Proactive Investors - Run By Investors For Investors

Kangaroo Island Plantation Timbers bags $20 million via oversubscribed share placement

The company is well funded to develop its export facility at Smith Bay.
Kangaroo Island Plantation Timbers bags $20 million via oversubscribed share placement
The eucalyptus grown on Kangaroo Island is of high quality

Kangaroo Island Plantation Timbers Ltd (ASX:KPT) has successfully raised $20 million via an institutional share placement at $2.00 per share, to commercialise its timber products.

The placement was heavily oversubscribed with a number of new institutional investors introduced to the register.

KPT owns 85% of the plantation forestry on Kangaroo Island, located off the mainland of South Australia.

Its portfolio is about 80% hardwood (eucalyptus) and 20% softwood (pine).

The eucalyptus grown on Kangaroo Island is believed to be equal to the best quality woodchips currently exported from Australia.

Following the completion of the placement, KPT will be well funded to undertake ongoing development activities in relation to its proposed export facility at Smith Bay.

The company is currently completing the permitting process for the construction of the wharf and site facilities.

KPT recently entered into a memorandum of understanding with Mitsui Bussan Woodchip Oceania, a subsidiary of Mitsui & Co Ltd (TYO:8031), to create an exclusive marketing arrangement.

Significantly, the arrangement provides that Mitsui will purchase up to 500,000 green tonnes per annum of woodchip from KPT on a free-on-board basis or equivalent.

The woodchip sales have an expected start date in the fourth quarter of FY 2018/2019, assuming timely development approval and a nine-month construction period for the company’s Smith Bay wharf.

It is worth noting that there is an emerging shortage of quality hardwood woodchips available to Asian markets, due to growing demand for fibre-based consumer goods, and significant supply constraints.

View full KPT profile View Profile

Kangaroo Island Plantation Timbers Ltd Timeline

Related Articles

October 20 2018
Montero Mining already has an attractive lithium portfolio in Namibia
KIPT trees on Kangaroo Island off South Australia
April 10 2019
MD John Sargeant will lay out the strategy for investors at Proactive’s CEO Sessions in Melbourne today.
Cobalt symbol, Co
March 12 2019
Winmar is planning a London listing and intends to return to the ASX.

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use