Why state cash is vital to keep Mackay Sugar deal alive
UPDATE 1:15PM: MACKAY Sugar Limited has revealed its deal with Nordzucker could have fallen through without today's multimillion-dollar pledge from the State Government.
Deputy Premier Jackie Trad said $14 million was earmarked to support the debt-ridden company, which operates Farleigh, Marian and Racecourse mills.
Mackay Sugar Limited executive chairman and CEO Mark Day said the funding was one of the key conditions of the Nordzucker deal.
He revealed just how important the commitment from the State Government was at this morning's announcement at Racecourse Mill.
"It quite possibly could have fallen through, it would have made the whole structure of the deal difficult. The funding was critical," Mr Day said.
"We needed commitment from a number of parties including our banks, the growers and the government. The government funding was significant to the agreement.
"It will help with capital investment into the factories, to improve their condition."
Ms Trad denied the suggestion the State Government should have put the money up sooner.
"Almost every single day we have requests for assistance and the government does its due diligence," she said.
"We went through the process, looked at all of the financials and had a discussion with Mackay Sugar and Nordzucker.
"We are very confident this deal will deliver jobs and security to the region and we are pleased and proud to make this investment in Mackay."
The $14 million in funding will be used as per the arrangement between Nordzucker and Mackay Sugar.
Ms Trad confirmed the funding was about ensuring that the deal "comes off and that all conditions are met."
INITIAL: THE State Government has pledged $14 million to support Mackay Sugar.
This morning at Racecourse Mill, Deputy Premier Jackie Trad announced the funding would go towards securing an international investor in Mackay Sugar.
Ms Trad said the support package would underpin a proposed $120 million investment in Mackay Sugar by German sugar giant Nordzucker.
In October 2018, it was announced that Mackay Sugar had received a proposal from Nordzucker to acquire 70 per cent equity in the company.
For the deal to go ahead, it is understood more than 75 per cent of shareholders would have to vote in favour of the deal.
Mackay Sugar Limited executive chairman and CEO Mark Day said the State Government investment would be welcomed by growers and mill workers in the Mackay community.
He said the $14million state investment combined with the agreement with Nordzucker would set up the region's industry "for decades ahead".
More to come.