pseudo-captial-raising".

The deputy CEO (I think) summed it up when he said (in response to some angry questions) something like "look, may I remind you that we do not have to be here, there is no legal obligation for us to turn up"

The crowd roared with sarcasm. It was the deputy CEO saying that us peasants should be pleased that we even got to see him.

I am going to vote no.

prawn_86
18th-November-2008, 11:11 AM
I also went to the presentation meeting last week in Melbourne held by the GTP management.

I learnt a lot. A lot about the arrogance of the directors, and the anger that exists amongst investors towards this "pseudo-captial-raising".

The deputy CEO (I think) summed it up when he said (in response to some angry questions) something like "look, may I remind you that we do not have to be here, there is no legal obligation for us to turn up"

The crowd roared with sarcasm. It was the deputy CEO saying that us peasants should be pleased that we even got to see him.

I am going to vote no.

This is the problem with corporate Australia. Its all a big boys club, with heaps of people sitting on multiple boards.

And instos tend to hold the majority of companies, so then the cycle is complete with everyone just taking the small shareholders for a ride.

Shame nothing can be done about it... :(

slim pickins
18th-November-2008, 02:09 PM
"a sarcastic roar" in melbourne..... hmmmm.. not bad. a riot would have been better.

its so hard to coordinate my efforts against GTP because I am in london right now, otherwise i would lobby and go to the press. and that gives me an idea... if there is anyone concerned about this enough to go to the press may i suggest this is the time to do so.

i am sure some publications will pay for such a story especially someone who would be hard hit by a capital gains tax bill this year, or some other hardship.

of course the scheme should not be presented as a tax write off.. rather an honest investment made in order to diversify and support australia's primary industry.

the good news is that the share price seems to be sinking, 30c as i write, which makes it plainly obvious what the MIS investors will get if they agree to this robbery.

anyone that wants the shares can just buy them on the ASX.... get 'em while the're hot :) no need to sell your trees. in my humble opinion trees will just continue to increse in price especially since most of the western world is in the grips of the environmentalists. anone using non-plantaion wood will be crucified... just like the whale hunters.

keep your trees they are very valuable. if you want GTP stock buy it seperately :)

Forenth
19th-November-2008, 08:45 AM
Slim, I agree with you whole heartedly. I am willing to join in any class action against GTP regarding this ripoff. I have contacted the tv networks to see if they'll do a story and spread the word of this sham, and I've lodged a complaint with ASIC as well. I encourage everyone else to do it, you can do it online at ASIC's website. GTP are relying on the fact that we don't know who each other are or can discuss it to get this through.

I received a notice from the company this week telling me I can expect a return of over $3100 / woodlot on my investment when it matures. WHAT! Don't they know they're trying to steal it? Bizarre. Plus they only valued them at $2600 for the purpose of the scheme so its an admitted ripoff now even without the share price factored in.

I'm attending the Albury meeting of investors tonight. I'll let you all know how it goes and I'll spread the word about ASIC and any class action. Anyone attending other meetings should also do so. Get investors details and let's make a list... we can't wait too long.

If we are FORCED to become shareholders then collectively we'll be the majority. First shareholder meeting we vote to sack all unnecessary personnel, including directors, and also from that moment that all directors remuneration, payouts, bonuses etc be paid in the form of GTP shares at 60% above market value. If they say its a fair deal for us then its a fair deal for them.

Lastly, if they do this then who would ever invest with them again, knowing that they have a history of seizing the investment for rubbish shares. This will absolutely be the start of the end for GTP, if it hasn't already started.

In my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation". So each grower invests as an individual and is not bound by the decisions of other growers. Majority votes can't be taken for anything but early termination of the project, which is written as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This seems to be a breach of contract.

In 2000 they listed 600 000 shares in the company. A director then and now, a Mr Young, now has almost 50 000 000 shares. At least someone's been making money while our investments have been failing.

drsmith
19th-November-2008, 09:21 PM
In my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation". So each grower invests as an individual and is not bound by the decisions of other growers. Majority votes can't be taken for anything but early termination of the project, which is written as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This seems to be a breach of contract.
If that statement's in one, it's most likely in all of them.

Check your original prospectusus folks.

bv2726
20th-November-2008, 09:14 AM
I'm attending the Albury meeting of investors tonight. I'll let you all know how it goes and I'll spread the word about ASIC and any class action. Anyone attending other meetings should also do so. Get investors details and let's make a list... we can't wait too long.



I hope you are successful. At the Melbourne meeting, there was some real venom put forward by a couple of financial advisors (venom towards the directors). One or two stood up, had loads of questions, threatened (and promised) to go to ASIC, and also offered to leave his name with anyone who wanted it.

Forenth
20th-November-2008, 09:58 AM
Yesterday I attended the Albury meeting of investors and the directors have learned their lesson from the previous meetings in capital cities where they were harangued.

Tim Jess, Cameron Rhodes and Natalie Roe (?) spent 90 minutes going over the figures, making sure that the audience, who were more retirees than not, were still confused. They introduced a break before the Q & A so that these confused investors could head home and not hear the questions that those who remained were asking and so gain an insight into what are the real concerns that everyone should be worried about. There were still some angry people in the room.

The directors then cut off Q & A after only 6 or 7 questions, they didn't like the direction the questions were going, ie. how can you expect us to allow you to rip us off. You might be increasing revenue from 5.5% to 100% of woodchip sales but we're taking a big loss for you to do that.

The directors presented figures and graphs showing that while the assets of the company would increase, the assets per share should in fact halve with this scheme. They tried to argue that because the share price is under this level then it will go up. If the share price has been sliding for years independently of the current assets per share, then halving the assets per share is NOT going to help the share price, and they said they would not guarantee that it would, but kept arguing that it COULD. And any benefit to ever appear to investors requires that share price to increase a lot!

This dumps a huge risk on investors while the company gets a definite 18 times increase in revenue. We investors currently have hundreds of millions of dollars in investments physically on the ground right now, some coming ready to harvest. They want to take that from us and give us the huge risk that the share price has to almost double from its current level just to get us back to where we are right now. Also we would be hit with an extra tax bill this financial year, something no one has planned for, especially retirees.

The whole presentation argued that the share price should go up to the 73 - 91 cent range from yesterday's close of $0.30 if the scheme goes ahead. I asked if they would guarantee the price and of course they said 'no way'. The price has been falling for 3½ years and shows no sign of improving, especially after the ATO ruled against new investments being tax deductible. When assets per share are diluted then why would the market increase its confidence in the share?

Like everyone I plan to implement measures to reduce my tax in the year my investment comes due. Overall, I have calculated that my after tax investment value goes from $2638 / investment to $1487 of shares which are still falling in price, plus a tax bill of $446 if I can't minimise tax in time. Multiply this by your number of woodlots and OMG. This is using Great Southern's own figures. Using my own figures its worse.

This is an attempt to take hundreds of millions of dollars out of investors' pockets, and as mentioned earlier a large number are retirees who were relying on this income to mature year after year and keep them solvent through their retirement. I'm in my early 40's and until now was thinking of my own investment as the beginning of a retirement nest egg. I wasn't planning on it being decimated just as it was coming due.

Most of the votes will be cast by the middle of next week as Great Southern is pushing this vote through by the end of this month. This gives investors only a couple of weeks to work their way through the 191 pages of financial blurb that was sent to them. At the very least one could argue when this much money, especially retirement monies, are involved a longer timeframe should have been given to allow for analysis.

There is currently enough confusion among investors for a yes vote to meander its way through. I have also contacted the media again. If the vote goes yes and you're unhappy, leave your details at [email protected] If you want to join any class action or damages claim we can then get back to you. Write this email down, you could well be wishing you did. Keep it safe.

drsmith
20th-November-2008, 10:27 AM
There's an article on this in today's Sydney Morning Herald.

http://business.smh.com.au/business/cautionary-tale-money-does-not-grow-on-trees-you-know-20081119-6bji.html?page=1

irenebrisbane
21st-November-2008, 09:01 AM
We, too, like Forenth attended the "seminar" on the Gold Coast three days ago and the format was exactly as portrayed in his report. Confusion reigned and they cut the Q & A session after approx 6 questions. As stated they did adjourn after the "explanatory meeting" and it was depressing to see that less than half of the attendees returned for the Q & A session. LIke Forenth, we are worried that there will be enough "yes" voters to carry this motion through. Interestingly, the director(?) asked for a show of hands: existing shareholders; cattle investors; growers of tree lots. The show of hands for cattle investors was minimal; shareholders likewise; tree lots: quite a handsome show of hands. Who were the remaining attendees who did not raise their hands at all? Presumably they would be there at the invitation of Great Southern so must have had some concern. Puzzling. They were the ones who did not return for the Q & A session. We have already cast our "No" vote by proxy to make sure we get it in on time. I do have this sinking feeling, going by the attendees at the meeting, that the our votes will not be enough to stop this madness going ahead.

Forenth
21st-November-2008, 09:34 AM
I have again lodged a complaint with ASIC including extra details. It read:

Great Southern Limited (GSL) continue to press ahead to take the assets of agribusiness growers even without their consent. The basics of the scheme if successful are:

- GSL gains extra revenue from the sale of the harvest, from 5.5% to 100% of proceeds. An increase of 18 times.

- By the issuing of new shares to growers as payment, GSL reduces it's debt gearing to 29% of current levels. This share issue requires minimal actual outlay from GSL.

- Growers are offered these shares at $0.50/share, despite a current market price of $0.30. An immediate 40% loss.

The problems with this are obvious:

- growers don't want shares, if they did they'd go buy them at $0.30.

- growers invested for the long term. Many are retires who invested their savings in projects over successive years. A lot have hundreds of thousands of dollars involved.

- The effect on the value of growers investments is obvious. In my case using GSL's own figures each woodlot of my investment, due in 2011, will distribute $3160 after expenses and deductions. This is close to my own estimate using the foresters reports and prices etc. Most of this value is already on the ground as timber since the project is 75% complete.

I will implement tax minimisation, at the very least via salary sacrifice of salary, so my maximum tax rate will be 16.5%. Overall I take home $2638 of this.

GSL want $0.50 for each share worth $0.30. They are capping the # of shares as 4958 / woodlot, so GSL pay $1487 pre tax for my $2638 post tax of standing timber. If I cannot be effective with tax minimisation in the remaining half of 2007-2008 I will pay $468 tax (@31.5%). Post tax I receive $1019, vastly less than the $2638 I am already set to receive.

Natalie Egan, a GSL manager currently presenting information sessions around the country agreed at the Albury meeting that any possible benefit to growers relies on the share price increasing substantially, and that if it doesn't they will make a large loss. An admission that this plan inflicts huge losses on investors. Cameron Rhodes, CEO, at the same meeting agreed that GSL make no guarantees whatsoever that the share price will improve. He cut off the meeting after 7 questions, perhaps because he didn't want it to become like the Melbourne session where management responded to angry questions with arrogance.

Natalie stated that GSL value the company higher than market value as the assets / share would be around $0.90. However, GSL's own figures show that assets have been stable around $2.00 / share for the entire period of the last 3½ years where share price has fallen from $5.03 to $0.30 in a steady downward trend. The last 18 months have been especially consistent.

This is a clear demonstration that assets have no effect at all on market valuation of the company, and to use them as justification of future share prices is ludicrous. This is especially true if assets/share will halve under this plan.

This scheme is only beneficial to GSL, by the huge extent of 18 times more revenue for almost no cost, but inflicts massive losses on investors who already have timber on the ground. GSL want them to take the strong and increasing certainty of their return and replace it with the substantial risk that the share price improves the large amount needed to get back to where growers are right now. ASIC cannot fail to see the implications of this to tens of thousands of growers. I have 5 woodlots but many have dozens and some more than 100. The effect will be similar to those investors in HIH.

Banks do not decide they need more revenue and seize investments by issuing shares with a 60% premium on price.

With regard to the contract for the investments, in my original 2000 prospectus, section 12 of the Lease and Management Agreement states: "The Lease and Management Agreement confers individual rights on each Grower. The Agreement does not create any association or partnership between the Grower, the Responsible Entity and other persons having an interest in the plantation".

So each grower invests as an individual and is not bound by the decisions of other growers. There are no if's, but's, exemptions or other condtions. No partnerships or collectives are established. The decision of one investor to sell cannot be forced on another.

There is also that this scheme has to be fair in all facets, not just financial. The scheme allows individuals to still accept the scheme if the majority vote no but forces all growers to be involved if the vote is yes. To be fair this should include an option for individuals to opt out in this circumstance.

Under section 6 of the Constitution majority votes can't be taken for anything but early termination of the project, which is defined under Procedures of Termination as being the harvest, sale and distribution to growers of proceeds, not transfer of ownership which this scheme is. This is a direct breach of contract.

This entire scheme is hugely detrimental to the interests of the investors and will realise losses of 60%, or more to those on higher tax rates, which do not have to occur at all as growers already own the timber which is already existing. This affects hundreds of millions of dollars owned by tens of thousands of investors.

The scheme also involves breaches of contract on two counts; forcing the decision of one grower on another when explicitly forbidden, and holding a majority vote for a purpose other than early termination of the harvest, in this case GSL seizing the harvest.

Many shareholders are angry and we hope and strongly urge ASIC to investigate this matter quickly due to the large number of investors and value involved, the devastating effects on those investors, including many retirees, and the fact that GSL want to push this all through with a vote on 1/12/08. At least please force GSL to postpone this scheme and vote until ASIC have investigated.

Thank you.


If you are concerned, angry, or just confused and need more time to look over it all then WRITE TO ASIC AND LODGE A COMPLAINT. go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288

Stick to the facts and figures, not too much emotion, and urge them to investigate. Ask them to at the very least force GSL to postpone the vote until those who are confused can have time to clear their mind and make an truely informed decision.

I have also contacted the newspapers in most capital cities in letters to the editor. Please everyone also do this. For most of them you can do it at their web sites.

Let's not sit by idly, let's get some action going!

irenebrisbane
21st-November-2008, 10:59 AM
I will be lodging my complaint today as well as writing to media. We are retirees and this is impacting on our finances - particularly in such a volatile global meltdown - adversely, of course. Many thanks.

Forenth
21st-November-2008, 08:14 PM
Remember the $2.00 net tangible assets being promoted in the 'information seminars'? I've just found a message from Jackob made back on 27/7/08 which I quote:

"GTP’s NTA (net tangible assets) is officially about $610m, or say $1.90/s (at 30/3/2008).

Suppose that GTP could sell 1/10 of its assets in the first year, and what it could get would be ($610m*1/10) = $61m. (The 1/10 assumption is lenient, as most of GTP’s lands are for the 11 year woodchip schemes, and the size of them 11 years ago were only a small fraction of the present).

Now, GTP has debts of ~$700m (at 30/3/2008), which needs interest payment about $70m a year. In addition, GTP has about $2.5 billion worth MIS projects under control, which need at least 2% of the total value as the maintenance cost, that is $50 m.

So, the total expenditure needed would be at least $70m+$50m=$120m, which is about twice of the $61m NTA sale results. Plainly, GTP would indeed go oblivion in such a way.

Thus GTP’s $610m ($1.90/s) “NTA” is only a pie in the sky, which you can never get it. The problem in GTP’s NTA valuation is that it has hidden its liability for maintenance of the existing MIS schemes and service of existing debts in the future. I believe if these hidden liabilities were correctly included, the present GTP’s NTA should be negative."

If that's all true the share price has no backing at all and management are misleading us. This explains clearly the ENTIRE reason for their grab at our money. We know they're not doing well but wow. Cameron Rhodes must really be trying hard to get those performance bonus options issued at $0.00 that are listed in the memorandum.

drsmith
21st-November-2008, 09:19 PM
Based on the above argument the NTA backing is, technically speaking, real (to the extent that valuations on their assets are realistic) but they can't use these assets to finance the day to day running of the business or the cost of credit. This is where the revenue stream from harvesting of the MIS assets comes into play.

The simplest and most effective argument against this is section 12 of the 2000 prospectus as noted in Forenth's letter to ASIC a few posts above, assuming it is common to all the affected forestry prospectusus.

hodgy
22nd-November-2008, 06:53 PM
Hi
I have 2007 Cattle and while I have not seen any discussion on the Cattle I assume the theory is much the same as woodlots. Is it?
Thanks to the forum contributors for some pointers.
I am pretty confused by this. I thought I had made mid a term investment in a managed investment scheme. If I wanted GSL shares I would have purchased them.
I have decided to vote no and am finding it hard to understand how a majority vote could force me to relinquish my investment and then have to deal with the other implications eg. tax.
I checked the Cattle PDS and it also has statements in the same vein. "The RE must carry out its powers in accordance with section 601FC(1) of the Corporations Act which includes act in the best best interests of Applicants and Graziers, treat Applicants and Graziers who hold interests of the same class equally etc".
"No partnership is formed between the Grazier and the RE, or other Graziers."

Any comments appreciated.
hodgy

slim pickins
23rd-November-2008, 12:09 AM
hodgy,

its basically like this, if this vote fails and i obviously hope it will, I will give you the same offer for your interst in the cattle project.

that is.... i will give you (if you want) less then a third of what you paid for your investment initially. i can pay you in cash or even GTP shares if you like.

after the deal is executed... i can guarantee you will be left with very very little. so my offer is open to nayone that is thinking of voting yes to this scheme. just vote no and contact me for the same deal.

cheers :)

David Mond
23rd-November-2008, 12:53 PM
I have just talked to my lawyer, and i am trying to organise a court injunction to prevent this vote taking place next month.

in case the injunction is unsussessful, i suggest any investor in MIS that is unhappy with this arrangement contact me to organise a massive damages claim against the company.

i think there might be an action in tort law against GTP. they owed a duty of care to the MIS investors and their actions resulted in our loss.... or will result in our loss.

the aftermaket purchase of woodlots does exist it seems. they are probably being bought up by subsidiaries of GTP in order to influence the vote. that could be their ace up their sleve.

the analogy of a bank forcing deposit holders to convert deposits into shares seems pretty accurate. totally absurd. i cant belive the press hasnt got a hold of this.

to people planning to vote..... if our trees get converted into these worthless shares noone will ever buy another woodlot again and this company will be gone very very soon.

P.S. anyone that wants to buy my woodlots is welcome to do so. any information on any company that wants them would be greatly appreciated.

please Prvate message me if you are interested in joining me in lodging a court injunction.

Dear friend,

I am the Principal of David Mond & Associates.I spoke out against the proposal at the Melbourne meeting.Our accounting firm's clients has around $2m invested in woodlotas via myself and clients.

I am also director and part owner of Recoveries Corporation and my partner Leon Sholl is an investor and solicitor director of Rec Corp and the company also owns Mason black Lawyers,litigation specialists.
We are very keen to issue injunction proceedings this week. We are sending a letter to Cameron Rhodes to that effect tomorrow.

We need to harness all forces to unite in this purpose as it will minimize shared costs and provide substantial strength against Great Southern and its directors and advisors.
There also a number of Financial advisors who no doubt wish to participate in this application.

The issues before a court include:
1. This proposal is in contravention of the contract entered into by plantation owners with Great Southern."There are currently no provisions in the Project Constitution or the Corporations Act to allow the exchange of interests by all Project Investors in the 2002 (read same for all years) Project for GSL shares." page 4 Explanatory memorandum
2. There are loans outstanding against the plantation assets.These loans are based on the contract between great southern and the plantation owners as tree owners and not substituting shares for trees.Changing the underlying asset affects the loan agreement.
3.The tax payable on the shares brings forward any liability by 3-6 years.
4. There is no cash with the offer to pay back loans and the tax liability.
5. If we do nothing " your woodlots will be automatically acquired by a GSL group company" page 4 explanatory memorandum.
5. The plantations are the property of the investors. GSL has large debts to financial lenders and they are preferential secured creditors. On liquidaqtion,the shareholders would get nothing.
6. Given the current economic crisis,many investors will be forced to sell the shares to repay the debt and pay the tax.The share price will go to nothing and they will lose the asset of trees and be left with debts.
7.The plantation investors were never consulted prior to issuing the scheme proposal.Steven Cole says he recommends the offer in the absence of a superior proposal.
8.Mr. Steven Cole cannot in our view be considered to be an independant person as a Director of GSMAL.He and his 2 "independant" collegues sit with Mr. Rhodes and another director of GSP on the GSMAL board.Their fees come from Great Southern. The plantation investors have no representation.Mr. Cole and others at GSMAL have, we say,breached their fiduciary duty of care to the tree owners.
9.,Mr Duncan Calder of KPMG and KPMG have failed in their duty of care to plantation investors.
10.The offer was amended as the first offer was commercially a rip-off. Our view is that nothing has changed.

Please call me on 0418360349.

Kind Regards
David Mond

Forenth
23rd-November-2008, 02:52 PM
To all,

I have sent the following to KPMG regarding their expert's report. After all, how can they continue to support this scheme in light of the current share price? We all know it will be lower than $0.285 by the end of the month, that's one thing I would bet on.


Dear KPMG,

I am deeply concerned that KPMG in WA have issued an expert's report on the proposal for Great Southern Limited to issue shares in GSL to investors in forestry and cattle projects in exchange for those projects which states that this is a fair deal for investors.

At the time of the report the share price was $0.435 and had been dropping for over 3 years, almost linearly for 18 months. Issue price is $0.50 to be made after 1/12/08. Last sale on Friday was $0.285.

The effect on the value of growers investments is obvious. In my case using GSL's own figures each woodlot of my investment, due in 2011, will average distributions of $3160 after expenses and deductions. This is close to my own estimate using the foresters reports and prices etc. Most of this value is already on the ground as timber since the project is 75% complete.

I will implement tax minimisation, at the very least via salary sacrifice of salary, so my maximum tax rate will be 16.5%. Overall I take home $2638 of this.

GSL want $0.50 for each share worth $0.285. They are capping the # of shares as 4958 / woodlot, so GSL pay $1413 pre tax for my $2638 post tax of standing timber. If I cannot be effective with tax minimisation in the remaining half of 2008-2009 I will pay $445 tax (@31.5%). Post tax I receive $968, vastly less than the $2638 I am already set to receive. This translates to $0.195 / share. Share price has to increase over 170% for me to just get to where I will be anyway, where is the assessed value payable as extra to me for this substantial risk?

These are real numbers which will devastate my finances and those of tens of thousands of investors, in particular the large proportion of retirees, some of whom have over 100 woodlots affected. Overall hundreds of millions of dollars are lost, the effect will be similar to HIH and I'm sure will gain the same media exposure.

KPMG and GSL state that assets/share are greater than $0.50, but share price has dropped from $5.03 to $0.285 with NTA being stable around $2.00/share. Clearly this has no relationship whatsoever to market value. How can this be claimed to cause it to increase?

Where is the earnings based valuation of GSL? This is the usual value of a company. Would KPMG buy these shares? Look at the share price and earnings and no one would.

How can KPMG as a corporate citizen continue to support this proposal as being in the best interests of growers? With these dramatically altered circumstances KPMG should feel compelled to withdraw support for this proposal and alter the expert's opinion report appropriately.

Thank you.


Also, everyone please respond to David Mond with support.

slim pickins
23rd-November-2008, 10:55 PM
dear david,

you have pretty much hit the nail on the head with the outstanding legal issues in this matter.

only a couple of things to consider... there could be an action against KPMG forcing them to withdraw their advice. and also clarification of the advice which states "offer should be accepted in absence of a better offer" that is just misleading and wrong.

second thing is the possibility of allowing the vote to go ahead cause it might actually fail. but that risks getting some MIS investors on board with the company's proposal, and a slow acquisition creep of woodlots, over the next year or so.

also even if an injunction is not granted the court should be asked to rule that the offer is not binding on MIS investors that voted against it.

well apart from that you have it pretty much covered.

you are in victoria it seems, however the contract that i have entered into with GTP was in NSW i am uncertain if that has any juristictional consequences but regardless, i have a lawyer in sydney who will be doing a similar thing. he will be calling MIS investors and trying to get them on board in the class action this week.

its the only way to keep the costs down. any MIS investors concerned and want to take acton in NSW should contact,
"Johnston Vaughan solicitors" and speak with Amil. he is a good guy and a very sharp litigator. his number is - 02 95876833

personally i dont care if you contact Amil or David, the law firm that handles the matter in each state should be the one that can organse the most people sooner and act in time.

there is very little time left. monday and tuesday should be the days that MIS investors are contacted and retained as clients, tuesday night should be an all nighter, preparing the court work and that thing has to be filed in court very soon afterwards. just as an afterthought, isnt the only juristcition that can stop this vote WA where the vote is taking place or is this thing in the federal court because of the corporations act. its nto easy... the lawyers will have to earn their money this time :)

irenebrisbane
24th-November-2008, 09:15 AM
This is in reply to David Mond's comments and also Forenth. We live in Qld. Does David have jurisdiction in this state or should we look for someone local. At the moment we do not know of anyone here who would be able to handle the subject at such short notice.

Many thanks

drsmith
24th-November-2008, 10:51 PM
While at the local fish and chippery this evening I saw an article in Saturday's West Australian on this.

According to the article a former Great Southern director, John Hassen was trying to contact 1998 and 1999 MIS woodlot owners to advise them against approving this scheme. The article also revealed that he has woodlots in the both the above schemes.

brty
24th-November-2008, 11:36 PM
Hi,

I see the NTA of this company mentioned as holding up the SP, especially regarding land assets.
I wonder if the NTA of this land takes into account the rehabilitation of the land to be fit for farming?? In the South west of Victoria a good Dairy farm will sell for $6,000-$7,000 per acre, GTP bought many of these at lower prices.
Today, with the timber companies not buying, the price of good dairy land seems to be around $5,000 pa.
However to grub stumps, remove/burn them and re-establish pasture, build fences and provide stock water, there is a cost of around a couple of thousand dollars pa, plus a time factor.

A year or so ago, there was some land sold that was covered in stumps (from pine plantation) just after harvest, prices achieved were $1000-$2000 pa. Land in this area has not risen since. (if anything it is probably a bit softer).

My question is which valuation GTP have on the land assets?? the $5,000-7,000 or the $1,000-2,000??? It could make a big difference in what the companies NTA are.

brty

bv2726
25th-November-2008, 08:41 AM
While at the local fish and chippery this evening I saw an article in Saturday's West Australian on this.

According to the article a former Great Southern director, John Hassen was trying to contact 1998 and 1999 MIS woodlot owners to advise them against approving this scheme. The article also revealed that he has woodlots in the both the above schemes.

Someone had this letter at the Melbourne meeting and tried to partially read it out and ask some of the questions from it. The people on the stage (i.e. the Directors) already knew about the letter and tried to snuffle out the question asker....who pressed on regardless.

I can't remember the question or the answer...

Forenth
25th-November-2008, 09:13 AM
John Hassen wrote to 500-odd investors in the same projects as himself, giving the reasons he will vote no and recommending that everyone get independent financial advice for their own circumstances. He was not only a pre 2000 GSL director but has also been a partner in Price Waterhouse.

In response GSL wrote to around 4000 investors, rewriting / editing his questions and then gave the same brief, meaningless answers with no substance which they've been giving us in meetings They even included his private financial information, which is outrageous.

The letters are too long to post here but are now in the public domain.

I have also received a similar letter from a concerned investor from Coogee who has the same project as myself. Despite GSL's best efforts he too has realised that $0.50 for a $0.28 (and still dropping) share with only speculation about it improving is an incredibly bad deal.

Where is ASIC in all this?

irenebrisbane
25th-November-2008, 10:34 AM
John Hassen did write to us as growers in the woodlots 1998 and 1999. He simply reaffirmed what we had decided already, having perused GSL's explanatory memorandum, that we were being ripped off by their proposed scheme. I find GSL's reference to his financial situation as beyond the pale and an incredibly unprofessional response to John's original letter to GSL. This simply reinforces the calibre of the GSL directors/personnel in their frantic bid to get their scheme off the ground.

I think it has done them more harm than good.

Forenth
26th-November-2008, 10:37 AM
Great Southern have announced to the ASX the VWAP for shares is $0.2845. The document is available at:

http://imagesignal.comsec.com.au/asxdata/20081125/pdf/00906967.pdf

So they are continuing to push ahead with this madness, trying to make investors pay $0.50 for shares they admit have a market value of less than $0.29. BTW, last trade as of right now was $0.275.

They have made no adjustments to the offer to compensate for losses inflicted, just said that investors MIIGHT be able to offset their new tax liabilities if they take action in the next 7 months.

I encourage anyone to get some financial advice if you're confused and if you're concerned about how it affects you then contact ASIC and maybe David Mond or obtain your own legal advice.

Wally1952
26th-November-2008, 10:36 PM
What are people's thoughts on the dividend payment? 100% fully franked. Looking back in dividend history, some years paid around the 15c mark. If I go the share option I stand to get around 42,000. At 15c say, that is $6,300 fully franked. Assuming they continue to pay dividends, am I thinking in the right light here? I know all the against arguments, and at the moment I am a bit unsure which way I will go.

irenebrisbane
27th-November-2008, 08:22 AM
You hit the nail on the head, Wally, "assuming they pay dividends". All questions at the seminar that we attended that were aimed at future dividends were smartly knocked on the head by the directors/financial experts.

Forenth
27th-November-2008, 08:23 AM
What are people's thoughts on the dividend payment? 100% fully franked. Looking back in dividend history, some years paid around the 15c mark. If I go the share option I stand to get around 42,000. At 15c say, that is $6,300 fully franked. Assuming they continue to pay dividends, am I thinking in the right light here? I know all the against arguments, and at the moment I am a bit unsure which way I will go.

Since you asked, it sounds like you're hoping dividends over time will make up for the loss you'll take now. The following is only MY opinion: GSL have loans in excess of their assets and seem to borrow to have the cash to be able to operate and pay dividends. Even if they seize our assets in this scheme they will not provide enough cash to balance it out. Remember the 98 and 99 plantations are small, the 2000 is the first substantial one and its still a few years away, and still won't be enough.

Overall I see this company fading away but not for maybe 5 or more years, enough for our trees planted up to 2003 to be harvested. Under no circumstances would I ever want to have shares in them, there are MUCH better investments out there. Plus our plantations exist, they have value. Why should we take ANY extra risk just to try and get back to that value?

This is only my view about my situation and this question is exactly why the timeframe of the scheme is far too inadequate. Wally1952, please get some independent financial advice if you still have time.

Forenth
27th-November-2008, 08:40 AM
GSL have postponed the investor and shareholder meetings...

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00907714

They say there's more information to be sent out, but it would have to be amazing to change my opinion. They still intend to go ahead with this one way or another.

Nothing about the vote being halted OR restarted once new information or a revised offer is issued.

bv2726
27th-November-2008, 08:42 AM
Great Southern have just released a statement (to the ASX) that the 1st December meeting has been adjourned...and they (the directors) will release more information.

More information is : an updated independent experts conclusion and any change of the directors recommendations.

Can anyone else comment on this? I am puzzled. They (the directors) said (at the Melbourne meeting) that everything was rosy, you have all the information you need, KPMG think its a great idea etc.

Now this? What more information could they have? (or have they been hiding?) What is there to update? And it talks about or implies a change of directors recommendations. Thats the way I read it.

Anyone else?

Aussiejeff
27th-November-2008, 09:47 AM
Great Southern have just released a statement (to the ASX) that the 1st December meeting has been adjourned...and they (the directors) will release more information.

More information is : an updated independent experts conclusion and any change of the directors recommendations.

Can anyone else comment on this? I am puzzled. They (the directors) said (at the Melbourne meeting) that everything was rosy, you have all the information you need, KPMG think its a great idea etc.

Now this? What more information could they have? (or have they been hiding?) What is there to update? And it talks about or implies a change of directors recommendations. Thats the way I read it.

Anyone else?

They also announced that the Preliminary Full Year results to 30 Sep 2008 are to be released earlier than 1 Dec. Maybe the results are a bit unsettling and they don't want another "confrontational" meeting and are hoping the Xmas break will "soothe" shareholders before the shebang?

I don't hold, but am an interested spectator since my bro-in-law holds plenty. He bought in at 80c and refused to sell from $4.50 down to the present price "because the dividend is great and it will bounce back". Even he seems a bit glum of late....

gorillapolice
27th-November-2008, 11:19 AM
There is a possibility here that, in light of the adjournment, investors will be required to vote again.

If so, I would imagine there would be advisers who are out to seek the blood of GS given that many have already spent thousands of dollars advising their clients on these matters.

I'm not surprised - just in awe that a company like GS can't swallow its own arrogance here and realise how deep they're in.

I fail to see how GS will be able to sell another tax effective product again.

slim pickins
27th-November-2008, 03:29 PM
wow... i have just read the company announcement... and although i consider myself to fairly proficient in the english language i could not for the life of me work out what the announcement is trying to say.

it sounds like convaluted jiber jabber. i have now read it about 10 times and it doesnt say anything except for some sort of an adjournment. some kind of delay.?!?!?!? doesnt say what is really being adjourned or who is affceted. they promise to disclose some more information but..... thats it. how did GTP employees ever get through year 10 english if they write like this. if you handed that "announcement" in as high school homework you would fail.

they are just trying to delay the inevitable.... they know which way the vote will go. baiscally anyone clever enough to have money to invest in a large number of woodlots is smart enough to know what is going on here.

those with a few woodlots here and there... thier vote will make no difference anyway.


and i think GTP has realised that they cant force people to convert their woodlots to shares so they are just trying to get as many woodlots from investors as they can. mainly the disorganied ones with little interest in the project..... i bet people with less then 10 woodlots wont even bother to vote.

and why not! the company sees an opportunity to get something at a bargain price that it will sell for about 8 times more then it paid. they'll essentially pay $900 or so for a woodlot and sell it for $7000 in a couple of years time. many people will just say oh its too much trouble i just dont know... do what the direcors say.... even KPMG thinks its a good idea. :)

of course the woodlots are worthless accoriding to the company. they are almost a liability better get rid of them because these trees might not even exist in this financial turmoil..... that is..... until GTP gets a hold of them......... once GTP gets a hold of the woodlots they are suddenly very precious and safe assets valued at $450 milion that the company will be able to sell to everyone and masisvely boost its revenues and pay off their $800 million debt.

anyone that likes GTP and thinks they are doing well... i ask you tha you take all th emoney you have, sell your family home if you have to and buy these fantastic shares. :) just think of all the "franked dividends", your home will after all probably fall in value in the next few years.

why not just leave us who own the trees alone. after all our trees are solid wood in the ground, insured, gorwing, and they will be sold to the japanese for double what we bought them for.

they pay no dividends, but they dont have to repay $800 million in debt to anyone, they dont make decisions and they arent going to go bankrupt. i cant say the same for GTP.

this company is worth $71 million as of right now. they owe $800 :) they spend somehting like ... not too certain but something like $9 million of director and mamagement salaries per year. correct me if i am worng... thats 12% of company net worth spent on salaries per year. :)

and this company worth $71 million..... i mean you can buy it all for 71 mil.... everything.... land, direcotrs, all future growth, all their buildings and all their land... everyhting for 71 mil. :) and they want our trees worth $430 million.

well they clearly cant afford them so let someone who can afford to buy them. sell my trees on the open market thank oyu very much. if GTP wants them they can pay market prices. i know ill get more for them if i sell them as firewood on the side fo the road then the GTP offer.

slim pickins
27th-November-2008, 03:45 PM
oh whoops.... GTP is worth only $69 million now... thats a $2 million dollar loss in value in 10 minutes... at that rate..... oh dear. and i am loking at their PE ratio.... it says N/A... that means they have no profit. hmmmm....

the way this is going i think ill just buy GTP with the change in my pocket.

when this is over they will never be able to sell any invesment to anyone. the shareholders know it. its game over for them. i think the directors of GTP..... if they open their office windows, they will just be able to hear the chruch bell toll.

bv2726
27th-November-2008, 04:27 PM
those with a few woodlots here and there... thier vote will make no difference anyway.

and i think GTP has realised that they cant force people to convert their woodlots to shares so they are just trying to get as many woodlots from investors as they can. mainly the disorganied ones with little interest in the project..... i bet people with less then 10 woodlots wont even bother to vote.


I am a little guy with less than 10 woodlots (in one year).

I definitely will bother to vote.

NO!

Grumpy Old Man
27th-November-2008, 05:04 PM
I have today done a bit of research into this issue. There are a number of genuine export woodchip companies and operations in Australia purchasing hardwood chip and logs including (but not limited to):

1) Tasmania- Gunns;
2) WA - WAPRES;
3) VIC - Midway and Australian Paper;
4) NSW - Boral, South East Forest Exports (SEFE)

Institute of Foresters of Australia (http://www.forestry.org.au/) can provide contact details for qualified independent professional forestry consultants. Their Registered Professional Forester scheme includes numerous General Practicing Foresters who can advise on such matters.

If growers collectively employed a forestry consultant to represent their interests, it should be possible to market wood to export companies independent of GTP if this is the desired outcome.

Good luck...

Longhaul
27th-November-2008, 05:49 PM
Yeah - good luck with that.

Could've sworn GTP owns the land, and is managing people's woodlots in drought conditions.

Anyone would think MIS holders own the whole shooting match (except for the debt of course :rolleyes:).

Whether or not you think your deal should be better, you are in it together with the company.

Grumpy Old Man
27th-November-2008, 09:23 PM
Longhaul:

Woodlot investors are customers of GTP - not part of GTP.

Woodlot investors dont own 'whole shooting match', only the assets of the MIS scheme. Given that these are the ONLY effective assets given land is encumbered and GTP spent all the cash, why would we now want to be saddled with the debt mess that GTP management have created?

Big difference between a customer and a shareholder. Big surprise coming.

:)

Grumpy Old Man
27th-November-2008, 10:26 PM
National President of Institute of Foresters of Australia is:

Name: Peter Volker
Role: National President
Email: [email protected]
Division: TAS
Phone: 03 6233 7444

Good place to start...

:)

Steven 8675
27th-November-2008, 10:59 PM
Why hasnt ASIC or A Current Affair had somthing to say about Great Southern and the scam that seams to be unfolding?

slim pickins
28th-November-2008, 02:33 AM
longhaul,

so what if they own the land, as far as i remember MIS owners have leased the land. it doesnt matter who becomes the next land owner. they have to honour that lease as far as i know.

i dont know about drought.... is the drought everywhere in australia? do trees stop growing in a drought? are the trees still knee high because of the drought? as far as i know Blue gum is a native australian tree that has evolved to grow well in australia and australia has droughts all the time. droughts are probably good for it. :) excessive rain will probably kill the blue gum. even so.... worst case scenario the yield is 10% less then it should be.. so what.

why doesnt a current affair report the story.. maybe it doesnt appeal to their viewers. its not quite on the same level as "that farmer still cant find a wife"...... and even if they did air the story.... many people would just say... hah... the whole thing stinks ...tax evaders and crooked directors, they all deserve each other. i hope that farmer finds a wife :)

and i dont mean to insult anyone with less then 10 woodlots... i mean that investment is about half a years salary. not small at all, but where are the MIS investors that will vote yes to this proposal......

there are several categories of people that i expect to vote yes or abstain to this... and let me list them if i may... and i dotn mean to be crass although it might sound like i am, but these are the only reasons i would encourage people to vote yes

1) if you are terminally ill
2) if you are over 78
3) if you have just committed a major crime and have not been arrested yet.
4) if you are about to go bankrupt and this is the only way to get some money, and i mean the only way.
5) if you have already sold everything you own in order to buy GTP shares and you really really want more.
6) if your mum or dad, husband or wife are on the GTP board of the directors and you just cant bear to see them publically humiliated.
7) if your spouse is abotu to take all your assets in a nasty divorce and you want to ensure they get nothing. :)

then please vote yes for your own good

mark_au
28th-November-2008, 09:48 AM
longhaul,


why doesnt a current affair report the story.. maybe it doesnt appeal to their viewers. its not quite on the same level as "that farmer still cant find a wife"...... and even if they did air the story.... many people would just say... hah... the whole thing stinks ...tax evaders and crooked directors, they all deserve each other. i hope that farmer finds a wife :)



What are you trying to say about our "flagship"current affairs programs, its not like their only interested in running "Puff pieces", they do serious stories.. like, umm, they interviewed britneys mum ;-)


60 minutes has really lost its way........
sadly even the 7:30 report is getting a bit lightweight from time to time but its still a beacon of shining light

:cool:

gorillapolice
28th-November-2008, 12:40 PM
Share price listed at $0.21 - you would be crazy to take this offer up given the shares are a near 30 cents below what they are offering investors.

This is a time delaying tactic designed in order to get investors who haven't already voted to vote yes by trying to provide them with more information that puts the offer in a better light.

But the longer they hold out the worse the share price is going to get, it's inevitable now, surely.

Forenth
28th-November-2008, 01:49 PM
Better make that price $0.20 as of now, and they want investors to pay $0.50. Any offer based on today's price would be out of date by tomorrow.

Include tax and the price has to almost quadruple just to break even with where the investment would be anyway. I'm a 2000 investor and why would I ever want to take that risk when my investment is 80% grown and has a strong certainty of the return?

GSL would have to offer a stunning premium to accept their new scheme, whatever it is. Gorillapolice could be right, maybe there is no improved offer and they're just renovating the presentation of the scheme. Trying to dazzle those who haven't seen past the thin layer of bright paint to see the underlying decay.

If they want me to vote again its still NO!

slim pickins
28th-November-2008, 01:59 PM
oh dear... 17% fall today. we are at 18.5c a share. that means that the very very remote possibility of this vote passing is already factored into the price.

when it turns out to be a no watch the short sellers have a field day. it will sink like a lead weight.

why doesnt the 7.30 report do a story about it... must be political.... maybe they dont want to upset the shareholders, invesment funds. after all as a staunch capitalist i believe that companies should be abel to take advantage of the naive. its darwinism at its finest.

i dont need KPMG to tell me anything. they can tell me the the sky is green till they go blue in the face. btu when i look outside if the sky is blue.... its blue.

it really reminds me of september 11, when the first plane hit... they told the people to stay where they are. these are professional first response teams telling people to stay in a building that was just hit by a plane... and believe it or not.... some poeple actually stayed.

well the plane has just hit... KPMG can say whatever they want... i'm getting out.

its just amazing... it looks like you can pay an accounting company to say whatever you want. arthur anderson did that didnt they? whatever happed to them?

gorillapolice
28th-November-2008, 04:13 PM
why doesnt the 7.30 report do a story about it... must be political.... maybe they dont want to upset the shareholders, invesment funds. after all as a staunch capitalist i believe that companies should be abel to take advantage of the naive. its darwinism at its finest.

There is no story because there aren't enough investors collectively waving their hands up in the air, wanting to be seen and heard.

Sure, there are numerous small separate factions doing their own little thing and many have individually complained to ASIC.

But aside from David Mond and one or two others who have tried to collectively round up investors to the masses to send a resounding message to a) Great Southern and b) the public to get some air time to voice what's really been happening - there simply just aren't enough people collectively stamping their feet and raving and ranting to get the message out.

Many advisers don't want to, they'd rather sit back and communicate with their clients directly and advise them to vote no but stay out of what has become a real **** storm.

The share price is toppling - even on a "great" day for the market (given current conditions).

The problem with this entire situation is not the proposal put forth by Great Southern itself but rather the arrogance of corporate fat cats who fail to recognize that a majority of their investors were actually born with a brain and some common sense!

Even now I am bemused to understand how the likes of Cameron Rhodes, Steven Cole and Phil Butlin failed to swallow their own egos and arrogance at the Melbourne seminar and understand that those attending were not there to be informed on their "New Great Southern" but rather there seeking blood.

Investors be warned. If you want to throw away what was (and should have become) a smart investment has now become nothing and the management of Great Southern are to blame.

Taking that into account, before you vote, consider this: Great Southern, in their information seminars, are proposing "A New Great Southern". What will be so new about it? Same directors, same board. The only difference is you won't own your trees.

...and at the end of the day, even if Great Southern fall, your trees will still stay in the ground.

slim pickins
28th-November-2008, 05:05 PM
Investors be warned. If you want to throw away what was (and should have become) a smart investment has now become nothing and the management of Great Southern are to blame.

...and at the end of the day, even if Great Southern fall, your trees will still stay in the ground.

the trees are a fine investment... they are growing better then any blue chip share on the market right now. that is why they are the object of this corpoarte piracy.

it makes no difference if GTP fails or not. if they fail the management and sale of the trees will be taken over by the administrator. and later the management rights will be bought up my a more sensible forestry company.


now regarding the delay to the vote.. i wonder if there is a provision in the corporations law that invalidates the already cast votes in case of such a delay.... could that be trick they are relying on?

alternatively.... they will just try to delay until the share price goes up to one dollar wich would allow MIS investors to get their money back with nothing to show for it for the last 8 or so years.

unfortunately (for them).... the share price is only going one way.. and thats down.... i ask you with each day that passes, is their ability to repay an $800 million loan getting better or worse. i think the value of the whole company ... now only $60 million is the yearly interest they are liable for.

i ask you... how long can a company last, when its yearly interest expense is the equivelant of their whole net worth. we shall know very soon. i suspect they will just delay them selves into an early bankrupcy.

mind you.... if this thing passes... i can see their share jumping to about 35c and possibly delaying their bankrupcy by a year or so.

if there are any MIS investors that will vote yes... i beg you to present an argument as to why you are going to do so. just for a laugh :)

gorillapolice
28th-November-2008, 05:34 PM
now regarding the delay to the vote.. i wonder if there is a provision in the corporations law that invalidates the already cast votes in case of such a delay.... could that be trick they are relying on?

From what I have heard people who have already voted will not be required to re-vote. The adjournment is designed to sway those who have already voted to amend their no votes to yes votes (by providing them with 'new' information).

Needless to say, they're going to have to come up with something pretty mindblowing to get any investor who has already voted no to amend their vote given the $0.18 closing price of their shares today.

slim pickins
28th-November-2008, 06:09 PM
gorilla,

hehehehe yes i see.... it looks like nothing can extinguish hope. ah well... lets prolong the agony further. :)

Mad Cow
28th-November-2008, 09:10 PM
Howdy all. I have been reading your postings over the past few days, and it struck me that the postings are a bit one sided, as they mainly relate to plantations projects. So I thought I’d give you my input, as a cattle man, well at least I have 2006 and 2007 project droves, so that must qualify me as something, even if it is just plain stupid!

I have discussed the current situation for many an interesting hour with my spouse (“Cow Pat”) and my daughter (“Little Heifer”). We are left wondering where, or rather how will it all end!

The way I see it is as follows:

Firstly, all these so called “independent” reports around, are a laugh. None of them are truly independent. They are all prepared by people being paid by Great Southern or its subsidiaries, and they all have a vested interest in an outcome that suites the needs of Great Southern. For example, this is particularly true of the KPMG report. There fear is obviously if they stand up and tell Great Southern the truth, that their proposed project sucks from an investor viewpoint, Great Southern are hardly likely to go back to them for “independent” reports in the future. Hence, “he who pays the piper, calls the tune” has never been truer than in this instance.

Now, what really gets me with all of these reports is their asset evaluations, and the implication that all the investors have invested in the projects is the asset value of the cattle. The way I see things is that presumably all of the $5000 per drove up-front did not just pay for the cattle assets, but presumably paid for the setting up of the project. Hence, to value the investment KPMG etc should not just be valuing the beasts of the field, but the “project” as a whole, which is a fully operational cattle enterprise, which we paid to setup, not GSL.

What really got stuck in my hoof this year with the 2006 cattle project was that Great Southern only sold 40% of the available cattle they should have sold. Supposedly to wait to get bigger bucks for the other 60%, but this was at the risk of possibly getting even smaller bucks if the beef price went down further. I have my own theory (conspiracy) on this though. Call it far fetched if you dare, but I reckon if I were Great Southern trying to pull off their scam I would have held onto the 60% of the cattle from last year until after the vote, in the hope of pocketing that 60% of the cash for the cattle in the event of the YES vote. My conspiracy theory does not stop there though, cause then this has the benefit on making it look as the returns are down for the first year, of the 2006 cattle project expectation, and allows Great Southern to claim a bigger shortfall than there should have been, if there should have been a short fall at all. That way KPMG can play the “shortfall fear” Tarot card in their ”independent” report’. Nice one!!

It seems to me, even in the presence of the “apparent” poor returns made this year by Great Southern 2006 cattle project, it is still tracking pretty close to where it should be at this stage in the project. I did not get this information from any of the “independent” reports I looked at. Indeed, the KPMG report told me I should not event consider comparing how the investment was meeting the original expectation. Strange that!

If the "independent experts" think I want to take shares in exchange for my assets, at a greatly reduced asset value, have those shares fall dramatically in worth on the first day, be liable for 46.5% tax on the shares, and then loose all my money when the shares go to zero or I have to sell them at a price approaching zero to pay the tax, the “independent” experts must be “smoking dope”.

Yes, you can be sure I’ve sent my NO vote in. I hope this delay does not mean I am going to have to waste time sending in more NO votes just to ensure GTP get the message!

You would have thought that all of the independent advisors who sold us the bum steers in the first place would have been in the best position to band together to fight on the halve of the little guys (that’s me you know), but I don’t see that happening any time soon. My advisors in GTPs pocket, he’s to used to raking in his 10% of sales. My advisor has been conspicuous by his silence during recent events! Ah well … He may not do so well this year, that’s for sure. Is there some central organization to which advisors belong, who is doing anything on behalf of investors in all this turmoil?

Well, I had better go, as the above is probably going to be too big when I try and put it up for display on-line. Just one final thought though. I was thinking the other day over a beer, that because I have been giving Great Southern a hard time lately I would not put it past them, out of spite, tuning up in a cattle truck at my front door with my 228 steers, and telling me to look after them myself in my garden. Well, I have been thinking about this, and I reckon I could just fit them in, as I have a 650 square metre lot. Any body know if it is against the regulations to fit 228 cattle in a 650 square metre residential area? Of course, some of them are going to be looked after pretty well, as half the lot is taken by the house, so half of them are going to be in doors with Cow Pat, Little Heifer and myself!! But do you know, being very resourceful as I am, I have come up with the perfect scheme. Yep, I am going to start selling cow manure from home, yep, you heard me right, cow manure!! You know back in England, where I originate from, they always used to say about farmers, that there’s “money in muck”! Well, I think I can see know what they meant. Come to think of it, it kind of runs in the family, as Cow Pat’s uncle Harry used to keep pigs. But I think I will stick with the cows in the house!

Well I had better go. Keep up your good work spreading the word to vote NO on this issue.

PS: Oh, I almost forgot. Did anybody out there receive the mail out from Peter Gibbins recently under the banner of “Sentry Group”? Well, on investigating the privacy issues associated with this with Peter, I was actually dumbfounded to find out from Peter that he paid Great Southern to mail it out for him, and of course they agreed, as Peter is a strong supporter of the YES vote. I thought this was all a bit “covert” of Great Southern”, but Great Southern seemed to think it was all OK. What do you think?

Yes, I’m really gone now. Take care .. and stick together in the presence of adversity…

moooooooooo ...

Mad Cow

slim pickins
29th-November-2008, 02:42 AM
good post mad cow. :) i also think that when all this is over we need to move to change these independent advisors. i mean what a nasty bunch. and KPMG.... if we publicise this, any audit signed off by KPMG will be worthless.

i would never buy a comanies share whose books were cooked by KPMG...... they are clearly following the path of arhtur anderson.

Forenth
29th-November-2008, 08:18 AM
Good to hear from a cattle man, you're in the minority but still being told to swap for the same lame duck.

Shares ended up at $0.19. At $0.01 I might actually buy a few and see if they get to $0.02 for a profit.

I received some new GSL info in the mail, I hope that's not the 'updated' info cos' it was just the same rubbish as before. It just whined 'aww go on, pleeeeease? You can trust us.' At the same time I was guarding my wallet.

There must be something else coming surely. Anyone seen anything?

Mad Cow
29th-November-2008, 09:28 AM
Howdy again!

I was wondering how many Great SOuthern investors are out there looking at these postings. It seems to me, the big advantage GTP has is that they have the money and the communication mechanisms to promote their viewpoint, better than the "little guys" do. Well here's your chance!

Hence, I am interested in finding out how many little guys are out there, and which side of the fence they are standing on the YES/NO vote.

Now, I am the first person to respect privacy, but on an issues such as this I figure is is time to make a stand and be counted. Not that I'm a schollar, but someone I'm sure in history said "evil flourishes when good men do nothing", or words to that affect. We all know what the "evil" I am eluding to here is!

Anyway, if you have the same interest as me as to the numbers of viewers and their current thought process do the following. Note: I apologise in advance to those people who think the voting process is private, and that I shoudl not be asking them to vote. Well actually, the voting process below will be private, in the sense that noone other than me will be able to see how you vote, and I am not interested at an individual level how you vote, just what the overall vote outcome looks like at this stage.


If you want to have your say do the following, if you do not want to have a nice day anyway:

Send an email to:

[email protected]

with the subject line which ever is applicable to you as follows:


Your intend to vote YES:

Sugject Line:
I Intend to Vote YES to Great Southern's Proposed Restructuring Scheme - YES

Your intend to vote NO:

Sugject Line:
I Intend to Vote NO to Great Southern's Proposed Restructuring Scheme - NO

NOTE: Any emails received as part of the above message will not be replied to, and the email addresses will not be used for anything or given to anyone.


I will post the result of this poll on Monday 1st December if not sooner, depending on the level of response.


Have a nice day .....


mooooooooooooo...


Mad Cow

Mad Cow
29th-November-2008, 11:57 AM
Howdy all,

I thought I had better extend the voting options, to cater for anyone who is still sitting on the fence, so I have added Subject Lines below for those in this situation, i.e. who don't know or plan to abstain.

If you want to have your say do the following, if you do not want to have a nice day anyway:

Send an email to:

[email protected]

with the subject line which ever is applicable to you as follows:


You intend to vote YES:

Subject Line:
I Intend to Vote YES to Great Southern's Proposed Restructuring Scheme - YES

You intend to vote NO:

Subject Line:
I Intend to Vote NO to Great Southern's Proposed Restructuring Scheme - NO

You intend to vote ABSTAIN:

Subject Line:
I Intend to Vote ABSTAIN to Great Southern's Proposed Restructuring Scheme - ABSTAIN

You are UNDECIDED:

Subject Line:
I HAVE NOT DECIDED HOW TO VOTE re the Great Southern's Proposed Restructuring Scheme - UNDECIDED

NOTE: Any emails received as part of the above message will not be replied to, and the email addresses will not be used for anything or given to anyone.


I will post the result of this poll on Monday 1st December if not sooner, depending on the level of response.


Have a nice day .....


mooooooooooooo...


Mad Cow

irenebrisbane
29th-November-2008, 12:16 PM
With all due respect, Mad Cow, I don't know who you are; for all I know you could be collecting information on behalf of GSL. I am a suspicious person; been around the traps long enough to not be wary. Will be interested to see how many voters respond to your post. It is all probably in good faith, but I'll give it a miss this time.

slim pickins
29th-November-2008, 01:37 PM
irene i would not be too worried about anyone collecting information. GTP will have all the names and addresses and which way each person voted anyway.

the names of people voting yes to this could only be useful to those selling some dodgy nigerian scam in the future... to a scam artist such information certainly shows a persons naivety and suceptability to be tricked out of money.

i bet i could milk at least 10k out of anyone willing to vote yes to this proposal.

drsmith
29th-November-2008, 01:43 PM
With some forums an anonymous poll can be initiated as part of a new topic but I don't think this can be done here.

drsmith
30th-November-2008, 10:24 PM
I take that back. It can.

The option of a poll is under additional options when starting a new topic.

Aussiejeff
1st-December-2008, 09:32 AM
Company announcements this morning

http://www.asx.com.au/asxpdf/20081201/pdf/31dylztrc7fvf0.pdf

The thing that sticks out like cattles balls to me is the net loss from operations after tax before goodwill impairment of $33.8m - among other things, of course.

This will not bode well for them on the market today.

Most importantly - NO FINAL DIVIDEND on the back of an already paltry 3c interim!!

Cripes. 3c for the year is not going to go down well. Especially with the company going concern statement essentially saying if (a) the Transform program doesn't proceed, they may fold and (b) if market prices for GSL products fall during the coming year, they may fold.

What a bleak outlook....

My Bro-In-Law is going to throw up this morning when he sees his "regular guaranteed dividend cheque" has just vanished in a puff of smoke...

brty
1st-December-2008, 11:03 AM
The other "or", is of equal importance....

"or should the 2009 MIS sales result be low.."

Given that they are trying to pick up other projects at a loss to investors, then why would anyone be crazy enough to buy one of the 2009 timber schemes???

As importantly, could any financial planner/adviser honestly recommend one of the 2009 schemes to their clients ???

Also something I mentioned earlier in the thread about the asset valuation, the rehabilitation cost of the land is stated as $795/ha in the notes to the accounts. When I read that I thought of the line of Darryl Kerrigan in The Castle, " 'tel 'em their dreaming".

brty

Forenth
1st-December-2008, 11:19 AM
They've also sold some land in Qsld for $23 million.

From the voting figures published so far the % of yes votes required from the still outstanding votes to get 75% of woodlots/cattle lots are:

1998 : 113.0 %, so already a confirmed no overall.
1999 : 104.2 %, so already a confirmed no overall.
2000 : 92.6 %
2001 : 94.4 %
2002 : 89.8 %
2003 : 86.8 %

2006 cattle : 79.6 %
2007 cattle : 78.7 %

If I got these wrong please say so.

They say the 1998, 1999 and 2000 projects look like being a no, while the others are quite possible, with the cattle projects being likely. The cattle are a possibility but surely all the forestry projects aren't looking likely.

They changed their opinion on the 1998 project to vote depending on your circumstances, but still somehow claim the rest are a good deal??? They also claim with the VWAP being lower than KPMG used in their appraisal this is now an even better deal due to lower tax payable?? What a STUPID, ARROGANT statement.

Latest price is still $0.19, I want to see KPMG buy them and find how they like it! My after-tax break even price is $0.755 as I have to pay tax not just now but again when they're sold, assuming they EVER go up. That's 360 % of the share value today and that's not my risk to take. I own trees due for harvest soon. GSL can rack off.

gorillapolice
1st-December-2008, 11:36 AM
In addition to the absence of the final dividend, what's more alarming is the following:



We are encouraged that the majority of individual investors in 5 of the 8 projects support our proposals and we are particularly delighted by the strong yes vote that has been cast for the two cattle projects which are both close to the 75% by value target.

So from this it sounds like Cattle will get up.

He goes on to say that in the absence of a material change to numbers between now and the adjourned meeting dates, the 1998, 1999 and 2000 Project proposals appear unlikely to be approved, then saying "This is probably not surprising as these projects are nearing completion" (Gee, ya think???)

What I find most alarming here is the fact that it seems that there seems to be a significant number of investors who have 'neglected to vote' - so it seems, anyway.

Guff
1st-December-2008, 11:52 AM
Another note, GSL may sell their loan book for 50 to 70% of book value.

This really shows they are desperate for cash!

Is there any way of stopping the sale of the loan book?? If/when GSL go down, investors would then have to pay someone else for the loans.

Sales of assets are likely to be continued to be sold at significant discounts to book value (eg the 23million sale at 11% discount). All of these thingsadd up to a grab for cash to fund month to month cash flow needs.

bv2726
1st-December-2008, 01:43 PM
How is this for a theory - and some wishful thinking.

I have some cattle. I have voted no, and wont let GTP take my cattle away from me. But it appears (from their figures today) that they may be able to get some cattle off people.

So, if GTP suddenly own whole heap of cattle...do you think they may "try harder" and get a better price for their cattle? (and me!...cause I am a "partner")

Well, its nice to dream...

I just cant understand it. GTP keep saying "oh its bad, the cattle, the drought, the prices etc" but they want it. So they obviously may get good money for it...

Hoping...

lcl999
1st-December-2008, 04:33 PM
GTP have some massive debts, some in the form of convertible notes. See GTPGA and GTPGB.

If GTP still exists when they convert, the notes holders will end up with over 70% of the company. However as the notes are way under water, it would seem that the market is placing a rather low percentage chance of GTP surviving.

LCL

ardstar
1st-December-2008, 05:50 PM
Hi guys,

I have stumbled across this forum, and I myself recently invested in 2 woodlots as part of Great Southern's HVT scheme in FY2007-2008. After reading these latests posts I am now quite worried about my investment, as it is the first time I have ever invested in anything 'major'.

Is this change to GTP going to affect all investors, or investors of projects that are near maturity? Also if Great Southern were to go down, does that mean my woodlots are gone?

Sorry if these are stupid questions, but if there is anything I can do as a small time investor then I would be happy to help out, as by looking at that SMH article, Great Southern are really looking to rip us off.

Cheers,
Ardi

Mad Cow
1st-December-2008, 07:33 PM
Howdy all,

Just thought I would let you all know how I got on with the forum poll, whereby I asked people to respond to HaveYourSayOn_GTP_Offer@hotmail.com with YES/NO/ABSTAIN/DONT KNOW with respect to the planned Great Southern restructuring.

Of course, as you would expect, Great Southern beat me to it today, by publishing their proxy votes before I got my vote count in. I guess we must have had them worried we would pip them to the post with the poll results!

To tell the truth, my results were a bit disappointing, to say the least. I had been hoping to see one or two hundred votes cast through the forum, but I guess I overestimated the number of visitors such forums have. Either that or people had visited, but chose not to vote, which is their choice.

Well here is the count and voter preferences I received:

Total Votes cast = 4, as follows:

Vote 1: NO
Vote 2: NO (1998 forestry, where voter indicated he had also info on 60+ other people in the project where they were overwhelmingly voting NO)
Vote 3: NO (2000 plantation scheme, 6 wood lots)
Vote 4: NO (2007 cattle project)


Total: 4 x "NO" votes out of 4 votes cast, i.e. a 100% NO vote (well thats more like it) but I'm afraid it is not statistically significant!

Many thanks to those who voted.

mooooooooooooo ...

Mad Cow

tally-ho
1st-December-2008, 07:53 PM
I'm a 2006 cattle investor and I'm not sure whether cattle owners realise how much their loss will be if they accept the proposal.

I invested in 15 droves, that's 60 pregnant cattle at $75000 +GST. I received a first announcement about the proposal in a letter giving me a value of my investment to shares (at 1.10 share price) of $244200. That sounded really good. The second letter said sorry that was an error of calculation, but your investment is worth $61050 in shares (at 1.10 share price).

At the meeting I still had the impression that the value of my investment would be $61050 with an accordingly higher amount of shares issued due to the recalculation done in view of the fall of the shares. It wasn't until later when I sifted through the 200 pages explanatory memorandum that I noticed that we would get a fixed amount of shares of only 5910 per drove. In my figures that calculates to a value of $16843.50 calculated at the current share price of $0.19.

It comes to mind that many cattle investors would assume they would receive the Dollar Amount they had received in a letter and might vote yes so they have been deceived.

I was enquiring about cattle prices and even for the slaughterhouse, an adult cow would at least bring in $660 ([email protected]). That's $39600 in this example, a much better offer than $16843, so KPMG cannot say that it is the best option.

But then I learned another deception. I received the statement of my cow stock today and it's only 54 cows. I called GSL and learned that the initial 60 cows for which I paid $75000 are owned by GSL and only leased by the investor. Are other cattle investors aware of this? I don't have the original prospectus anymore, but the short version is very deceiving, it even states

"A stocking guarantee confirms that investors' droves will comprise at least 4 breeding cows after the first muster of the Project herd during the 2007 calendar year" <that would be 60 cows in my example>

Also speaking to a female staff member at the Perth investor meeting, I was threatened that if we don't accept their offer there would be administration fees to pay next years to come.

I think if the cattle investors have voted yes, it was because of the deception of the letters and the threat of ongoing costs.

Cattle owners have lost at least 80% of their investment within 2 years!

And they have invested $5000 for 4 unborn calves, which are calculated in the trading stock at $20 each (after they're born). So we got $80 worth of goods for our investment.

Cheers to Great Southern, the Great Con Artists!

Hope to hear more from other cattle project owners in this forum.

Mad Cow
1st-December-2008, 08:10 PM
The 2006/2007 cattle project PDS states what I have shown below. I don’t think this is saying they are owned by GSL, because as far as I know they do not own the cattle. I think it means GSMAL purchases or leases cattle for the project, and that all of the project investors have their share in these cattle, not GSL.

“Leased Cattle

Great Southern Cattle Managers PTY LTD (GSCMPL) a wholly owned subsidiary of GSMAL, will purchase or lease Breeding Cows for use in the Projects and the bulls required for joining.” (Page 20 in PDS)

Forenth
1st-December-2008, 10:14 PM
Dear Tally-ho,

What GSL wants to do to you sounds worse than the forestry scams. Go to ASIC and lodge a complaint. If you look back through my posts I have posted the details of how to do it online, page 59 or 60 on here. I 've complained twice and I heard somewhere tehy've had over 800 complaints now.

Tell them all you've posted and everything else you can find. Sounds like an immense ripoff to me...

tally-ho
1st-December-2008, 11:30 PM
Dear Tally-ho,

What GSL wants to do to you sounds worse than the forestry scams. Go to ASIC and lodge a complaint. If you look back through my posts I have posted the details of how to do it online, page 59 or 60 on here. I 've complained twice and I heard somewhere tehy've had over 800 complaints now.

Tell them all you've posted and everything else you can find. Sounds like an immense ripoff to me...

I have indeed lodged a complaint to ASIC online today. Your earlier info was helpful. I really think the problem is that cattle investors don't realise how much they will be losing.

I'm glad I found this forum, I think we have some power if we can create a big enough group and now we have some extra time. But how are other investors finding this group or info because they will be looking for keywords like "GSL Share offer" not the ASX code GTP.

gorillapolice
2nd-December-2008, 10:23 AM
Also if Great Southern were to go down, does that mean my woodlots are gone?

No. No matter what happens to GSL, your trees will stay in the ground.
If GSL go down, somebody else should come in to manage the investments in their place.

irenebrisbane
2nd-December-2008, 05:49 PM
Gorilla Police, tell me something happy: if GSL go down won't other creditors - e.g. banks, finance companies etc, have first claim on our woodlots and we get whatever is left over? That's not right is it?! Please?

Forenth
2nd-December-2008, 09:36 PM
Hi Irene,

My take on this is that we own the wood, GSL owns the land. We have a lease and management agreement with GSL to lease the land and for GSL to manage our trees.

If GSL go down then they're still our trees but the land would end up belonging to someone else. Any receivers etc would prolly find it in their interest to let the trees go to harvest if it wasn't too far away. I dunno what would happen if it was a recent planting.

Forenth
3rd-December-2008, 09:19 AM
BTW,

On their website GSL have published more detailed results of voting so far. It gives the woodlots for and against and the constitution voting as well so I can update my previous post.

In the case of getting 75% of woodlots/cattle lots as a yes, GSL need the following % of yes votes from the votes still outstanding:

1998: 142.2 %, so already a confirmed no overall.
1999: 112.0 %, so already a confirmed no overall.
2000: 104.9 %, so already a confirmed no overall.
2001: 91.5 %
2002: 89.7 %
2003: 90.4 %

2006 cattle: 81.8 %
2007 cattle: 79.4 %

People who have already voted would have to change their minds for the 1998, 1999 and 2000 projects to be a yes. Not likely (woohoo!)

The 2001-2003 projects would also appear to be more likely safe than not, votes for these have been going about 50/50.

The cattle projects are still at risk but if votes go as they have been then they will also be a no. GSL will miss out by 5-8 %.

GSL are jumping the gun by saying they'll be issuing however many millions of shares. At this rate they won't issue any other than those who for some reason have made individual acceptances.

Close yesterday was 0.175. My after-tax break even price has increased to $0.77. That's 440 % of the share value today and that's still not my risk to take. I still own trees due for harvest soon. GSL can still rack off. I am unable to understand how KPMG came up with their break even prices... their numbers don't work for me. Anyone who hasn't voted should consider the implications to themselves and their circumstances, and get advice if they need it.

gorillapolice
3rd-December-2008, 09:57 AM
Gorilla Police, tell me something happy: if GSL go down won't other creditors - e.g. banks, finance companies etc, have first claim on our woodlots and we get whatever is left over? That's not right is it?! Please?

Irene, good news is scarce at the moment but i'll do my best.

There is a restrictive covenant on the land which means that the trees belong to the grower until such time as they are harvested in accordance with the lease and management agreement.

This is the case where the land is owned by GSL or leased to them. In a nut shell, the trees and harvest proceeds are ours. Unless we choose to be infected by mad cows disease and we give them away to GS for worthless shares…

wooduk
3rd-December-2008, 10:21 PM
I have been watching comments from everybody on GSP.Ihave woodlots in the 2003 and Ihave voted NO to this proposal.Iwould like comments onthefollowing andanything else that CONNECTS THE DOTS

1.does not your deed certificate state that gsmal manage the trees?
the certificate states an ARSN number and this number precludes you as the owner of the land remembering that gsmal is appointed by asic after they (gsmal)paid $5,000,000 for entering into the 2003 project as the proper entity
not great southern?great Southern leased the land,confused? yes I am and it is a worry fromastandpoint why other individual investors are not asking questions,who cares if they are mistaken queries getoff your butts and fight for what you invested in the long term for yourself andthe future longterm:confused:

2.Was not gsmal supposed to be independant at the Melbourne fiasco---I mean casino and I believe that it was stated that they did not need to have this road show

brty
3rd-December-2008, 11:52 PM
Hi,

Just playing devils advocate here, but a couple of points that may be relevant.

If the buy back scheme fails, and that looks likely, then GSL is likely to fold (companies own admission).Should the land be sold off by an administrator, Does this mean that the trees on the properties must still be removed by set dates?? Does it mean that individual growers (or as a collective) will have to negotiate new contracts with different entities to manage and harvest their trees??

brty

doctorj
4th-December-2008, 12:11 AM
If the buy back scheme fails, and that looks likely, then GSL is likely to fold (companies own admission).Should the land be sold off by an administrator, Does this mean that the trees on the properties must still be removed by set dates?? Does it mean that individual growers (or as a collective) will have to negotiate new contracts with different entities to manage and harvest their trees??
My understanding is as follows:

Each scheme is a seperate entity that exists in its own right from Great Southern. The schemes then appoint Great Southern Managers Australia Ltd (a wholly owned subsidiary of the Great Southern Limited) to manage and run the scheme.

Any changes to the length of the scheme are governed by the constitution and compliance plan for each scheme.

It isn't uncommon for a scheme to change its manager. I believe GSMAL currently manages a number of schemes that were started by other companies (through either takeover or failure of the company). Environvest comes to mind as an example.

Each scheme's board is responsible for ensuring GSMAL provide adequate services on an arms length basis on behalf of the scheme's members. Oversight on this matter is conducted by the compliance committee which always includes experts independant from GSL and its subsidiaries. Periodically they will engage outside experts to visit each site to prepare a report on the quality of management of the (for example) plantation.

If GSL folds, it shouldn't be too hard to get somebody else to manage it. Each scheme, by virtue of the terms discribed in the PDS, grants some manner of revenue stream to the manager and therefore the scheme itself is valuable.

In short, the scheme exists in its own right and it survives any changers of scheme manager.

brty
5th-December-2008, 12:57 AM
Hi DrJ,


If GSL folds, it shouldn't be too hard to get somebody else to manage it.

who organises it?? who negotiates on behalf of the growers?? to get 'a good deal??'

brty

doctorj
5th-December-2008, 04:10 AM
who organises it?? who negotiates on behalf of the growers?? to get 'a good deal??'
The scheme's board (note this isn't the GSL board). It is the duty of the Compliance Committee to confirm that the scheme's board acts in the best interest of GROWERS rather than GSL shareholders. To help ensure this, two thirds of the compliance committee are external to GSL (they tend to be things like prominent Lawyers with experience in Agribusiness).

Essentially what will happen is if GSL folds, someone else will take over the management of it and run it completely per the original PDS given to growers. Then all you need to worry about is whether or not the new manager has the sufficient skills to run it effectively - the compliance committee ensures this as well.

Final oversight is provided by the auditors who will review all scheme and compliance committee decisions (and the evidence for those decisions) every 6 months or so. After all that, if you still feel you're getting the rough end of the pineapple, you can go to FICS who are an external dispute resolution body. FICS is free and acts as an independant adjudicator.

brty
5th-December-2008, 08:52 AM
Thanks for the explanations DoctorJ.

Does the compliance committee have separate money from GSL, or is it paid from GSL funding to undertake its functions??


someone else will take over the management of it and run it completely per the original PDS given to growers.

Why?? If, as a business proposition, I was asked to just take over the existing, I may argue that I want variations to what was offered 6-7 years ago as market conditions have changed. To think that the same arrangements are acceptable for a different body, who is under no obligation to take up the contract, is relying on a fair bit of hope.

I think there are many unknowns in all of this, including the possibility that scheme holders will have to fork out extra money to make things happen (bring schemes to a conclusion) should GSL fold. If the compliance committee had no funding source, (funds tied up in GSL and frozen by administrators), then it too could fold. If anyone knows, please post.

brty

jiml
5th-December-2008, 11:18 AM
With the share price now at 14c and dropping between 1 and 2 cents a day, it seems unlikely GRT can survive as stand alone identity. Further, at the current, yet alone projected share price, scheme investors - plantation or cattle - to vote 'yes' would be to effectively write of their assets. In my estimation, GTP is stuffed inasmuch without 'transformation', debt is unsustainable without cash inflow via new investors which currently seems unlikely. Hm

Teddy Bear
5th-December-2008, 11:19 AM
[QUOTE=tally-ho;367930]I'm a 2006 cattle investor and I'm not sure whether cattle owners realise how much their loss will be if they accept the proposal.

I to have invested in the 2006 cattle project and for various reasons haven't voted yet with the main one being that I phoned Great Southern when this all started and asked what would happen if I didn't go with this and they said that once the project was wrapped up we would automatically be turned into shares. This seemed like a forgone conclusion to the scheme and I did nothing being horrified with every further letter that I received as were you. I do however have my voting form here which I would have voted for and am glad to have read your posting and will now vote against. This is a rip off and I stand to be 25,000.00 to the wind - worst investment I ever made. Can you advise how I complain to ASIC Pls.

jiml
5th-December-2008, 11:35 AM
Ted E Bare
My advice is they can't convert your cattle investment into shares without your consent. Whether the majority votes yea or nay is not binding upon individual investors. However, I suggest you seek advice to confirm this view.

gorillapolice
5th-December-2008, 04:53 PM
While i'm sure everybody has noticed but hasn't bothered to post it - the current share price is a whopping $0.14.

That would mean that in order for these shares merely to equal what Great Southern are offering them to you at ($0.50) the share price would need to increase by some 250% roughly.

Oh, and that’s in current market conditions where we’ve got blue chip stocks like Rio Tinto who have plummeted by some 75% or thereabouts (no calculator in front of me, and for the life of me it hurts to calculate at the moment so I’ll go by rough figures).

To make things worse, this doesn’t indicate the smack in the face you’re going to get from Arnold Taxinator when you swap your investments for shares and realise a Capital Gain, therefore getting hit by tax – but hang on, if I remember correctly, wasn’t one of the big reasons of investing in projects such as those in question for tax effective reasons (if not the reason)?

Talk about pushing the proverbial up hill. In fact, talk about delaying the inevitable – putting this vote off an extra two months while the share price plummets even further is only going to deter people even more from voting and/or voting ‘Yes’.

So, to all 'Yes' voters out there - now's your chance to steer your ship clear from the iceberg that is 'Project Transform'.

cathadfab
5th-December-2008, 08:26 PM
My head is now hurting after about 24 hours of reading this forum and researching information online.

I invested in 2006 cattle and also 2007 trees (which for some reason seem to be safe - who knows why at this stage?).

The reason i started this research so late in the day was yesterday i received a letter from a solicitor in Sydney Dennis & Co outlining a group action they wish to commence on my behalf if I wish to pay them a nominal fee. It seems to that there have been several letters others have received that haven't made it to my letterbox.

Prior to this I had thought, that as so many have you have stated, that the people with massive investments would be seriously looking into the yes and no vote situation and that the chances were the vote would go the way that would be best for me. Lazy yes? lack of funds and time to get my own advice was the problem though.

My initial understanding of the offer was that GSL had taken into account that I had already received a tax benefit by joining the project and when i did my sums it became quite clear that what they were offering me was pretty close to my out of pocket expenses after receiving my tax relief in 2006 less a few dollars. (not including the interest on my loan)

I also am pretty certain that my financial planning representative was an employee of Great Southern and strangely I have not heard from him during this time to give me advice on what I should do. My accountant at the time put me in contact with him to finalise the deal. Is he not talking to me because he now has a conflict of interest? does anyone else have this problem?

Has anyone else been contacted by Dennis & Co? Does anyone else know what the results of a group action could potentially be?

Being a small time farmer too, i wonder at the comment about the company holding back 60% of it's stock because the prices were low. We know in our business that you take the high prices when you can get them, but if you don't shift stock then it's not worth zip in a year's time. Not sure about beef and how it sells when it is 6 months to a year older, but for us we lose if we don't move our stock and produce even if the price is short. Would 40% at a good price, and 60% at a lesser price made a reasonable profit for the first or second year?

There are also other markets that may be interested in cheap beef that can't normally afford it. In Tonga turkey tails (yep...the turkey parson's nose) sell for incredible prices. Surely the opportunity could have been there to seek out other markets that may not normally be in the spectrum.

With all that, for the guy that wants to put all his cows in his backyard, i have heard that you need approx 1 acre per 8 cows. You might be a bit squeezed for space. You might also have to worry about carbon emissions, but i'd love to come over and watch the backyard activity.

And this just sprang into my head...I recall being told before purchasing into the cattle project that the most likely outcome would be a return of around 27% on my investment. Was anyone else given such glowing reports on return?

Lastly, i couldn't find the info on how to complain to asic anywhere. I blame my square eyes after reading all day. Can someone please repost and tell me what exactly i should complain about...or how to do it?

I apologise now for this obviously being from someone who knows nothing much to add value...Great Southern Cattle '06 was meant to be a nice little earner for me as part of my retirement plan. Now it seems like my retirement will be spent trying to navigate my way around a lot of cattle dung to even get my investment back in whole, let alone try and make a few bob to keep up with inflation.

Forenth
5th-December-2008, 10:24 PM
How to lodge a complaint with ASIC.

Go to www.asic.gov.au and click on 'contact us' for phone numbers etc. If you want to lodge a complaint online:

Go to www.asic.gov.au, top right of the page and 'how to complain'. Next page go down to Question 6 'make a formal complaint'. Company details when you're asked are:

GREAT SOUTHERN LIMITED
Company # 052046536
16 Parliament Place
6005
Australia (obviously)
Ph 08 93209700
Fax 08 93219288

Stick to the facts and figures, not too much emotion, and urge them to investigate.

I asked them to also at the very least force GSL to postpone the vote until those who are confused can have time to clear their mind and make an truely informed decision. Maybe this postponement is my fault! I think GSL's announcement said one reason was ASIC instructed them to.

Lodge complaints, the more the better!

Grumpy Old Man
5th-December-2008, 10:52 PM
Cadthab:

there is some discussion regarding the letter from Dennis and Co on the Hotcopper Blog.

In regards to your trees, your rights are explained perfectly in the DoctorJ posts above.

There is an international market price for woodchip. The market value of the trees to investors will depend upon the market price of the day and required costs of harvesting, transport and port facilities.

If you have a few hectares, highly recommend contacting a Registered Professional Forester (RPF) via the Institute of Foresters of Australia. They should be able to give you a feel for current market value of a 'generic' hectare of trees - and if you want to spend a bit more money, a forestry consultant can actually measure your individual woodlot and tell you what the market value of your trees would be - including any potential customers operating in the area of your investment.

Failing that, Forestry SA and CALM (WA) have some good generic information regarding the value of plantation blue gum in the Green Triangle and WA. Also have staff that may be able to assist you.

Good Luck

GOM

doctorj
5th-December-2008, 10:56 PM
If you have a few hectares, highly recommend contacting a Registered Professional Forester (RPF) via the Institute of Foresters of Australia. They should be able to give you a feel for current market value of a 'generic' hectare of trees - and if you want to spend a bit more money, a forestry consultant can actually measure your individual woodlot and tell you what the market value of your trees would be - including
If I recall correctly, you're also well within your rights to mosey on down to your woodlot with a chainsaw and chop down your own trees at any time and then do with them whatever strikes your fancy.

wooduk
6th-December-2008, 01:36 AM
Ihope investors are not totally depressed gtp bounced back to 15 cents,I am sure that something is legally cooking because it is very still ,todayS&premoved gtp from the asx 200. That is a signature that would have share holders depressed and well and trulely ticked off.That is good for MISinvestors as it confirms to the NO votes and the subsequent postings that have been on ASFthat you are right about the price that the tree swapping for shares is a disaster.

If there is any court action on behalf of MISinvestors please let us know and what action it is ,meaning willit be liquidation damages and winding it up in each tree and cattle project or damages over alleged misrepresentationor flick the directors and the management .
letus know

Forenth
9th-December-2008, 01:35 PM
Anybody seen the 'updated' information from GSL yet?

This is purely hypothetical, but apparently under corporations law investors can change who is the responsible entity for a managed investment with a majority vote, much the same as GSL's vote. That would mean that if investors were in agreement then someone else, maybe Timbercorp or Gunns (hypothetical remember!) could be approached to see if they want to take over the MIS projects on the same terms as GSL agreed to. GSL would still own the land and the lease for the MIS projects would still be there, but someone else would manage, harvest etc. This would protect the projects from GSL.

Any lawyers out there?

irenebrisbane
9th-December-2008, 04:03 PM
Forenth, I haven't seen or heard anything from GSL since the seminar on the Gold Coast last month. They've "gone to ground" as they say. Probably trying to cook up another method of getting our investments.

slim pickins
10th-December-2008, 11:04 AM
hmmmm what can GTP say.... they have said everything already. of course they are concocting more tricks to compliment their scam.

i mean they have said that the majority of the votes will compel the other investors to accept the deal.... apart from this being wrong and without legal basis, (as the investors rights arise out of contract law and not corporations law)...... they have not said anything about what constitutes a majority of the vote. hence,

the tricks they have uo their sleeve are the probably the following:

1) the delay of course is trick no1, giving the shares time to recover .. which they wont. i mean they could hit 19c and what then... back to 13c and lower.
but of course the shares will bounce a few % as the company has sucessfully tricked some naive people out fo their assets.

2) the other trick wll be to argue that once the vote is a no, GTP will argue the majority will consist of the project investors at the time of the issue fo the project. and thourght this war of attrition they will slowly keep taking people trees over several years until a majority has indeed succomebed to their rip-of through various reasons.... for example there will always be someone despearte enought to need immediate cash. they will convert it to shares and take 10% of their investment if the need is that great.

other investors will die and others will get divorced... eventaully the company will take the majority of the trees in this game of attrition and those that are steadfast, the company will just ignore them.... after all GTP wont care about the 30% who will not give their trees up under any circumstances. they wont risk legal action.

GTP will remain liquid while it continues to take the trees away from people. once the trees are all eaten up by this monster the company will fold.

this could keep gtp alive for a couple fo years potentially. just enough for the direcotrs to pay themselves enough money and retire in comfort because everyone knows they will never get another job.

anyone buying these shares or sellign their trees to nothing is just contributing to the GTP directors' retirement fund.

i would love to see how many people will become GTP investors this year :) even if GTP gets 100 milion worth of trees for nothing... it will be a phyrric victory them.

gorillapolice
10th-December-2008, 02:59 PM
Forenth, I haven't seen or heard anything from GSL since the seminar on the Gold Coast last month. They've "gone to ground" as they say. Probably trying to cook up another method of getting our investments.

Perhaps they'll try a Nigerian 419 email scam - that might trick a few investors?

I shouldn't be giving them ideas... ;)

Guff
10th-December-2008, 04:59 PM
It really does look like GSL is toast. The next couple months may see their debt levels rise even further and assets sold off -- they have started to sell land already to lease back to access some of the equity to pay bills and "reduce debt".

GSL will do everything it can to to delay liquidation (it looks like that's where they are headed), even sell its loan book for 50% if it must -- they even said that in their going concern statement. If one or more of the project-equity swaps get off the ground that will buy them more time.

The only concern I'd have now as an MIS investor is whether (and I'm not saying they have actually done this -- but Palandri Management DID!!) they have double sold woodlots, or not correctly carried out their management obligations in actually planting trees. Lets hope not. Again that is not a suggestion or accusation -- I'm sure GSL hasn't done anything of the sort.

doctorj
10th-December-2008, 09:37 PM
The one concern that struck me this morning is that what if GSL board/management have a significant interest in the schemes? Could other investors be railroaded into accepting the offer of shares if GSL mgt have a sufficiently large holding to swing the vote?

brty
10th-December-2008, 11:58 PM
Hi,

Just sighted this ad in properties for sale from Timbercorp, who are in similar trouble to GSL. (ie high debt no/little cash).

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=7234703&f=0&p=30&t=rur&ty=&fmt=&header=&cc=&c=190783&s=vic&snf=rbs&tm=1228912579

They are trying to flog assets as well. At $171 per acre per annum for the lease plus cpi, then the yield on degraded land is only 3.42% assuming the ~$5000/acre valuation they have on their books.

The competition by these companies in selling this land with long term leases can only push the price down as they get more desperate.

brty

tally-ho
11th-December-2008, 02:17 PM
Re: 2006 Cattle

Investors have recently received their trading account. It shows an opening of only 2.2 cattle per drove instead of the promised 4 breeding cows.

I found a 4 page Project Summary that was handed out when I bought the investment and on page 3 under Project Features it states:


"A stocking guarantee confirms that investors' droves will comprise at least 4 breeding cows after the first muster of the project herd during the 2007 calendar year."

They seem to have made a guarantee they did not deliver on. I wrote to the company and to ASIC again. Anyone else who followed up on this or looked into it?

Anyone has asked about what the mix/age of their cattle is?

The average market price may be about $600 per adult meat cattle, Fresian heffers joined to beef bulls are selling for export to China & Saudi for $1850+gst I have been told.

Has anyone approached the company or succeeded in taking their cattle out, I'd be interested as I have a friend with 68 acres of lush green cattle fenced property who could agist them for me. If anyone has some feedback in this regard, I would welcome a private email to

[email protected]

Forenth
12th-December-2008, 10:33 AM
Has anyone else been contacted by Dennis & Co? Does anyone else know what the results of a group action could potentially be?

I have also received a letter from Dennis & Co yesterday. It was very nicely worded and said it would only cost $825 per project if I wanted to join in their claim against GSL. Plus additional costs if any money was recovered but they would be seeking legal costs as well.

I thought we just wanted to halt the vote, but these guys are seeking damages for the poor performance of the projects, accusing GSL of misleading investors. From my prospectus the projects are at the bottom of the projections, which annoys me to a huge extent, but are performing within the limits. Yes, GSL got it wrong but to try and prove it was deliberately misleading won't be easy.

My project, 2000, is pretty certain to be a no vote and $825 / project seems a bit steep especially as I have relatively few woodlots. I can't help but wonder if these guys are just trying to cash in. After all, they can't promise anything will come of it, which is just what GSL said about their share price in the meetings.

Anyone else getting mail from Dennis & Co?

prawn_86
12th-December-2008, 10:38 AM
Hey guys,

I haven't follwed this thread much, but if you are looking to take legal action, a company called IMF do class actions on a 'no win, no pay' basis if you want to look into that.

Also if you can get > than 5% (or maybe its 10% im not sure now) of voters to agree, then you can call an EGM.

Hope that helps a bit.

Prawn

cathadfab
12th-December-2008, 11:11 AM
[QUOTE=Forenth;371750] From my prospectus the projects are at the bottom of the projections, which annoys me to a huge extent, but are performing within the limits.

It's interesting when you look at the performance indicator chart within the 2006_Beef_Cattle_Investment_update available on the Great Southern website. It shows the three preojection levels for when the cattle were being sold and overlaid are the KPMG forecasts. I question why when the KPMG forecasts are still within the three initial forecasts are they now being used to show that the project is not a good investment.

Surely if the initial baseline wasn't a good investment when we were buying our cows, and there was every chance at that time that the project could stick to its baseline predictions, then why did they pursue the project at all.

it really concerns me that the new KPMG information, which is within this range, is being used to convince us that we should sell our investment for shares.

If KPMG are better equipped to predict the future than the company they used at the outset of the project, then why didn't they use them in the first place?

I also took a long time to read the section about how our cow money was divvied up this year too. They state that most of the 60% of the cattle that were held over have been sold since June 08 which makes me think that this year we should have that 60% plus another 100% of cattle to go on the books this year which could mean we stand to make a higher than expected yield. If our low return this year was based on 40% sales, then shouldn't we get a much higher return based on 160% sales?

As an added sweetener - if you decide to take shares instead of holding onto your cows then the company will waive the carry over fees which appear to be quite hefty! Seems we'll be penalised whichever way we decide to go.

Its like being back at school dealing with a bunch of influential bullies, determined to push people around until they get what they want.

Grumpy Old Man
12th-December-2008, 02:27 PM
If you really want to punish GTP, invest with someone else..:)

A competitor (Rewards Group http://www.rewardsgroup.com.au) is selling high value timber product. They may be the only company in Australia already exporting MIS teak? - but I could be wrong on this?

On the blue gum investment side, Macquarie Bank sell a product that may also be worth looking into - appears that for a price similar to GTP, you get the land plus trees - offtake agreements already in place with Australian Paper (rely on reflex!) for earlier products and Midway Ltd in Geelong and Portland who sell to Nippon Paper.

Anyway, have fun - and make your own mind up...:)