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Financial cloud over Penola Pulp Mill

Posted on October 22, 2008, 8:08am and updated on October 23, 2008 at 10:44 am

Financial backers have retreated from plans to arrange funding for the $1.5b Penola Pulp Mill.

ANZ Infrastructure Services (ANZIS) general manager John Clarke yesterday confirmed plans to financially advise on the project were withdrawn “around two months ago”.

“We are still involved in a development sense, but we have resigned our role as the major finance adviser,” Mr Clarke said.

“That means we are not doing any detailed work on the pulp mill.

“We haven’t decided that it’s not a good project — it just hasn’t progressed as far as we would like it to at this stage.”

Mr Clarke said the decision had not been made as an expression of any lost confidence with Protavia, nor was it a result of the global banking crisis, however he said any large project was “certainly affected” by the financial climate.

He said despite the global uncertainty, ANZIS was still engaged in supporting other large projects, recently purchasing the Hallet Two wind farm in South Australia from AGL.

Mr Clarke said ANZIS had no other interests in major projects for the South East or Western Victoria.

Mr Clarke said only Protavia could answer whether or not a new finance partner had been found to help source the required debt and equity.

Protavia general manager John Roche said ANZIS had not totally withdrawn from the project.

“I am reading from an email they sent our managing director — they are still involved with the project, but are awaiting on the developer to reach certain milestones before they can progress any further,” Mr Roche said.

“On the question about whether the financial market has caused any problems, the answer is yes it has, but the developer still has more work to do.

“I’m still confident they will provide the money, provided we provide to them a package — I’m confident that if we provide to any financial institution a package which fully covers all of their requirements, then they will be interested in the deal.”

Mr Roche said there had been many delays with the pulp mill project, but he was confident it would be financed and built.

Regarding woodchip supply, Mr Roche said he had been in continued discussions with “various suppliers”.

Bluegum giant Timbercorp has been a long-term supporter of a pulp mill, however its forestry general manager Tim Browning is currently in Singapore and senior manager Darren Shelden said he was unable to comment in his absence.

ITC chief executive officer Vince Erasmus said it was over 12 months since he had been in discussions with Protavia.

“We have heard nothing at all from them for a very long time,” Mr Erasmus said.

“ITC and Great Southern have committed our woodchips to Japan and to Port of Portland infrastructure and all our woodchips are going there.

“It is unlikely there will be enough woodchips in the region without ITC and Great Southern to support a pulp mill.”

CHRIS OLDFIELD

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Comments

2 Responses to “Financial cloud over Penola Pulp Mill”

  1. Pyrrho on October 22nd, 2008 12:44 pm 1

    Come visit the magical kingdom of Penola. home to the magical Nimbys, Luddites and the scary Nattering Nabobs of Negativity. (shiver)
    Only you better hurry, children, because they have found the magic well of future prosperity, and are drinking it dry. By the time their children are old enough to wind the handle on the well, it will be bone dry and full of dust.

  2. James on October 22nd, 2008 6:52 pm 2

    what the hell has this guy been smoking ^^