Gunns shares continue to languishFriday 20 Jan 2012 Last week Gunns shares fell below 10 cents, taking the Tasmanian timber company's share price to a record low. This week it climbed back up to 11 cents. The company is reported to be valued at a 20th of what it was worth five years ago and since June, AU$126 million has been wiped off the company's market capitalisation value.A strong Australian dollar, uncertainty within the industry, the difficult conditions the company is trading in at the moment and the re-financing of the company’s current debt structure were raised as reasons for the rapid fall. Just before Christmas Gunns had also revised down its underlying earnings before interest and tax for the year to AU$30 million. Financial analysts have said that the record low share price is going to make it harder for the company to finance its AU$2 billion Tamar Valley pulp mill. On top of this, anti-pulp mill groups were this week threatening the ANZ bank with a national campaign action if it extends its debt deal with Gunns. The company is currently renegotiating a AU$340 million debt facility due for repayment on 31 January. |
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