Chinese consortium to pay less than $300m for Cubbie Station

QUEENSLAND'S giant Cubbie cotton station will be sold to the Chinese for less than $300 million-, insiders say.

QUEENSLAND'S giant Cubbie cotton station will be sold to the Chinese for less than the mooted price tag of $300 million-plus, insiders to the controversial deal say.

The Foreign Investment Review Board is believed to have recommended to the federal government that the sale be allowed, with an announcement due within days.

One of China's leading textile producers, Shandong Ruyi is leading a consortium bidding for the trio of properties astride a Murray-Darling tributary near the NSW border, and it was tipped to have offered between $320m and $350m.

This put it well above the threshold of $244m to require a board review into whether the sale was in Australia's national interest. Shandong Ruyi's bid is the only application relating to Cubbie before the agency.

A source familiar with the details of the deal said yesterday the sale price had come in below $300m, partly due to flat cotton prices.

The vast concern will continue to be Australian-managed and there is about 20 per cent Australian equity in the Shandong Ruyi-backed consortium. The irony is that 96,000ha Cubbie, Australia's largest cotton grower, is set for a bumper year with its vast dams still brimming after two seasons of good rains.

However, cotton prices have eased from an average of $550 a bale last year to $400. A sale price of $300m is still a handy improvement on the $220m price that was sought when the enterprise was initially put on the market after going into voluntary administration in the aftermath of a long run of drought in 2009.

None of the parties to the deal would comment yesterday but National Party Senate leader Barnaby Joyce, who lives in the nearby town of St George, has led opposition to the sale, calling on the FIRB to block it.

Senator Joyce argues 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.

However, other locals say foreign ownership is a subsidiary consideration to maintaining the jobs and business Cubbie pumps into the border area's economy.

Cubbie chairman and former Queensland treasurer Keith de Lacy has said there was nothing wrong with it going to a Chinese buyer provided the local management was kept.

The buyout is being co-ordinated by one of Australia's oldest and best-known wool processors, the Lempriere family.

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 $320m in debt by the time administrators were called in three years ago.