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Kangaroo Island Plantation Timbers gets second $10 million insurance payout

The company remains committed to plantation forestry operations following summer bushfires with the proposed Kangaroo Island Seaport to play a key future role.

Kangaroo Island Plantation Timbers gets second $10 million insurance payout
KIPT plans to bring the land back into full production as soon as possible

Kangaroo Island Plantation Timbers Ltd (ASX:KPT) (KIPT) has received a second progress payment of $10 million from its treecrop insurance policy.

Including this latest payment, the company has now received $20 million in progress payments.

The balance of KIPT’s claim is being progressed by the insurer. The policy has a limit of claims of $65 million.

KIPT will apply the funds to reduce its Commonwealth Bank of Australia (ASX:CBA) loan to minimise future finance costs. The loan balance will be reduced to $7.5 million.

Committed to plantation forest industry

The company remains committed to plantation forestry operations following summer bushfires with the proposed Kangaroo Island Seaport to play a key future role.

KIPT plans to bring the land back into full production as soon as possible and in order to do that the tree crop, 95% of which was damaged in the fires, must be harvested.

To get value from the current crop, the Kangaroo Island Seaport is needed to get the product - logs, woodchips or pellets – off the island.

Managing director Keith Lamb recently said KIPT intended to fund, construct and operate the port business from revenue generated from the salvaged wood.

Lamb said that the key message was that even though KIPT had an interruption to the business on the current crop, the long-term proposition was still the same as it had been previously.

“Kangaroo Island is still a good place to grow trees with above-average biological growth compared to the mainland and this hasn't changed.”

Quick facts: Kangaroo Island Plantation Timbers Ltd

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ASX:KPT
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Market Cap: $47.15 m
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Kangaroo Island Plantation Timbers' Keith Lamb updates on insurance payouts

Kangaroo Island Plantation Timbers Ltd's (ASX:KPT) Keith Lamb tells Proactive they've received a further insurance payout in the wake of the summer bushfires. He says $4.2 million has been received to cover the replacement cost of fire-damaged houses. The fires in December 2019 and January...

on 6/4/20

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