Mackay Sugar hits at threat of law suit
MACKAY Sugar has lashed a group of minority shareholders who have threatened legal action over the company’s proposed $2 a tonne levy on growers.
In a statement last night, Mackay Sugar said the legal action would put the company’s future in jeopardy.
The company was adamant it was sticking to the proposed $2 levy.
The legal action would “severely limit” management’s options in dealing with the current problems, and indeed “may ultimately take the control of these decisions away from the company”.
Mackay Sugar’s chief executive, Jason Lowry, said many of the assumptions in relation to the proposed legal action are wrong, particularly in terms of the options that would be available for Mackay Sugar if the move was successful.
“Several of the proponents of this action have been involved previously in failed moves to consider the sale of Mackay Sugar either through a floating of the Company or via a straight takeover,” Mr Lowry said.
“The recent survey of Mackay Sugar growers clearly identified that only 40 per cent of the growers polled agreed to selling the business. For the Board to achieve a sale, 75 per cent of shareholders would need to vote to support the sale.
“The proponents know it is unlikely that such a vote would be achieved.”
He said it may appear that some shareholders were trying to achieve a sale of the company.
Mr Lowry said “Mackay Sugar growers and shareholders needed to clearly understand that if the option to deliver the preferred approach via the $2 per tonne contribution by growers was removed, further deterioration of the asset base would likely force a decision to sell the business due to the debt situation.”
He said, “I thought we had made it clear to growers in recent meetings and communications that Mackay Sugar was truly at a crossroads.”
Miguel Maestre, Casey Willetts, Jesse Willetts and Chris Brown