Mackay Sugar of­fers $150m+

Port Douglas & Mossman Gazette - - NEWS - Camp­bell Gel­lie

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.

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