EXPLAINED: Mackay Sugar Nordzucker vote looms
STEPPING into the Mackay Sugar offices at Racecourse, one is immediately taken aback at the amount of history contained within one building.
Walls covered in oil paintings of imposing-looking sugar mills, enlarged photographs of eras long passed, old leather chairs and wood-panelled walls fill the rooms and offices of the dated brick building - some filled with workers, others left vacant for years.
"We prefer to spend our money on the mills," Mackay Sugar chief executive Mark Day says, after explaining the interior furniture had not been updated in 50 years.
The foyer, the epicentre of Mackay Sugar's corporate component, also emanates an overwhelming feeling of historical significance - not only for what has come and gone in the more than 140 years of the grower-owned company, but what is still around the corner.
On Monday, one of the most important events in the embattled company's history will take place when growers cast a vote on their livelihoods by considering a proposed takeover deal by German sugar giant Nordzucker.
Last year, Mackay Sugar was offered an investment lifeline from German sugar giant Nordzucker, which proposed a $120 million investment in the grower co-op.
Nordzucker has agreed to acquire 70 per cent of Australia's last remaining grower-owned sugar milling companies, which has faced significant financial woes in recent years.
For the deal to go ahead, more than 75 per cent of shareholders would have to vote in favour of the deal.
Subject to the shareholder vote, most conditions set out by Nordzucker have now been "satisfied", including the sale of Mossman Mill.
Mr Day summarised the gravity of Monday's vote in one sentence: "We just have to get this right".
He said this "critical time" in Mackay's history would determine the future of one of its biggest industries, an outcome that would have implications for generations to come.
"It's not just for the growers and the farm value and the workers here, it's the next generation," Mr Day said.
"The industry has been here for over 100 years and now we've got a decision to make - can we make the step to bring Nordzucker in, repair the factories and get it back to being a world-class competitive industry?
"I think the most important thing to consider is that it's not just ourselves we're making a decision for ... the people in Paget do a lot of work for us.
"The community depends on Mackay Sugar being successful. It's a $350 million revenue business, so it's really important to the economy."
Growers will cast a vote on their livelihoods at an Extraordinary General Meeting on Monday.
The meeting will be held at 5pm at the MECC.
At the EGM, there will be opportunity for a limited number of shareholders to ask questions or speak briefly in relation to the proposed transaction.
Due to the "critical" nature of the vote, the three Mackay Mills will continue harvesting on Monday.
The voting process
If you want to attend and vote at the EGM, you will need to register before the meeting when registration opens at 3pm.
Alternatively, you can hand in your proxy vote to Racecourse Mill, which will be open until 5pm on Saturday to receive the proxy vote.
If you do use the proxy vote, you can still attend the meeting but you do not need to register.
Shareholders can also vote at the meeting by registering, which will cancel their proxy vote and make their vote on the day count.
Those who do not want to attend the meeting but do want to vote will need to fill out and submit the proxy vote.
If you do intend to vote by proxy, all joint shareholders must sign at the bottom of the green and yellow forms, as appropriate.
Those needing help can contact company secretary Donna Rasmussen on 4953 8241.
What happens if shareholders vote 'Yes'?
If the vote is successful, the last remaining growers will need to agree to changing the cane supply payment formula from PRS to CCS - one of the conditions imposed under Nordzucker's acquisition.
If this occurs, Mr Day said Nordzucker would then take over 70 per cent of the company from August 1.
As of Thursday, 771 growers had backed the CCS change, leaving 45 outstanding.
"The board of Mackay Sugar, except for myself, will resign and we'll call for three (new) grower directors," he said.
"There will be two weeks to call for nominations. We will do some interviews. Then hopefully by about August 19 or 20 we will have three new directors."
Nordzucker and Mackay Sugar would then embark on a four-year capital works program to upgrade the factories.
Mr Day said the factories, in particular the boiler stations, were in need of a huge capital injection.
"We did a lot of work on the boilers at Racecourse last maintenance season and Farleigh and Marian need the same work," he said.
"Then throughout the factory, there's equipment at end of life that we need to replace."
What happens if shareholders do not back the proposal?
"Nordzucker is the lifeline of Mackay Sugar," Mr Day said.
"We don't have another option to put to growers."
Without another alternative, if shareholders do not vote in favour of the proposal, the Mackay Sugar Board would then be forced to turn to the banks to ask for continued financial support - which may or may not be given.
"If we don't get the deal up, we won't get the opportunity to do capital works and factory performance will deteriorate further and grower confidence will deteriorate," Mr Day said.