Drought to force QIC’s hand

Queensland Investment Corporation is believed to be weighing a sale of its North Australian Pastoral Company after buying most of the agricultural business for $400m in 2016.

While the state government-owned investment company that has $86bn of assets under management has not yet moved forward with a sale, it is understood that a move is being considered while rural assets are struggling with drought on the east coast and floods this year in the north.

The speculation about NAPCo’s future comes after the company recently hired Richard Brimblecombe as its chief executive, replacing Phil Cummins, who was hired last year.

NAPCo comprises one of Australia’s largest cattle portfolios and controls 5.8 million hectares in northern Queensland and the Northern Territory.

QIC had earlier been tipped as a potential buyer of the Consolidated Pastoral Company, which was once owned by the Packer family and has been put on the market by private equity owner Terra Firma through Goldman Sachs.

QIC did not return a call when contacted by DataRoom.

However, the investment company later said in a statement that it remained committed to NAPCo.

“QIC is very happy with NAPCo’s strong performance, especially its continued growth and resilience during the recent floods and droughts that have affected many farmers across Australia,” QIC chief executive Damien Frawley said in a statement.

Other rural companies under the spotlight include the listed Australian Agricultural Company that owns and operates feedlots and farms covering about seven million hectares in Queensland and the Northern Territory.

Bahamas-based billionaire Joe Lewis owns almost 46 per cent of the company and holds the cards when it comes to its future.

Parties are understood to have been making approaches about privatising the business while many view delisting as the best way forward.

Another option is finding a major shareholder to acquire the remaining shares that Mr Lewis does not hold.

AACo’s market value is about $593m.