Tasmanian timber company Gunns has been granted a trading halt pending the announcement of a “capital raising and equity investment”.
There has been speculation that New Zealand billionaire Richard Chandler, the biggest shareholder in Canadian-listed Chinese timber company Sino-Forest, may rescue the beleaguered company, but industry sources believe a rights offer to all shareholders is more likely.
Gunns shares closed on Friday at 12.5c, valuing the company at A$106m. Under Australian Securities Exchange listing rules any capital offer exceeding 15% of the value of the company must have shareholder approval and be offered to all shareholders.
Last week, Gunns announced that terms for an 11-month extension of its A$340m debt facility and a A$200m working capital facility had been agreed with 10 banks..
However, one bank in the syndicate will meet in mid-February to approve continued participation.
There is also speculation that the announcement could relate to the sale of plantations.
