Australia’s second-largest sugar milling company, Mackay Sugar Limited, has announced that a majority of its farmer-shareholders (75 %) have voted in support of a takeover by German sugar producer Nordzucker AG. The farmers will retain a 30 % shareholding in return for Nordzucker’s investment in the company, which will be put towards undertaking capital and overseeing maintenance works on its sugar mills.
“In regards to the state of the market, we export 80 to 85 percent of our raw sugar as a bulk commodity to overseas customers,” said a spokesperson of Canegrowers, the leading body for Australian sugarcane growers. “Therefore, the state of the market is not so much dependent on our domestic Australian consumers, but on the state of the world market. Currently, world sugar prices are low. However, our proximity to growing Asian markets is likely an advantage for a company such as Nordzucker.”
The move is cited as a “huge relief” for growers who have been “living with great uncertainty” after several seasons of poor milling performance. Mackay Sugar states that it hopes that the acquisition by the European manufacturer will bring a “rapid and positive” end to questions about the company’s overall financial viability, after a “perilous” financial situation in 2017.
Nordzucker is to contribute equity capital in the amount of USD 42.5 m for the 70 % stake in the share capital. Mackay Sugar is also to receive an additional shareholder loan of up to USD 42.5 m.