| The announcement that Gunns Ltd's receivers, KordaMentha, have sold most of the failed company's remaining assets to New Forests for a price reported to be $330 million reveals a telling feature of how big business operates. When Gunns went into receivership it owed secured creditors (of whom the ANZ bank was the largest) $635.9 million. Last year Anchorage Capital bought 70 per cent of this debt at a price believed to be between 40 and 45 cents in the dollar, an outlay of approximately $189 million. Seventy per cent of the sale price is $231 million, which would leave Anchorage with a tidy $42 million profit, less whatever fees they paid KordaMentha. Nobody as yet has secured the pulp mill site or permits. New Forests obviously wasn't interested, despite the unseemly haste with which the State Government and the then Opposition (now the Government) rushed to pass legislation designed (at KordaMentha's request) to enhance the value of those assets. Anchorage Capital might still want to squeeze more profit out of these, but even if they lie idle until the permits run out and the site reverts to bush, $42 million is not a bad profit after six months. It makes John Gay's gain from insider trading look like chickenfeed. And what exactly did Anchorage do to earn this? They didn't employ a single Tasmanian. They didn't create a single product or provide a single service. The kindest thing to say about them is that they got lucky. Not so lucky were the Tasmanian contractors, small investors and other unsecured creditors who have no hope of ever seeing the $170 million owed to them when Gunns Ltd collapsed. |
This whole saga has not been primarily about a pulp mill, nor even about the plantations. It has been about the timber industry being used as a front for the transfer of wealth from ordinary Tasmanians to the coffers of international finance corporations. It has also been about how both major political parties have aided and abetted this transfer. Don't forget that a considerable proportion of Gunns' assets were provided in various ways by the State and Federal Governments. This means that some of your money, as a taxpayer, now belongs to the shareholders of Anchorage Capital.
Yours in the hope that we can do better than this in the future
Tim Thorne
