Mackay Sugar offers $150m+
MACKAY Sugar growers will be asked to surrender control of their milling business in return of more than $150million.
This is in a bid to save the company from debt that is strangling the business.
At the first of a series of shed meetings with growers on Tuesday new chairman and chief executive officer Mark Day gave a frank assessment of Mackay Sugar’s performance.
Hamstrung by confidentiality agreements, Mr Day, who asked growers to call him Mark, couldn’t say which companies or how many were interested in the business.
However, he said there were a few but not a lot. All were willing to spend more than $150million to take control of the business.
These companies all wanted a majority share in the business for their investment though none wanted 100 per cent ownership, Mr Day said.
The final details of the percentage share split still needs to be calculated but Mr Day said they would be in the ball park of 50-75 per cent.
Money they invest in the business would be spent on paying down some of Mackay Sugar’s $169million debt, returning the $2 a tonne levy growers had already paid and the essential cost of improving the performance of the mills.
He told growers the “mills will open and crush this year” while warning them that performance and reliability would be no different to last season, when 350,000 tonnes of cane was left in the field.
Mill reliability was at 80 per cent last year and Mr Day said it would take three to four years of investment to pull the company’s three mills back to a respectable condition.
He said this would cost about $150million.
Growers left the meeting not knowing much more than what was said at the annual general meeting in October.
However, Mr Day promised to hold more shed meetings in the coming months and eventually present the growers with a preferred option for an investor.