Kimberley Timber retreats from MIS sector in wake of collapses

A forestry manager has withdrawn its managed investment scheme (MIS) from the market due to the recent adverse publicity about the sector.

Kimberley Timber managing director Rick Ferdinands told Money Management the decision to withdraw its MIS was taken late last week.

“It was unfortunate as we have been doing the right thing,” he said. “Our wholesale scheme had been audited by [the Australian Securities and Investments Commission] and the [Australian Taxation Office] and we passed both their audits.”

Ferdinands said investors who had taken up the retail offer this year would be getting their monies returned to them. The manager was planning to raise about $12 million this financial year. However, Kimberley will continue to pursue operations in Western Australia growing sandalwood, teak and mahogany.

“We will be pursuing our bio-energy fuel products made from forestry waste products,” he added. “MIS was a very small part of our business, so it won’t have an impact on our overall forestry operation.”

But Ferdinands did not rule out re-entering the MIS market at a later date.

“Agribusinesses will have to go back to the drawing board to produce products that will meet investors’ demands in the future,” he said.

Meanwhile, Arafura Australian Pearls closed its MIS project last week having raised about $10 million of the $15 million it hoped to raise this year. Arafura chief executive officer Andrew Hewitt admitted it had been a tough market in which to raise capital.

“We have achieved the budget we set ourselves in this tough market,” he said. “In a better period we would have expected a lot more take up, but this is just part of the (economic) cycle.”

Hewitt said the company had not decided whether it would be a long-term MIS provider.

“We will probably do another scheme in 2010 and that might be the end of it,” he said. “It has been a good form of debt fundraising for us.”

Hewitt said demand for pearls had fallen slightly during 2009 due to the global recession, but the market was still strong and prices firm.

Tropical Forestry Services (TFS) also said it was on target for achieving its capital raising this year through a MIS.

TFS sales manager Trevor Pollard said the company was on target to raise $65 million this year, which will see 930 hectares of land planted with trees.

“It is highly likely we will be fully subscribed this year,” he said.

Pollard confirmed TFS will be producing investment schemes next year.