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



How to survive a bushfire in your car

IT SOUNDS like a nightmare, but it can happen.

Eight reasons to join the RFS

SPREAD across 93% of Queensland, the Rural Fire Service has about 36,000 volunteers. And you could be one of them.

What if my insurer gives me grief?

CLAIMING your insurance cover after a natural disaster can go one of two ways. It can be a breeze, or like pulling teeth.

100 jobs by Christmas challenge earns government praise

Employment Minister Grace Grace applauds Warwick businessman's challenge.

State Government praise for Warwick businessman's challenge.

Warwick business owners are taking the challenge

No Caption

A couple of Warwick businesses are already right behind the plan.

Wagners challenge $235m rail transfer hub InterlinkSQ

The prize is the lucrative inland rail freight business

Local Partners

Businesses challenged to find 100 youth jobs by Christmas

IN THIS, the season of giving, a businessman is challenging business leaders to deliver 100 jobs to unemployed young people for Christmas.


Don't miss the free Bunnings Christmas party

Free Bunnings Christmas Family Night

WARWICK'S Bunnings Warehouse will come alive tonight for Xmas

Rose City unites in festive event

Erin and Keely Hilton.

Local performers entertain at Carols in the Park

Safe fun in the water at WIRAC

SWIM STAR: Zac Sorenson having a ball at the GH Foundation Warwick Aquatic Participation Day for adults with a disability.

WIRAC is holding a GH Foundation Aquatic Participation Day today

Walk in artistic expertise

Local artist, Franco Arcidiacono preparing for the Floor Walk.

Journey through exhibition a special opportunity.

Brad Pitt bids to keep custody battle private

Brad Pitt will go to court to keep his custody battle private

Sia has split from her husband

Sia has split from her husband Erik Anders Lang.

Amy Schumer thanks Barbie trolls for hateful comments

Amy Schumer is in the lead role for the new Barbie movie

Shannen Doherty's husband is suing for destroyed sex life

Shannen Doherty's husband is suing her former manager

Azealia Banks' battery case against Russell Crowe dropped

Russell Crowe will not be charged with battery

Ipswich City Properties asset portfolio retains its value

Ipswich City Council Administration Building, South Street, Ipswich. Photo: Claudia Baxter / The Queensland Times

New website launched by Ipswich City Council

All I want for Xmas is a property bargain

$259,000, 13 Guy Street, Warwick. A block from Warwick's CBD, this graceful character home has three bedrooms and a study.

Ring in Christmas with one of these property bargains under $300,000

INSIDE STORY: The highlights of your $150 million CBD

GRAND PLAN: The highlights of the Ipswich CBD redevelopment and where they will be located.

Work on city heart's radical transformation to begin next year

VOTE IN OUR POLL: Sand mine opponents face serious dilemma

Public meeting for the proposed sand mine at Maroochydore last week.

Coast MP calls on Minister to stop KRA proposal with stroke of a pen

Developer's grand new multi-million dollar estate

NEW ESTATE: This is the only plan revealed by the property developer's new Billabongs Estate in Agnes Water.

DEVELOPER given the go ahead for a massive estate with 149 homes.

Ready to SELL your property?

Post Your Ad Here!