Re­cap­i­tal­i­sa­tion pro­posal

New deal set to push sugar in­dus­try for­ward

Central and North Rural Weekly - - RURAL HEALTH -

MACKAY Sugar has re­ceived a non-bind­ing in­dica­tive pro­posal for re­cap­i­tal­i­sa­tion from Ger­man-based sugar man­u­fac­turer Nordzucker AG.

The pro­posal re­mains sub­ject to fi­nal­is­ing a bind­ing agree­ment, with Mackay Sugar agree­ing to an ex­clu­siv­ity pe­riod un­til the end of De­cem­ber this year. If suc­cess­ful, the deal will see the agreed funds used for cap­i­tal im­prove­ments on mills, as well as a two-stage re­pay­ment of the $2/t levy to grow­ers.

Nordzucker is one of the lead­ing sugar man­u­fac­tur­ers in Eu­rope and is head­quar­tered in Braun­schweig, Ger­many. The of­fer is a ma­jor step for­ward in Mackay Sugar’s re­cap­i­tal­i­sa­tion process, although the fi­nal amount of equity and/or debt to be con­trib­uted by Nordzucker is still to be agreed.

The par­ties have said Moss­man Mill would not form part of the trans­ac­tion and would re­main sub­ject to the op­tion granted to Far North­ern Milling Pty Ltd. Mackay Sugar chair­man and CEO Mark Day said the pro­posal was an­nounced to grow­ers and in­dus­try stake­hold­ers at to­day’s AGM in Mackay.

Mr Day said the Board was “very pleased” to be able to make the an­nounce­ment and be­lieved the in­vest­ment had the po­ten­tial to take the Mackay sugar in­dus­try sig­nif­i­cantly for­ward.

“The non-bind­ing in­dica­tive pro­posal has been en­dorsed, in prin­ci­ple, by the Mackay Sugar Board,” Mr Day said. “But it is also im­por­tant that we em­pha­sise there is no cer­tainty, or guar­an­tee, the pro­posal would ul­ti­mately re­sult in a bind­ing of­fer or con­cluded trans­ac­tion.

“We are work­ing to­wards what rep­re­sents an im­por­tant in­vest­ment in Mackay Sugar, as well as in the in­dus­try as a whole, in this re­gion.

“Nordzucker has a long and suc­cess­ful sugar his­tory in

❝work­ing We are to­wards what rep­re­sents an im­por­tant in­vest­ment in Mackay Sugar. — Mark Day

north­ern Eu­rope with a her­itage very sim­i­lar to Mackay Sugar’s grower-owned share­holder base, dat­ing back to the early 1800s.”

While the non-bind­ing In­dica­tive Pro­posal has re­ceived in-prin­ci­ple sup­port from the Board of Mackay Sugar, it re­mains sub­ject to a num­ber of fi­nan­cial, reg­u­la­tory, le­gal and share­holder-con­tin­gent con­di­tions.

Mr Day said a se­ries of shed meet­ings would be held to dis­cuss the pro­posal di­rectly with grow­ers and share­hold­ers, who would be kept in­formed of the process as it de­vel­oped.

“Ul­ti­mately, the Mackay share­hold­ers will have to vote in sup­port of the fi­nal bid from Nordzucker, for the pro­posal to be suc­cess­ful,” Mr Day said. “The Board looks for­ward to hav­ing these shed meet­ings with grow­ers and share­hold­ers, to fur­ther

MOV­ING FOR­WARD: If the pro­posal is ac­cepted, agreed funds will be used on cap­i­tal im­prove­ments on mills. The fi­nal amount of equity and/or debt is yet to be set­tled. PHOTO: FILEdis­cuss this im­por­tant op­por­tu­nity, which is vi­tal for the fu­ture pros­per­ity of the sugar in­dus­try in Mackay re­gion.”The trans­ac­tion is sched­uled to be com­pleted in late March 2019, sub­ject to bind­ing agree­ment be­ing reached be­tween the par­ties.

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