First Super mulls Timbercorp rescue
Friday, 3 July 2009 12:10pm
First Super, the $1.5 billion industry super fund for the furniture, pulp, paper and timber industries, has entered a consortium with South Australia-based Penola Pulp Mill and the management of Timbercorp Forestry to discuss the acquisition of Timbercorp's forestry assets.
The consortium, called TCGrowers, also includes a "significant international investor", which the fund had declined to name.
The deal, should it receive the green light, will see a timber industry fund taking a hands-on approach to deal with commercial affairs directly impacting its industry and to a larger extent, its members.
"The consortium has a long term interest in Australian forestry and an ability to facilitate the best commercial outcome for MIS growers," said the consortium in a letter to Timbercrop forestry growers.
In a media statement released yesterday, First Super said it believed the consortium represents an opportunity for establishing a new forestry company, while drawing on the management expertise within the existing Timbercorp business.
"Over the last few months, First Super has worked closely with an international fund with similar objectives and profiles, experienced in and capable of owning, managing and operating large forest estates for the long term," said First Super.
If the Timbercorp MIS investors agree to an independent valuation for the trees, First Super and its consortium partner will undertake all necessary steps to consider acquiring those assets on normal commercial criteria, taking into account the current debt and outstanding ongoing land rental and forest management obligations.
But such a move could potentially attract the attention of prudential regulator and whether buying assets in Timbercorp breaches the "sole purpose test".
First Super has declined to comment and it is not known how many, if any, of Timbercorp employees are fund members.
First Super is made up of the Furniture Industry Retirement and SuperannuationTrust (FIRST Super), Pulp and Paper Workers Superannuation Fund (PPWSF) and the Timber Industry Superannuation Scheme (TISS) which merged July last year.
Ruth Liew
