The purchase of QLD’s iconic Cubbie station by a consortium of investors has been approved.
The consortium consists of 80% Chinese Shandong Ru Yi (textiles) and 20% Australian Lempriere (wool & grain marketing company).
Cubbie’s land spreads across two main properties near Dirranbandi and St George covering around 93,000 ha, with about a third of land irrigated.
While the farming enterprise has around $465m in assets, it had a reported debt of $320m in 2009.
The sale price is rumoured to be close to $300m even with all of the water storage dams full.
Apart from cotton, Cubbie also grows wheat, sorghum, sunflowers, barley, chickpeas and corn.
There is an enforceable undertaking set by Federal Treasurer Wayne Swan which will require Shandong Ru Yi to sell down the 80% holding to no more than 51 per cent within three years.
The company has been in voluntary administration since 2009 under administrators who will not disclose the actual sale price. Last year the company’s receivers McGrathNicol reported Cubbie’s 249,000 bale crop in 2010-11 was worth more than $150m. But after deducting typical industry production costs, the average profit from the big prices that season probably translated to a pre-interest and wages profit of around $43.5m – roughly enough to cover the year’s interest bill and administrative costs ($1m pa), although not much more.