GTP 0.00% 12.0¢ great southern limited

re: Why the slump?

  1. 10,605 Posts.
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    Sorry for the spam on GTP but here is the history of Colonial/CBA as far as I can determine.

    Colonial bought its initial shareholding (or at least revealed it) in March 2001.

    HOMEX - Perth
    Commonwealth Bank of Australia became a substantial shareholder in
    Great Southern Plantations Limited on 05/03/2001 with a relevant
    interest in the issued share capital of 10,491,267 ordinary shares

    It was almost certainly purchased as a part of a huge days trading on the 2nd March 2001 which recorded the sell down by founding director Helen Sewell of some 25 million shares in her holding entity Honeysip.

    HOMEX - Perth
    Helen Sewell has today advised the company that her interest in the
    company has been reduced from 22.83% to 4.3%, following the sale of
    25,000,000 shares by her associated entities.
    The sale of shares was made for personal reasons and follows Ms
    Sewell's recent change to non-executive director.
    Ms Sewell said today "the company is about to enter into a new era,
    having recently signed a heads of agreement with major Japanese
    companies for the purchase and processing of woodchips. It is an
    appropriate time for the other shareholders to take a strategic
    position in the company and to benefit from future growth. It will
    also improve the liquidity in the stock."
    Macquarie Equities have advised the company that the shares sold by
    Ms Sewell's entities have been placed with a range of institutional
    Ms Sewell's private company continues to hold some 5.75 million
    shares in the company. Ms Sewell said "it is my intention to retain
    this shareholding for the long term. The shares will provide a strong
    earnings stream with significant potential for capital growth."
    Co-founding director John Young has stated that he has no intention
    of reducing his shareholding in the company. Mr Young has also
    advised that he will be extending his current contract with the
    company for a further three years.
    Dated 6 March 2001

    At the time GTP prices were trading in the vicinity of $1.52 - $1.58. ING revealed its 7,7% holding in April which was presumeably purchased at the same time as the CBA

    HOMEX - Perth
    ING Australia Limited became a substantial shareholder in Great
    Southern Plantations Limited on 05/03/2001 with a relevant interest
    in the issued share capital of 10490063 ordinary shares (7.77%).

    The second tranche of shares bought by Colonial in March this year cost them $1.00 each. So you can see why I find this so fascinating! CBA via Colonial has now had three major bites into GTP The first was six months before the Federal Government moved to do anything about the tax problem that was affecting the industry and the share price subsequently sank as low as 35c in August 2001. The second was in January 2002 (I think I previous said March - I was confusing myself with the 2001 purchase) when they acquired ING's stake for $1 each only to see GTP reactivate the DRP in March and declare the special div in April.

    Interestingly Colonial/CBA never released a change in substantial shareholding announcement relating to the January purchase although the Australian Financial Review article of the time by Cathy Bolt suggests that CBA was adding to their existing 7.7% stake.

    Here is the news article from January 2002

    ING stake in Great Southern goes west

    Author: Cathy Bolt
    Date: 17/01/2002
    Publication: Australian Financial Review
    Page: 14

    ING Australia has dumped its major shareholding in timber investment manager, Great Southern Plantations Ltd, less than two months after major changes in the senior management of its small-cap portfolio.
    But in a reflection of the varied sentiment towards the tax-effective timber investment sector, buyers of the 7.7 per cent shareholding are believed to have included at least two other institutions.
    Great Southern's other major institutional shareholder, Colonial First State, confirmed it had topped up its existing 7.7 per cent stake. ``We are still believers," its small-cap fund manager, Mr Barry Henderson, said.
    ``I wouldn't say we are happy but it's very cheap. I still think there's going to be demand for tax-effective products and Great Southern is a conservative way to play it."
    Two lines of Great Southern stock, totalling 10.68 million, or just under 8 per cent of the company, were specialled by Bell Potter yesterday at $1, a 7.4 per cent discount to Tuesday's close of $1.08.
    The stock closed yesterday down 1¢ at $1.07.
    Great Southern's managing director, Mr Cameron Rhodes, said yesterday it was encouraged by the apparent addition of more institutional investors to its register.
    He said it followed recent good volumes of trading in the stock and a firming of its share price following the lows to which all the timber investment stocks sank last year after a plunge in sales and the move into administration of Australian Plantation Timber Ltd.
    ``We are fairly confident of a pretty good year," Mr Rhodes said.
    Great Southern shares have more than doubled since early October. Timbercorp Ltd has recovered from about 40¢ to 67¢.
    The sector has also been buoyed by the interest demonstrated in the assets of APT.
    As part of a restructure agreed to by APT's administrator, Zurich Capital Markets will inject $82million to take over APT's 48,000ha of plantations and a loan book valued at $37 million.
    Another Perth timber investment manager, the unlisted Integrated Tree Cropping, will fold its retail investment business and 27,000ha into APT and contribute $6.9 million in capital, plus offer a $10million guarantee in return for a 50 per cent stake in the restructured APT.

    And that of course leads us to the CBA announcement of 1/6/02 declaring they had ceased to be a substantial shareholder on the 6/6/02 and the rest of the trail.

    So, as you can see its unlikely they have traded out of the existing holdings at a profit even with the help of the 64c DRP. I would love to know exactly how they ended up playing it just from a strategic point of view if nothing else. If they sold prior to 24/4/02 then they didn't qualify for the DRP though they could have exited at prices which very briefly touched $1.32 though the volume was more in the vicinity of $1.20 - 1.22. That would have nearly given them break even on their entry price though there weren't enough shares traded for this to be the case imo.

    More likely they sold post the cutoff in which case they sold most of the holding at prices more like 70c and under.

    What a fascinating piece of strategy. In retrospect the thing I should have done was sell all my shareholding after the special div was announced but before the 24/4 and then buy it back before the drp shares were issued. I'd have been able to double my shareholding. And I'll bet my hat that the shares will be back in the $1 + area in no time presuming GTP's trading is as we have heard so that would be a major% return plus the 20 to 30% post the announcement of the special dividend.

    Isn't hindsight wonderful ? I was going to put the whole history up on HC for the trading benefit of everybody but given the poo flying around I had thought stuff it - its one for the private trading log records.

    Remember when I posted in April asking if anyone knew how share prices reacted in these sort of circumstances and no-one knew?
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