Tully Sugar slams administrator over bid for Proserpine
THE Chinese-owned Tully Sugar has slammed KordaMentha, the administrator of the Proserpine Sugar Mill, before a crucial creditors vote tomorrow, for failing to allow proper consideration of its $128 million takeover bid.
THE Chinese-owned Tully Sugar has slammed KordaMentha, the administrator of the Proserpine Sugar Mill, before a crucial creditors vote tomorrow, for failing to allow proper consideration of its $128 million takeover bid.A former Queensland treasurer, Keith De Lacy, who is the vice-chairman in Australia of Tully's parent, China Oil and Food Corporation (COFCO), said the members of the Proserpine Co-operative Sugar Milling Association - one of the last co-ops in the farm sector - were being short-changed by KordaMentha, which had recommended a lower $120 million bid by Sucrogen, formerly the sugar arm of CSR Sugar that was bought by the Singapore giant Wilmar International.He said the report to the creditors should be amended to include an evaluation of the two bids."If I was a grower I would be very angry," Mr De Lacy said, "because they have been dudded to the tune of $8 million. It doesn't sound much but that's 25 per cent of free equity" after debts of about $90 million were paid off, he said."I have never in my life seen an administrator enter into a 'no-shop' clause with a bidder when another bid is floating around. They ought to be trying to get an auction going."Mr De Lacy would not comment on the likely vote at tomorrow's meeting but noted Sucrogen was owed $15 million by Proserpine and would be voting for the deal as a creditor, as indicated in a report in yesterday's Whitsunday Coast Guardian. The sale to Sucrogen requires approval of more than half of Proserpine's creditors, by value and number.Mr De Lacy said if Westpac, a big lender, did not vote, "the Sucrogen vote becomes very important".The KordaMentha administrator, Robert Hutson, said he had signed a contract with Sucrogen on November 16 because it was the best offer at the time. "You can only sell something once," he said. Tully had "not put its best foot forward, as indicated by the fact that it increased its bid by $6 million on the day we announced the sale to Sucrogen."We've got a contract in place. We're bound to perform under that ... It's now in creditors hands."Separately yesterday, the Thai sugar company Mitr Phol released its bidder's statement outlining its $245 million recommended takeover bid for the owner of the ASX-listed Maryborough sugar mill MFS Sugar.Mitr Phol said if its bid was successful, it would "continue the employment of MFS's employees and for MFS to continue to be managed wherever possible by MFS's existing management team."