|
Offer closes |
30 June 2008 unless
withdrawn earlier. |
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Overview of investment
options |
The PDS offers you the
opportunity to invest in a forestry
managed investment scheme. There are two
planting options available:
High Value Timber option – Investment in
plantations of native australian
hardwoods managed primarily for the
production of high value sawlogs from
harvesting between 15-20 years after
planting. It is expected that commercial
wood products will be produced from
thinning the plantations approximately
6-8 years after planting.
Pulpwood option – Investment in
plantations of native australian
hardwoods managed for the production of
pulpwood from a once-only harvest
approximately 10 years after planting.
It is not expected that the pulpwood
plantations will be thinned.
You may choose to invest in either or
both of these options. |
|
Unit of investment |
You will be investing in
a plantation unit (unit), or units. a
plantation unit is a separately
identifiable area of land within a
plantation.
In respect of the High Value Timber
option the area of each unit will be
0.75 hectares and will comprise a
woodlot of each of four different
species.
The area of a pulpwood unit may vary
depending on the productivity of the
property on which your units are
located. Each pulpwood unit is to be an
area assessed as capable of producing
approximately 225 cubic metres of
pulpwood approximately 10 years after
planting. Pulpwood units will have an
approximate area in the range 0.8–1.2
hectares. |
|
Application fee |
You can invest in either
planting option by paying the
establishment services fee of $4,950
(inclusive of $450 GST) per plantation
unit. |
|
Other fees and costs |
There are no ongoing
annual fees during the term of the
project apart from insurance. a Land fee
and a Management services fee are
payable from your share of harvest
proceeds. Insurance is payable annually
by all investors. |
|
Terms Payment |
Subject to the approval
of ITCPM and payment of the Terms
payment deposit you can elect to pay the
establishment services fee by Terms
payment in 11 instalments. |
|
Taxation |
The ATO has issued
product rulings PR 2008/28 and PR
2008/29 in relation to the project. The
product rulings confirm tax
deductibility for establishment services
fees and certain other costs which may
be incurred by you as referred to in the
product rulings. |
|
Minimum investment |
The minimum investment
in the project is one unit in either
planting option. Further investment can
be made in increments of one unit.
|
|
Minimum subscription |
There is no minimum
level of subscription that must be
raised under either planting option for
the project to proceed. The responsible
entity is able to operate the project
regardless of the number of units
issued. |
|
Tree species |
The High Value Timber
option will comprise plantings of
Tasmanian blue gum, spotted gum, red
Mahogany and gympie Messmate. having
different species in the investment
enables us to match suitable species to
different sites and diversifies the risk
of relying on a single species in a
single forestry region.
It is intended that the pulpwood option
will comprise a single species
(Tasmanian blue gum). Tasmanian blue gum
is the most widespread species planted
for pulpwood in Australia. Other
suitable pulpwood species may be planted
if ITC consider they are better suited
to the sites available. |
|
Location of the
plantations |
The location of your
plantations will vary depending on which
Planting Option you choose, and where
your Units are allocated.
The plantations that form the High Value
Timber Option will predominantly be
located in the Albany region of Western
Australia (Tasmanian Blue Gum and
Spotted Gum) or in coastal north
Queensland (Red Mahogany and Gympie
Messmate).
It is intended that the plantations in
the Pulpwood Option will predominantly
be located in the Albany or Esperance
regions in Western Australia, or the
Green Triangle Region of SW Victoria and
SE South Australia. Minor plantings may
occur in coastal sub-tropical
Queensland.
The ITC Group manages plantations in all
the regions in which plantings may occur
under this Project. These regions have
the characteristics of rainfall and soil
that make them suitable for plantation
development. |
|
Structure of the
investment |
The documents that
establish the Project are the
Constitution, Land Agreement and
Management Agreement (together referred
to as the ‘Project Agreements’):
• The Constitution establishes the
Project and defines ITCPM’s obligations
as the responsible entity under the
Corporations Act;
• The Land Agreement will grant you
rights to the land on which your
Plantation Units will be located; and
• The Management Agreement establishes
ITCPM as your service provider to
establish, manage, harvest and market
the wood products grown on the land and
any interests arising from carbon
sequestrated by the plantations on your
behalf.
These are standard documents for
establishing a forestry managed
investment scheme. It is important to
understand your rights and obligations
under the Project Agreements. |
|
Forestry management |
Your forestry investment
will be managed by ITCPM. They will be
responsible for all aspects of the
Project throughout its term.
ITCPM has engaged ITC Limited to manage
the operational forestry and technical
aspects of the Project. ITCPM and ITC
Limited are part of the ITC Group, which
is a wholly owned subsidiary of Futuris
Corporation Limited.
The ITC Group offered its first
investment project in 1992 and now
manages over 50 managed investment
schemes on behalf of over 16,500
investors. ITC is an integrated forestry
company with one of the largest hardwood
plantation estates under management in
Australia as well as being one of the
country’s largest hardwood sawmillers.
Their parent company, Futuris
Corporation Limited, is a leading
Australian diversified company with a
market capitalisation of $2 billion as
at 30 June 2007. |
|
Project land |
ITCPM will
take and register head leases over the
land in its name. This provides you with
security of tenure for your Plantation
Units. |
|
Time of planting |
Your investment will be
planted within 12 months of you being
accepted into the Project. The optimal
time for planting will vary across the
different planting regions due to
differences in climate. Planting will be
scheduled when seasonal conditions are
suited to high survival, which usually
means times of the year with higher
rainfall. |
|
Minimum stocking |
ITCPM will, at its
expense, replant areas of dead or
missing trees in the planting season
following initial establishment so that
sufficient trees are established for a
viable plantation. |
|
Pruning |
Pruning
will be conducted on selected trees in
the High Value Timber Option. Pruning
will promote development of high value
pruned sawlogs. You will not have to pay
for pruning at the time the operation is
conducted. The Management Services fee
includes pruning. |
|
Project returns |
As both
Planting Options are long-term forestry
enterprises, there is a range of factors
that may impact on the performance of
your investment such as seasonal
conditions between planting and
harvesting, the price received for the
wood products and product volumes. The
impact of these factors may vary and
therefore it is not possible to predict
with certainty the financial returns of
the Project. However, there is
information in later sections of the PDS
, including information relating to the
timber industry and potential volumes,
to assist you in making your own
assessment of the benefits of
participating in the Project.
In addition to returns from the sale of
wood products, you may also receive
financial return from the trading of
interests arising from carbon
sequestered by your plantation.
You should seek professional advice when
considering potential returns. |
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Risks |
The
Planting Options offered under the
Project are long-term forestry ventures
that are subject to agricultural risks,
commercial risks and general risks. ITC
have attempted to identify the potential
risks, and their impact in the PDS .
There may be other risks they have not
identified. |
|
Insurance |
Each year,
ITC will arrange insurance for your
plantations, provided that insurance can
be arranged on Reasonable Terms.
Insurance is expected to cover damage by
fire, lightning, hail and windstorm. The
level of cover to be effected may vary
from year to year depending on the state
of the insurance market at the time.
Insurance is payable annually by all
investors.
Prior to the start of Clearfall harvest,
you will be required to pay insurance
premiums on an annual basis, generally
around October in each year. After the
start of Clearfall harvest, premiums
will be paid by ITCPM and recouped from
Harvest Proceeds. |
|
Pooling of wood products for
marketing |
ITC will
arrange the harvesting and marketing of
the wood products. The wood products
from all plantations under each Planting
Option will be marketed collectively.
The proceeds of sale under each Planting
Option will be paid by ITCPM into a
Proceeds Fund. Costs of Harvest and
Marketing and Land and Management
Services fees will be payable from the
Proceeds Fund. |
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Marketing of sawlogs |
In relation to the High
Value Timber Option, ITCPM has been
granted a Put Option by which they will
be entitled to sell sawlogs at harvest.
The Put Option was granted by ITC
Timber, an ITC Group company which
processes and value-adds high-grade,
quality timbers for architectural
applications, furniture, flooring and
construction materials. The Put Option
specifies how the prevailing market
price at the time of harvest will be
determined and provides that the
purchase price for the logs must be a
fair and reasonable price, as determined
by an independent expert, taking into
account a range of factors including the
proposed end use of the logs. |
|
Marketing of pulpwood |
ITC play a leading role
in price negotiations for Australian
plantation-grown hardwood woodchips to
Japan. They have enjoyed significant
success in recent years. The benchmark
price for woodchips for sale to Japan is
set on an annual basis, and the 2008
negotiations resulted in a 9.5% price
increase, for the direct benefit of
investors. |
|
Marketing of carbon |
ITC will arrange for the
marketing of interests arising from
carbon sequestered by the plantations on
behalf of Growers in each Planting
Option. A Management Services fee will
be payable from proceeds. The present
opportunity to realise a monetary value
for carbon sequestered in plantations is
limited. This situation may change in
the future. |
|
Secondary markets |
Your participation in
the Project should be considered as an
illiquid investment as there is
currently no active secondary market. As
a consequence of changes to taxation
laws in 2007 in relation to buying and
selling of project interests, a
secondary market may develop during the
course of the Project. |
|
Information and
reporting |
Each year you will
receive a report from ITCPM and the
Independent Forester summarising the
progress of the plantations in the
Planting Options relevant to you. |
