Mackay Sugar's Racecourse Mill in the middle of the crushing season.
Mackay Sugar's Racecourse Mill in the middle of the crushing season. Campbell Gellie

Millers tight-lipped on potential sale of Mackay Sugar

THERE will be one question on every cane grower's lips today - "who wants to buy or invest in Mackay Sugar".

Chairman Andrew Cappello said the company wouldn't announce who was interested at this afternoon's annual general meeting but has hinted he would prefer someone already in the sugar industry.

Anyone interested would be combing through the 2016/17 annual report released ahead of the AGM.

It reveals that Mackay Sugar recorded its third consecutive net loss before tax in 2016/17 - $33.4million - $7.4million more than in 2015/16.

This is despite it increasing its operating revenue by $66million to $499million for the year.

However it did reduce its debt, the driving force behind the company's search for fresh capital; as at May 31 debt was $188m, down $24.5m on the year before.

Meanwhile, the six owners of the other Queensland mills are busy crushing and remaining tight-lipped about their possible interest.

Mr Cappello said if Mackay Sugar was going to be sold, or partially sold, he wanted it to be to a company with similar values to the grower-owned miller.

Mackay Sugar is being forced to seek fresh investors as it needs an immediate $144million - $85million to pay off some of its debt and $59million to upgrade its mills.

Its original refinancing plan was put on hold as one of the three strategies fell over. The sale of the cogeneration plant, with a $120m book value, hit a roadblock when the six offers received weren't high enough. But a potential buyer might come from one of those bidders for the cogeneration plant, as Mr Cappello said they were interested in the "big picture".

"The interested parties in the cogeneration plant were happy to get in the bigger picture (the whole company)," he said. "It was always an option if there were reasonable offers for a partial or full sale and given now we have gone through the process with the cogeneration plant they are showing interest in the whole business."

MSF Sugar, which owns four Queensland mills, wouldn't comment on its interest in Mackay Sugar but a spokeswoman did say the company was focussed on its operations and "growing (its) own business".

A Wilmar spokesman said it would not comment on another milling company, as did COFCO.

WH Heck and Sons was too busy to answer questions because its general manager was trying to get its one mill crushing again after a breakdown.

Bundaberg Sugar and ISIS Central didn't respond to requests for comment.

 

American company Bunge was interested in buying the Tully Mill in 2011 but a spokesperson said the company was no longer interested in sugar.


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