TIM 0.00% 4.4¢ timbercorp limited

Timbercorp, page-9

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    Bit of support for Alpha---Alan Newman of Futuris sees growth in timber plantations too.
    from today's Westralian.
    ITC tips growth from APT stake

    By Sue Peacock

    UNLISTED timber plantation manager Integrated Tree Cropping remains on the acquisition path after securing a 50 per cent stake in failed rival Australian Plantation Timber.

    ITC chairman Bob Bunning said further rationalisation of the plantation management sector was expected to occur and the Futuris-controlled ITC was well placed to expand its plantation portfolio after taking over APT, which collapsed into administration and receivership in August.

    "The recent successful takeover of APT has allowed ITC to achieve certain efficiencies and improve our market spread and influence . . . we are now looking for other acquisitions," he said.

    The rescue deal included the sale of APT's 48,000 hectares of land - most of which is locked up under trees in WA, SA and Victoria - and its loan book to the New York-based Zurich Capital Markets for $82 million.

    This opened the door to further investment by institutions in Australia's emerging forestry sector, Mr Bunning claimed.

    Zurich will include the APT land in a $500 million fund it is planning to set up.

    ITC is also negotiating with Zurich to buy its land bank and yesterday announced it had signed a deal with Elders Rural Bank to provide finance to investors in its timber projects.

    ITC's loan book of about $10 million may also be sold to Elders Rural Bank under the restructure aimed at removing capital hungry businesses from its balance sheet.

    ITC managing director Tony Jack told shareholders at yesterday's annual meeting that ITC's finance arm would act as a loan originator and earn fees from Elders Rural Bank for signing up timber investors.

    Mr Bunning said ITC was now the biggest manager of hardwood plantations in Australia with more than 90,000 hectares, or about 22 per cent of the 432,000 hectares of land under hardwood trees in Australia.

    He said significant cash injections by Futuris, which would see the Alan Newman-led company emerge with just under 50 per cent of ITC if the debt was converted to shares, had enabled the company to secure control of APT.

    ITC is looking to leverage off Futuris"significant rural distribution network in promoting and developing its forestry products.

    The company may also benefit by sourcing agricultural merchandise at more competitive rates and by securing favourable bank funding through Elders Rural Bank.

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