News

Aussie offer for Cubbie 'ignored' in favour of Chinese bid

A $250 million Australian offer for Cubbie Station which was not subject to finance was rejected by administrators almost a month before they sold the giant irrigation enterprise to a Chinese-led consortium.

The offer - fully funded and not requiring Foreign Investment Review Board approval - did not appear to be given due consideration by administrators McGrathNicol or investment bank Goldman Sachs, which is acting as a financial advisor to the firm.

James Loel, a solicitor representing the Australian bidders, said the offer had been made in writing on September 18.

A day later, he received a note from McGrathNicol - appointed as the administrator of Cubbie Station in 2009 after the vast property had run up debts of about $300 million - advising him to contact Goldman Sachs, and providing an address and telephone number.

On October 15, Goldman Sachs Australia managing director Lachlan Edwards wrote to Mr Loel, telling him a contract had been signed "with other parties" and that he was "not in a position to further discuss the matter".

At about the same time, news broke of the 93,000-hectare property's sale to a consortium led by Shandong RuYi.

The sale was said to be conditional upon finance and regulatory approvals.

The purchase price has not been revealed but is believed to be between $225 million and $270 million.

Documents, including the current creditors' report, as well as correspondence between Mr Loel and the Cubbie Station administrators, have been secured by APN's Balonne Beacon.

They raise questions as to why the Australian bid was never considered and come after suggestions were raised in a Senate committee hearing on Wednesday that Goldman Sachs might have given preferential treatment to the Chinese consortium for its own business interests.

Under Section 420A of the Corporation Act, administrators must ensure they get the greatest return for shareholders and investors.

Mr Loel said when his clients made their offer, Cubbie Station administrators had not signed a contract with anybody else.

He said he believed this indicated that interested Australian parties never had a legitimate chance of buying the property.

"It appears they were committed to Shandong RuYi at the exclusion of all others," Mr Loel said.

Mr Loel said he believed the contract was "conditional as to both finance and regulatory approvals", and that it wasn't a done deal.

"... I don't understand why we can't be negotiating now (with administrators) subject to the Shandong RuYi contract falling over," he said.

The station's sale to the consortium, led by Shandon RuYi and including an Australian company called Lempriere, was approved by the Federal Government on the advice of the Foreign Investment Review Board.

Nationals Senator Barnaby Joyce, who has been the sale's most vocal opponent, said a Senate inquiry "absolutely" needed to be called.

"If people aren't telling the truth, the only way we can get them to tell the truth is with a Senate inquiry," he said.

Independent Senator Nick Xenophon said he believed administrators should appear before the current Senate inquiry into the Foreign Investment Review Board inquiry.

"I think there's an issue of a level playing field," he said.

"We need to make sure Australian bidders were given the same opportunities."

The Balonne Beacon asked McGrath Nicol to explain why the $250 million offer, not subject to finance, was rejected in favour of continued negotiations with the Chinese-led syndicate and why Australian bidders were denied access to Cubbie Station's financials in order to complete due diligence.

A spokesman said they would not "be offering any comment" on the matter.

Cubbie Station, at Dirranbandi in south-west Queensland, is the largest irrigation operation in Australia and will produce about 5% of the country's total cotton crop this year.

The Shandong RuYi Scientific and Technological Group Co is described as a privately-held textiles company that employs 30,000 people and generated revenue of $2 billion in 2010.

 

 

AUSSIE OFFER: This letter from solicitor James Loel to McGrathNicol shows an Australian entity made a $250 million bid for Cubbie Station on September 18.
AUSSIE OFFER: This letter from solicitor James Loel to McGrathNicol shows an Australian entity made a $250 million bid for Cubbie Station on September 18.
OFFER REFERRAL: In this September 19 letter, McGrathNicol's John Cronin refers the solicitor representing the Australian bidders to Goldman Sachs.
OFFER REFERRAL: In this September 19 letter, McGrathNicol's John Cronin refers the solicitor representing the Australian bidders to Goldman Sachs.
NOT INTERESTED: Goldman Sachs Australia managing director Lachlan Edwards tells James Loel a contract for Cubbie Station's purchase has been "recently signed" with another party.
NOT INTERESTED: Goldman Sachs Australia managing director Lachlan Edwards tells James Loel a contract for Cubbie Station's purchase has been "recently signed" with another party.

Topics:  agriculture, barnaby joyce, cotton, cubbie, cubbie station, dirranbandi, firb, foreign investment review board, goldman sachs, lempriere, mcgrathnicol, nick xenophon, politics, treasury



Spring brings the rise of the tick

TICKED OFF: Owners of tick infested properties have an obligation to take actions to prevent cattle tick spreading.

WHEN spring arrives, so do the ticks.

Board veteran retires after 26 years of stopping rabbits

PASSION TO PROTECT: Rod Towner has retired from the Rabbit Board after 26 years of dedicated service.

Darling Downs Moreton Rabbit Board farewells board member

Warwick family celebrates 130 years of history

PIONEERS: Peter Maher and sister Rita Collins recently celebrated 130 years of the Maher family in the Warwick area.

The Maher family have celebrated 130 years in the Warwick area.

Local Partners

9000 reasons to support our community clubs

Community clubs are good at what they do. They are not so good at telling the world about what they do, as Clubs Queensland CEO Doug Flockhart explains.


'Baby' recreates famous Nirvana cover shot 25 years later

The baby from Nevermind album has recreated the iconic cover shot.

PREVIEW: Luke Cage origin story is a strong addition to MCU

Mike Colter in a scene from the TV series Marvel's Luke Cage.

MIKE Colter stars as latest Marvel superhero to get his own series.

Kate goes down fighting in heated Survivor elimination

Australian Survivor contestant Kate Campbell.

YOGA teacher's 'good guys' alliance fails to get off the ground.

Emily Blunt's (almost) singing career

Emily Blunt nearly became the British Britney Spears.

Angelina is blocking calls from Brad Pritt

Angelina Jolie has reportedly blocked Brad Pitt's number.

Apocalyptica 'seek and destroy' sceptics with 'master' set

Apocalyptica play Max Watts in Brisbane on their Shadowmaker Tour.

Review of final show of Apocalyptica's tour

$40million hotel, shops development project for Mackay

Mt Pleasant hotel and retirement accommodation, proposed at 194-202 Malcomson St.

$40m development to take Mackay to 'the next level'

Rural properties expected to soar as investors seek income

Rural properties are should become highly sought after

Property 200m from ocean selling for just over $100K

BEACHCOMBER PARK: Work has started on a new $19.2 million development at Toogoom.

The estate's developer is offering huge discounts for early buyers.

UPDATE: Former rodeo champ's sale rained out, now back on

Larkhill local Ken Consiglio is having an auction of most of the things on his property.

'People kept showing up and we had to turn them away'

First stages of $25 million housing development underway

New development on Madsen Rd - The Springs.

The blocks of land are much bigger than usual

Couple build their own 'tiny house' for $45k

Holly Bowen and Oli Bucher built their "tiny house" themselves, only hiring a plumber and an electrician. Photo/supplied

The house, which is built on a trailer and can be towed.