Pulpmill backer backs out

In May 2008, ANZ told Gunns it won’t be funding its $2 billion pulp mill in northern Tasmania. ANZ has been Gunns’ main banker for 22 years but was facing a volcanic reaction from customers and shareholders if it helped get the mill built. This announcement was quite a body blow, but Gunns grimaced and said there were plenty of other financiers just itching to throw money at their project. Macquarie Bank was reportedly considering involvement.

In this world of time-sensitive projects, on the global it’s possibly snookered. Timber analyst, Robert Eastment of IndustryEdge, believes it will be a challenge to achieve funding for a project this size in the current international credit climate.

Sydney businessman Geoffrey Cousins is also warning of a public backlash against companies that help Gunns fund the pulp mill; even international lenders will spark a hostile reaction if they fund the mill. He said the protests against the Gunns mill were probably almost more widely reported in the London newspapers than they were in Australian newspapers.

Gunns was aiming to start mill construction this winter.

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