Elders confirms ATO, FIRB backing for Santanol
Elders has assured growers in its Sandalwood Scheme there is "no alternative proposal" to the Santanol offer.
In a statement released yesterday, Elders Forestry Management Limited (EFML) said it was "pleased to confirm" the Australian Taxation Office had confirmed the proposed sale to Santanol would not alter the tax consequences for growers.
In addition, the Foreign Investment Review Board has given approval to the sale, which will be backed by Santanol's foreign financial partner — a "significant global investment house".
The EFML statement went on to warn growers they should be aware of the "limited financial capacity" of publicly listed distressed debt and equities specialist Hamilton Securities, which has launched a rival offer to growers.
"Based on its most recent financial report, Hamilton Securities had total shareholders' equity of $2.3 million at 31 December 2012 and reported a net loss of $35,041 for the six months ended 31 December 2012," said the EFML statement.
Based on the most recent trading price of Hamilton's 2.3 million shares ($0.35 per share), the company's market capitalisation is approximately $800,000 — and $30 million to $50 million would be required to maintain the plantations "prior to harvest proceeds being realised", said the EFML statement
Hamilton Securities announced on Friday that it had secured an ‘in principle' agreement from TFS Sandalwood to manage the scheme.
Hamilton executive director Giles Craig said growers were no closer to learning the identity of the "significant global investment house" that is partnering with Santanol.
"The fact that a large offshore group is willing to finance Santanol shows clearly that they see value in this deal," said Craig.
"Unfortunately for growers, this deal is grossly unfair and these very attractive plantation assets are being offloaded by Elders at a firesale price," he added.
Growers are set to vote on the Santanol proposal in a meeting in Melbourne on Thursday.
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