ANZ Says It Won’t Fund Gunns Mill

Submitted by Sharemarket News on 3 June, 2011 - 11:09

Another possible funding source has bowed out as ANZ Bank (ASX:ANZ) reconfirmed its decision not to give financing for the $2.5 billion pulp mill that Gunns (ASX:GNS) plans to build at Bell Bay.

"There has been no change in our position since May 2008," said an ANZ spokesman yesterday.

Due to improved environmental performance at the proposed mill, Gunns managing director Greg L'Estrange inferred in March that ANZ might renew interest.

Gunns is under pressure to get funds and have the mill up and running before the end of August, when permits lapse. The company is selling hardwood and softwood assets for funding and debt repayments due by the end of June.

Also on the market are 150,000 hectares of plantations, with a book value of $826 million. The company said that it was working on a new facility that will help fund construction at Bell Bay.

"This work is well progressed. When in place this new facility will provide the funds necessary to continue with construction activities that have already commenced at Bell Bay," said L'Estrange.

Replacement of a $360 million "core trading finance" facility with ANZ is due in January 2012, and L'Estrange said it is also in the works.

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