Chinese sell down their 80 per cent stake of Cubbie Station

Cubbie Station’s Chinese owners - Shandong Ruyi - have finally sold down their 80 per cent stake in Australia’s largest irrigated cotton property.

Better times: The last time Cubbie took water from the river system was in April 2017 when it drew 14GL, or about 9 per cent of the 156GL that passed through St George.

CHINA’S $30 billion textile giant Shandong Ruyi has finally wound down its 80 per cent stake in Australia’s largest irrigated cotton property, Cubbie Station, to 51 per cent.

Ruyi was originally required to wind down its Cubbie Station ownership to 51 per cent within three years of purchasing the property in 2012.

But it was not until today that the Chinese giant finally complied, with Macquarie Infrastructure and Real Assets (MIRA) taking a 49 per cent stake in Cubbie.

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It was former Labor treasurer Wayne Swan who approved the sale of Cubbie Station to Ruyi in 2012 for $240 million on condition it “sell down its interest in the Cubbie Group from 80 per cent to 51 per cent to an independent third party (or parties) within three years”.

But Prime Minister Scott Morrison, in his former role as Coalition Treasurer, then extended Ruyi’s deadline in 2016 by another three years.

In announcing the sale the new joint-owners put an environmental sweetener on the table for the Northern Murray Darling Basin, in the form of a voluntary contribution of up to 10GL to the Culgoa River and Lower Balonne intersecting streams.

In a joint statement Ruyi and Macquarie stated the 10GL would “increase the volume of water in the river at critical times and help deliver a range of community and environmental outcomes.

“This new commitment builds on Cubbie’s historical voluntary environmental, stock and domestic water contributions.

“The particulars of the commitment have been developed with engagement from the relevant Commonwealth and Queensland authorities so that it will help meet their respective environmental water objectives. There is no compensation from the Commonwealth or Queensland governments for the voluntary contribution.”

Cubbie’s three properties are located near Dirranbandi and St George in South West

Queensland covering 93,700ha, including 22,100 hectares of irrigated cropping.

The last time Cubbie took water from the river system was in April 2017 when it drew

14GL, or about 9 per cent of the 156GL that passed through St George.

Cubbie Agriculture chief executive Paul Brimblecombe said: “Under Ruyi’s ownership Cubbie has demonstrated a practice of active management of critical flows to benefit the environment and downstream users, so it’s very pleasing to find a like-minded partner in MIRA.

“Together, we are excited to continue making a difference in the communities in which Cubbie operates, and to provide a meaningful contribution to support downstream users via this Voluntary Water Contribution.

“Since Ruyi acquired Cubbie Station in 2012 it has invested over $26 million to maintain and improve the efficiency of Cubbie’s operations, spent over $25 million acquiring and upgrading the Dirranbandi ginnery, and funded major low-season maintenance programs providing great support for the local community through the drought cycle.”

Ruyi Australia Group chief executive, Tony McKenna said: “MIRA is highly regarded internationally and has over a decade of experience in agriculture.

“Our joint venture provides certainty of ownership to Cubbie. Under the structure, the current management and operational team of Cubbie will remain unchanged and will be able to continue their good work.

All required regulatory approvals have been obtained, including Foreign Investment Review Board. Completion of the transaction is subject to certain conditions precedent. All other commercial terms remain confidential.