Listed timber business Kangaroo Island Planation Timbers (ASX: KPT) has entered into voluntary suspension from the ASX after its plantations were significantly affected by the South Australian bushfires.
The company is still assessing the total damage done to its plantations, but it is estimated that about 90 per cent of the plantations on Kangaroo Island have been fire-affected.
The bushfires on Kangaroo Island, south-west of Adelaide, have destroyed a significant part of the western side of the island, where the majority of KPT's assets were located.
The company is currently assessing fire damage, both from the air and on the ground, and determining which plantation areas are too damaged to have any commercial value.
KPT says it hopes that some fire-affected areas can be salvaged; the areas that have relatively high survival rates will be allowed to grow until harvest.
The company's plantations were largely affected by the Ravine Fire, which started burning on 30 December 2019 and was most destructive four days after ignition after it became uncontrollable due to catastrophic fire conditions.
KPT will remain in voluntary suspension while the company assesses its opportunities to sell fire-affected timber and to make arrangements with insurers, bankers and project partners.
Additionally, the company will use its time in suspension to mitigate risks for the remainder of the fire season and to assist the Kangaroo Island community.
The listed company, which owns 15,000 hectares of plantation on Kangaroo Island, is due to resume trading on 31 January.
Speaking to The Advertiser, KPT executive director John Sergeant was optimistic about the prospects of recovery for the company and the likelihood of insurance securing the future viability of the company.
The Kangaroo Island bushfires have been devastating for the local community and businesses that operate on the South Australian island.
Notably, the $140 million KI tourism industry will be hardest hit. Southern Ocean Lodge, Hanson Bay Cabins, Hanson Bay Wildlife Sanctuary, Western KI Caravan Park and the Kangaroo Island Wilderness Retreat were all extensively damaged by the fires.
The award-winning Southern Ocean Lodge was completely destroyed in the bushfires, with owners Bailee Lodges estimating that it will take several years to rebuild the $60 million resort.
How to donate
If you would like to donate to an organisation assisting the victims of the bushfires the following organisations are accepting any and all help available:
- St Vincent de Paul Society
- Australian Red Cross
- Port Macquarie Koala Hospital
- CFA Victoria
- NSW Rural Fire Service
Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support