Tree scheme rescued from $50m debt

INVESTORS in Australian Plantation Timber’s (APT) managed investment schemes will still get their tax deductions, now that the company has been rescued by Zurich Capital Markets and Integrated Tree Cropping (ITC).

APT was placed into administration last year with debt in excess of $50 million.

ITC managing director Tony Jack says that looking after the investors was the most important part of the takeover.

“After a year in which all operators in the sector were battered by negative perceptions, it was important to restore some confidence in the industry by demonstrating protection mechanisms in the MIS legislation work,” he says.

“The trees are still there and being looked after and investors’ tax deductions are not under threat.”

As part of the rescue package for APT, ITC is providing $5 million of working capital, $1.9 million of additional capital, and a $10 million maintenance and expenditure guarantee. In exchange, ITC will end up with a 50 per cent stake in APT.

APT was listed on the ASX and there will be both shareholder and creditor meetings during the next couple of months to approve the deal.

For unsecured creditors, the deal is worth about 50 cents in the dollar. They are also to share a 15 per cent stake in APT. The company’s secured creditor, Commonwealth Bank, will receive full payment of its debts, estimated to be about $50 million.

There are about 4,000 investors in APT schemes. A total of 48,000 hectares of trees were planted. This will be combined with ITC’s plantations making it one of the leading players in the timber industry with more than 75,000 hectares of plantations.