The Chinese company COFCO is in line to buy the North Queensland Proserpine Sugar Mill after the management rejected a $115 million takeover offer from Singapore's Sucrogen.
More than 30 per cent of the 214 Proserpine farmers in the co-operative voted against the proposal from Sucrogen to purchase the mill. The proposal had to win 75 per cent approval to be passed.
The last co-operative mill left in Queensland is $15 million in debt to Sucrogen after a bad season. The mill is expected to pay the loan in five working days and meet its financial obligations to Westpac Bank which involves reducing its debt to $35 million by the end of October.
Tully Sugar, a subsidiary of China Oil and Food Company, made an offer of $120 million to buy the mill which topped Sucrogen's initial offer of $115 million.
The Sucrogen offer was still the only offer the Proserpine farmers had to consider since the Proserpine board argued that they didn't know enough about the COFCO offer to recommend it to the co-operative.
COFCO, which is a fully owned Chinese company, purchased the Tully sugar mill in July with plans to expand its sugar operation in Australia.
COFC Australia Deputy Chairman Keith De Lacy said that has met with the Proserpine board to discuss its offer and to ensure that that loan facilities were put in place to support the mill.
"We expect that the Commonwealth Bank will be in contact with Westpac Bank today to ensure there is a clear and smooth transition of the banking arrangements supporting the Proserpine mill," De Lacy said.
"We are keen to finalize our offer to Proserpine Sugar members and we will be holding discussions with the Proserpine board today to gain their approval for access to the mill and data room to enable us to finalize our offer immediately."
Sucrogen chief executive Ian Glasson said the company will not be increasing its offer. It remains the biggest sugar mill operator in Australia with seven operating mills.