Macquarie Infrastructure takes 49pc of Cubbie Station

Macquarie’s deal to buy 49pc of the Cubbie irrigation property includes giving water to rivers “when it’s most needed”.

Cubbie Station, near Dirranbandi in Queensland. Picture: Nigel Hallett

Australia’s largest cotton irrigator, Cubbie Station, will finally return to 49 per cent Australian ownership following two years of negotiations between its Chinese owner textile giant Shandong Ruyi and Macquarie Group’s infrastructure arm.

Under the deal announced Friday an agricultural fund managed by Macquarie Infrastructure and Real Assets (MIRA) and Shandong Ruyi will jointly own Cubbie Station, with its 93,700 hectares of land and a cotton ginnery. The acquisition also included a committment from the irrigator to release more water into the Murray Darling during drought conditions.

MIRA will acquire a 49 per cent stake in Cubbie, while the Chinese group will sell down its shareholding from 80 per cent to 51 per cent. As part of the deal Dubbo businessman Roger Fletcher will offload his 20 per cent stake in the asset.

The value of the deal was not disclosed.

Cubbie’s properties are located near Dirranbandi and St George in southwest Queensland. Its land area includes 22,100 hectares of irrigated cropping fields.

“Over the last two years we have established a wonderful relationship with Macquarie. We are very like minded in wanting to see these assets perform at their highest standards,’’ said Cubbie Agriculture chief executive officer Paul Brimblecombe.

Shandong Ruyi paid $230 million for Cubbie in 2012 but a condition of the sale was for the Chinese giant to sell down its stake to 51 per cent. In 2016 then Treasurer Scott Morrison urged Cubbie to find a domestic partner.

Cubbie Station is famous for its cotton. Picture: Nigel Hallett.

Macquarie Infrastructure’s head of agriculture, Liz O’Leary, said the deal offered an important addition to MIRA Agriculture’s asset portfolio. The group currently manages three wholesale funds on behalf of its investors with assets in Australia and Brazil.

“This transaction rally builds on our desire to give our investors access to quality agricultural assets. It is a pretty exciting opportunity for us to be involved with,’’ she said.

“We have looked at how Cubbie performs through the cycle, not just a single point in time.”

The Chinese owners have spent more than $50 million on Cubbie in recent years, including on water efficiency initiatives and a new solar energy farm.

“We can see agronomic and environmental opportunities and the opportunity to provide stability for the region,’’ she said.

That stability will stem from a move by the new joint-owners to enter into a binding commitment to voluntarily contribute water to the Culgoa River and Lower Balonne stream when it is most needed.

The commitment comprises a voluntary contribution of up to 10 gigalitres to the Lower Balonne over a five-day period following extended dry periods, which will be a major boost for the Murray-Darling Basin, especially for drought-ravaged communities in the Northern Basin.

Cubbie Station can store up to 469 gigalitres of water.

“For the past two years we have variously offered water back to the water courses. Now we are formalising by way of a binding agreement the enduring opportunity to further provide water when the river systems are at their critical need. For environmental purposes and downstream social demand,’’ Paul Brimblecombe said.

“At this time when the water is in its higher demand and in competition, it is of its greatest value.”

Federal Water Minister David Littleproud said in a statement that the deal on environmental water between the new Cubbie Station owners would contribute to Basin Plan water targets, mean less water needed to be recovered from other farmers and give certainty to communities “doing it tough”.

That includes the towns of Dirranbandi, St George and the surrounding districts.

The deal will also also provide continuity of employment for Cubbie’s 42 employees.