GSI rescue hopes still alive

THE GSI Rescue Group is still working to deliver its plan to recapitalise Gippsland Secured Investments, which was placed in receivership in September after concerns were raised about its solvency.

Eight GSI staff in its Bairnsdale office and three at Warragul were last week made redundant by GSI’s administrator Ernst and Young, citing the need to limit costs borne by note holders and business.

The rescue group is working through several matters that need to be resolved with the receiver, the trustee and the corporate regulator before the plan can be presented for note holder approval.

If the rescue plan succeeds, the rescue group hopes GSI can resume trading as early as February.

In the absence of unforeseen circumstances, the plan aims to deliver value of up to 100 cents, plus interest, to note holders – more than anticipated by the receiver if the company is wound down.

Recapitalisation also would save considerably on an estimated $7 million in costs to wind up the company. Importantly, it would allow GSI to contribute to the community as a successful local business and second-tier lender for Gippsland.

The group of Gippsland business leaders who make up the rescue group is encouraged by the support they have received during its work with GSI’s receivers, the trustee and other stakeholders.

Group spokesman Duncan Johnston said under the plan, note holders would begin receiving interest on their investments as soon as the plan is formally approved by ASIC, GSI note holders and share holders, and the Federal Court of Australia.

“We understand that note holders want answers and can assure them that we are making solid and steady progress. There is a lot of work to be done and we are very encouraged by support we have received from GSI s receiver and trustee,” he said.

“Rescue group members continue to commit an enormous amount of their own time and money to achieve this goal — they wouldn’t be doing this if they didn’t believe they could deliver in the all the circumstances the best possible outcome for GSI customers and the Gippsland community.”

Mr Johnston said for the rescue plan to be successful, the rescue group must finalise details of its recapitalisation plan in consultation with the trustee and receiver.

The GSI Rescue Group, comprising local businessmen John Dahlsen, Duncan Johnston, Richard Rijs, Ray Hack, Bill Dahlsen and Harry Rijs, has been fighting to stop the company being wound down since mid July.