Mackay Sugar to acquire Mossman Central Mill for $26.4m
Mackay Sugar, Australia's leading sugar milling company, has entered into an agreement to acquire the milling and related assets of Mossman Central Mill for A$25.3m ($26.4m).
The acquisition is a part of the company's strategy to expand the operations and strengthen its core business.
Mackay Sugar chairman Andrew Cappello said this is a positive step for Mackay Sugar as it presents further cane expansion opportunities and will increase the company's sugar production.
"We will incentivise cane production and expect a 25% increase in cane supply in the first four years," Cappello added.
Under the agreement, the milling and related assets will be acquired by Mackay Sugar through the issue of approximately A$12m ($12.52m) in Mackay Sugar shares and refinancing A$13m ($13.56m) in debt. The shares, which represent approximately 3.3% of the issued capital of Mackay Sugar, will be held by Mossman Central Mill.
The transaction, which is subject to a number of conditions, is expected to be completed on 1 June 2012.
The Mossman Mill, which is located approximately 75km north of Cairns, Australia, is supplied with cane from approximately 7,300ha. The mill is designed to crush nearly 1 million tons of cane per annum.
Mackay Sugar operates three mills in Mackay, Queensland, Australia, which are supplied with cane from over 70,000ha. The company is also constructing a A$120m ($125.23m) cogeneration plant in Mackay, which is to be completed by February 2013.