Macquarie Infrastructure and Real Assets (MIRA) has acquired a 49% stake in one of Australia’s largest agricultural properties, after Chinese textile manufacturer Shangdong Ruyi was forced by the Australian government to sell down its interest.
In 2012, Shangdong Ruyi was originally required to wind down its 80% stake in the 93,700-hectare Cubbie Station within three years of purchasing it for A$240m (€146m).
In 2016, Australia’s current conservative government granted a three-year extension for Shangdong Ruyi to sell its holding down to 51% to an independent third party or third parties.
Australian businessman Roger Fletcher who holds the remaining 20% stake has agreed to sell his interest to MIRA.
MIRA, which is acquiring the asset for one of its agriculture funds, did not disclose the transaction price.
MIRA head of agriculture, Liz O’Leary, said: “Cubbie is one of Australia’s premiere agricultural assets and aligns with our investment thesis for long-term sustainable farming operations.
“MIRA has been an active investor in and manager of Australian farmland for more than 10 years, and we understand the responsibilities that we have to local communities and investors.
“Shandong Ruyi has a long-term track record of sustainable operation of Cubbie, and that is a commitment we share with them.”
Cubbie Agriculture, a subsidiary of Ruyi, will continue to operate Cubbie under a long-term operating agreement, with no change to the current on-property management and team.
As part of the deal, Cubbie is to contribute up to 10 gigalitres of water to a nearby river system in dry periods without compensation from the government, a joint statement from MIRA and Ruyi said.
Since Ruyi acquired Cubbie Station in 2012 it has invested more than A$26m to maintain and improve the efficiency of operations, said Cubbie Agriculture chief executive officer, Paul Brimblecombe.
Ruyi Australia group CEO Tony McKenna said: “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, including that of the Foreign Investment Review Board, have been obtained.
Located across Australia’s Murray-Darling food bowl area in Queensland, the Cubbie property can grow up to 250,000 bales of cotton in a good year, or alternatively, produce wheat, sunflowers barley, sorghum, chickpeas and corn.
Cubbie Station has been described as the largest irrigation property in the south hemisphere.