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Willmott Forests Project 2007

Willmott Forest Project 2007
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $3,900 (ex GST)
Term of Project 26 years
Research AAG 4 stars
ATO Product Rulings 2006/128
Telephone: 1800 801 866
Fax: (03) 9696 5567

Investment Summary
The major drivers of future wood demand will be global population, living standards and timber’s cost competitiveness relative to substitute products.

What is Willmott Forests offering
Willmott Forests is offering an investment in a softwood plantation where Growers will be carrying on a business of forestry operations to produce softwood sawlogs and pulplogs. The primary use of softwood sawlogs sold in Australia is the production of structural sawn timber used in house construction and this market is dominated by softwood. The investment offers the potential for sound returns combined with appropriate investor safe guards.

How is the Project structured
Each Grower under this Product Disclosure Statement enters into two Agreements with the Manager.

1 Forestry Management Agreement (for further details refer to page 65)
 - Part 1: Preparation and Planting;
 - Part 2: Maintenance.
2 Land Tenancy Agreement (for further details refer to page 63 of the PDS)

How much will it cost

The cost is $4,290 per Woodlot (including GST) (0.5 of a hectare).

There are no annual on-going fees for maintenance of plantations or the granting of Land Tenancy of land until Harvest.

Under the Forestry Management Agreement, Growers are required to pay $4,290 (including of GST) per Woodlot for preparation and planting (Part 1), and 7% of the Gross Timber Proceeds received from the harvesting of trees for maintenance of the Plantations (Part 2).

Under the Land Tenancy Agreement, Growers will be granted a right to occupy an identifiable area of land. The rent per Woodlot will be equal to 2% of Gross Timber Proceeds received from the harvesting of trees, payable at the time of harvesting.

The Harvesting Fee charged to the Grower for engaging the Manager to arrange for the marketing and harvesting of their timber is 1% of Gross Timber Proceeds. For further details refer to pages 8-9 of the PDS - The Process.

What are the payment options

CASH: Cost per Woodlot = $4,290 (including GST)

TERMS: The Manager offers 12 months interest free terms

FINANCE: MIS Funding No.1 Pty Limited will provide approved Growers with a finance facility for 100% of the Woodlot investment (including GST). The actual loan options and indicative interest rates are as follows:
3 Years at 11% interest p.a. All principal and interest options are available with a 36 month Interest Only Period.
5 Years at 11% interest p.a.
7 Years at 11% interest p.a.
10 Years at 11% interest p.a. *
15 Years at 11% interest p.a. *

* a minimum investment of 10 Woodlots is required for 10 and 15 Year loan options.

The above interest rates are indicative interest rates only and based on the relevant ‘MIS Funding No.1 Cost of Funds (fixed rate)’ rate as at 11 May 2006. The actual rate will be set and fixed for the period of the loan on 30 June in the financial year of investment. For further details refer to page 68 - Section 10.7. MIS Funding No.1 Pty Limited may in its absolute discretion offer individual loan terms to Growers that differ from the above. However, the terms of these individual loans will not be materially different to those set out in Product Ruling PR2006/127 and PR 2006/128 issued by the ATO.

Repayments are due on the last business day (Victoria) of each month commencing on July in the financial year of the investment.

How does the Project work?
Growers apply for one or more Woodlots and, if accepted, Willmott Forests will:
  • administer the Project;
  • grant a right to occupy the land to Growers;
  • seek registration of a Forestry Right in relation to Project Land granted to Growers under the PDS (refer to pages 8 and 22 of the PDS for further details);
  • obtain planning and development approval;
  • provide Growers with regular reports;
  • prepare the plantation site(s);
  • plant at a minimum rate of 550 seedlings per Woodlot;
  • grow trees to produce quality sawlogs;
  • manage the plantations through to Clear Fell (i.e. Year 25);
  • arrange harvesting operations (unless the Manager is notified otherwise by the Grower - refer to pages 8-9 of the PDS for further details); and
  • distribute harvesting proceeds to the Grower.

Demand for end product
As world demand for forest products is increasing, supply is becoming more restricted. Softwood continues to replace hardwood in the traditional markets, most importantly in house framing and other construction activities. Pinus radiata has captured the major portion of the house framing market and is now used in virtually all building and furniture applications.

No on-going fees until harvest
Once the initial Woodlots have been issued, other than annual insurance premiums payable after the Stocking Guarantee expires, Growers do not have to pay any other fees until harvesting which commences with the 1st Thinning anticipated at Year 13.

100% tax deductibility
The cost of the Woodlot (excluding GST) is 100% tax deductible. The GST component will be either tax deductible or able to be claimed as a GST input credit, depending on the individual circumstances of the Grower. The Australian Taxation Office has issued Product Ruling PR 2006/127 in respect of the Project that confirms the tax treatment for the Growers who enter the Project on or before 30 June 2007 and PR 2006/128 for Growers who enter the Project after 30 June 2007 and before 30 June 2008.

Stocking Guarantee
The Manager provides the Grower with a Stocking Guarantee for a period of two years from the date the Grower is registered as the holder of the Woodlot. After the period covered by the Stocking Guarantee, it is compulsory for the Grower to maintain their own Standing Timber insurance. For further information, refer to page 23 of the PDS.

Willmott Forests
Established in 1980, Willmott Forests is an integrated forestry company that plants, manages, harvests, processes, supplies and replants softwood resource. Willmott Forests is a Quality Endorsed, publicly listed company with a market capitalisation in excess of $95.6 million (as at 30 June, 2006). Willmott Forests manages over 30,000 hectares of commercial plantations on behalf of more than 3,400 individual Growers via managed investment projects. The majority of these plantations are located in south-east New South Wales and north-east Victoria. Key Features Of the world’s raw materials, timber is one of the very few that is renewable, sustainable and environmentally friendly. There is probably no other raw material which is so versatile.

The above is an extract from the Willmott Forest Project 2007 Product Disclosure Statement.

Simply download an Investment Brochure/PDS above. It’s that easy!

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