Following the request for a two day trading halt last week, timber and woodchipper giant Gunns Ltd. has requested an indefinite trading suspension on the Australian Securities Exchange as it weighs the options of a $276 million federal forest peace agreement.
The Tasmania-based company announced to the Australian Securities Exchange that the deal between Tasmanian and federal government bodies has potential material implications for the company. “It is expected that the discussions will provide the necessary information for the Company to provide clarity to the market in respect of the Company’s position in the industry,” Gunns said Monday.
“And this suspension may well last perhaps even up to a couple of weeks while Gunns works through the issues surrounding the weekend's state and federal government announcement,” the timber company said. Gunns says it expects to discuss the agreement with the state government in the shortly, and it will provide the market with an update later in the week.
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The request for the trading suspension comes just a day after Prime Minister Julia Gillard announced the intergovernmental deal in Launceston on Sunday. The agreement is based on a statement of principles signed last year between industry groups, environmentalists and the CFMEU.
“The plan includes $85 million to support contractors and their families affected by the downturn and $43 million to protect new areas of high-conservation-value forests. A further $120 million over 15 years will go towards diversifying the economies of impacted towns and about $7 million a year will be used to manage new reserves,” News.com.au reported.
Resources Minister Bryan Green has said that there is only $23 million in the state and federal forest peace agreement that can be allocated to Gunns Ltd.