Queensland’s giant Cubbie Station will be sold for marginally less than the mooted $300 million price tag to one of China’s leading textile producers, Shandong Ruyi.
The Foreign Investment Review Board is believed to have recommended to the federal government that the sale be allowed, with an announcement due today.
The Cubbie property holds the largest water licence in Australia and has long been the centre of dispute over water rights for NSW farmers along the Murray Darling Basin.
Cubbie Station, a collection of three vast properties with interconnected dams that can hold up to 539 billion litres of water – more than Sydney Harbour – had racked up $320 million in debt by the time administrators were called in three years ago.
However, concerns have been raised whether the plant will continue to be Australian-managed and there is about 20 per cent Australian equity in the Shandong Ruyi-backed consortium.
The 96,000ha Cubbie cotton plant, Australia’s largest cotton grower, is set for a bumper year with its vast dams still brimming after two seasons of good rain.
With cotton prices easing from an average of $550 a bale last year to $400, the plant’s sale for a price near $300 million is a tidy improvement on the $220 million price originally floated when put on the market in 2009.
Treasurer Wayne Swan last night insisted the acquisition of Cubbie Group would not impact on water management arrangements, as the company would remain subject to state and Commonwealth regulations.
None of the parties to the deal would comment yesterday but the National Party’s Senate leader Barnaby Joyce has led opposition to the sale, calling on the FIRB to block it.
Mr Joyce argued that because the property produces 10 per cent of Australia’s cotton crop and has massive irrigation entitlements attached to it, Cubbie is a strategic asset that should not be sold.
Cubbie chairman Keith de Lacy has said there was nothing wrong with it going to a Chinese buyer provided the local management was kept.