KIPT takes the next step establishing a future
AUSTRALIA’S ONLY listed timberland company, Kangaroo Island Plantation Timbers, was scheduled to settle its purchase of the former New Forests estate on Kangaroo Island on 28 April, following the successful conclusion of a $33.5m capital raising.
The purchase of the NF estate on Kangaroo Island for $55 million was announced and a deposit paid in October last year. The transaction means KIPT will own about 80% of the plantations on the Island, which has around 18,000ha planted, mainly with bluegum.
The company has access to a bank debt facility of $25m to assist in completing the purchase. Funds from the placement and rights issue will be used for the balance of the acquisition costs and for working capital.
Timber on Kangaroo Island is currently a stranded asset. While some pines were planted in the early 1980s for processing in the local sawmill, most of the Island’s eucalypts were planted (for woodchip) during the managed investment scheme fiasco in the mid-2000s. Accordingly, the maturity profile of the Island’s estate favours harvesting in the next few years.
The company has lodged a development application with the South Australian Government to construct a deep-water wharf to enable it to export around 500,000 green tonnes per annum. Funding for the wharf is already in place.
Forest productivity levels on the Island have proved to be excellent, due to reliable rain, mild summers and low evaporation. Kangaroo Island Plantation Timbers now has the challenge of turning that productivity into cash, by getting approval for its deep-water wharf. Source: Kangaroo Island Plantation Timbers Ltd
Kangaroo Island thinning operations.
Logs loaded for processing.