Gunns, the ASX-listed forest plantation owner, is in a trading halt as it looks for new capital after New Zealand-born billionaire Richard Chandler backed out of a cornerstone role in a A$280 million ($360.7 million) deal.
The Tasmanian-based company requested a two-day halt after it was "advised that the Richard Chandler Corporation does not intend to proceed with its participation in the proposed capital equity raising" outlined last month, it said in a statement to the ASX.
"The company is in discussions with equity investors in respect of the raising" and it will announce more information about the recapitalisation at the end of the discussions, it said.
Gunns shares last traded at A16c, valuing the company at A$140 million. Chandler's investment vehicle has been doing due diligence on Gunns for the last month, as it weighed up taking a A$150 million stake in the company as part of a rights issue. He was ranked at 230 on Forbes global list of billionaires with a net worth of US$4.6 billion.
That evaluation included whether social value is created, such as establishing jobs and improving sustainable environmental practices, attracting local support, imposing strong corporate governance, making appropriate financial returns and setting up conservative debt levels, Chandler said last month.
