Including the latest payment, the company has now received $30 million in progress payments on this insurance policy.
The policy has a limit of claims of $65 million and additional benefits of $3.2 million for other items.
Committed to operations
KPT remains committed to plantation forestry operations on the island off South Australia following the bushfires in December and January which damaged 95% of the tree crop.
With a market cap of approximately $46 million, KPT shares have been almost 5% higher to 85.5 cents intra-day.
The balance of the company’s claim is being progressed by the insurer and further details will be released once the claim has been finalised.
Fully repaying loan
$7.5 million of the funds from the latest payment will be applied to fully repaying the company’s Commonwealth Bank loan.
A separate policy is held for farm buildings and infrastructure, for which $4.2 million has been received.
The final instalment is due for the remaining portion of this claim and an announcement will be made when this is finalised.
Proposed seaport will play key role
KPT’s commitment to continuing operations involves the proposed Kangaroo Island Seaport playing a key future role.
Bringing the company’s land back into full production as soon as possible involves harvesting the damaged crop.
To realise value from the harvesting, the seaport is needed to get the product - logs, woodchips or pellets – off the island.
Managing director Keith Lamb said previously that KIPT intended to fund, construct and operate the port business from revenue generated from the salvaged wood.
He 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.”