Sucrogen deal back on

IT'S been a tense couple of weeks since Proserpine's sugar mill was placed into voluntary administration, but a decision for its future has now been made. Just moments before going to press yesterday afternoon the Whitsunday Times was advised Sucrogen had entered into an agreement with the administrators KordaMentha to purchase the assets of the mill. The sale will be subject to approval at a creditors meeting to be held on or before December 12.

Sucrogen CEO Ian Glasson said he understood the announcement, made at a first creditors meeting yesterday was met with "overwhelming applause".

"The good news this time is because it's in administration just the creditors need to approve it and that is on the basis of 50 per cent (not 75 per cent), so it's a simple majority not a super majority (we need)," Mr Glasson said.

Mr Glasson said the agreement was effectively "equivalent to our offer before". 

"The current agreement comprises a headline price of $120 million, plus a working capital adjustment, normal settlement adjustments, as well as provisions whereby Sucrogen will absorb all of the mill's normal operating costs and certain critical capital expenditure incurred from 31 October 2011 until completion of the transaction," he said.

Mr Glasson said should the agreement be approved by creditors, he hoped to have the transaction completed by December 31. 

Administrators KordaMentha were not available for comment but the mill's chairman Lou Raiteri said he had personally breathed a sigh of relief.

"We've had no part in this - in fact I only met the main administrator half an hour ago (but) so far as we're concerned, as a mill, we're quite pleased to go ahead with it. Otherwise it could have gone on and on with no conclusion," Mr Raiteri said.

"When you're chewing up $2million a month without interest you don't need to go for too long before you've chewed up all your distribution (to members)," he said.

"There's a magic crop in the making this year and we need a factory to process it. It'd be nice to get something finalised for members before Christmas."  

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