Sugar mill co-op to sell off assets
THE NSW Sugar Milling Co-operative will sell off waterfront properties at Broadwater in order to reduce its debt levels.
The co-operative has just received approval from the Richmond Valley Council to subdivide land on the Pacific Highway at Broadwater into nine residential lots.
In addition, it will also divest itself of about 30 other properties, including houses, located near all of its three mill sites at Broadwater, Condong on the Tweed and Harwood near Maclean.
The houses were used to accommodate mill staff.
“It’s part of an ongoing divestment program,” co-operative chief executive Chris Connors said.
The restructure would see the co-operative sell off ‘non-core’ assets, he said.
Many of the properties are already under contract for sale, but Mr Connors would not reveal what price the assets were likely to return.
He said the sales would help the co-op return to solid financial ground.
“We hope to get the business into a situation in which it will be debt-free within 18 months,” he said.
The co-operative is also considering developing an industrial estate, possibly in partnership, at Broadwater on another parcel of land it owns.
It is also still seeking a sale of its failed biomass cogeneration plants at Broadwater and Condong.
Earlier this year, the co-operative received 26 expressions of interest from Australian and overseas investors to purchase the plants.
“There has been a fair bit of interest. It’s now mostly about getting them up to the right prices,” Mr Connors said.
The plants were a joint venture between the co-operative and the NSW Government-owned Sunshine Electricity.
Their sale is needed to repay loans used to pay for construction of the plants, which have proved to be a financial failure. It was hoped the plants, which began operating in 2008 and are fuelled by sugar cane trash, would become a profitable arm of the business.
However, the plants were hit by cost overruns and fuel shortages after it was discovered the cost of building afacility to process sugar cane trash before it could be used in the plant was more than four times what had been budgeted for.
Without the processing fac-ility the plants struggled to find suitable sources of fuel.
The crash of the Renewable Energy Certificate price also contributed to shortfalls in loan repayments.
The NSW Sugar Milling Co-operative will hold its annual general meeting on December 14 at the Ballina RSL Club auditorium at 9am.