Farmers who own shares in Australia's Mackay Sugar have voted to accept a takeover offer from Germany's Nordzucker, helping secure the company's future against a backdrop of depressed world sugar prices.
The offer was approved by a 75% majority of Mackay's shareholders, they said in a statement on Monday.
Unlisted Nordzucker, Germany's second-largest sugar producer, said in February it had agreed an initial deal to buy a 70% stake in Mackay as part of its strategy to expand outside the depressed European market.
A Secure Future
The takeover will help to secure the future of Mackay Sugar, said Paul Schembri, chairman of the committee representing the shareholders, in a statement.
Nordzucker said in February it would contribute AUD60 million (€37.2 million) in equity capital for the stake, and will also give Mackay Sugar a loan of up to AUD60 million.
"Growers have shown the courage to back the deal in order to secure the future of their crop and stabilise the industry after several years of uncertainty," Schembri said.
'A Huge Relief'
"This will be a huge relief for growers who have been living with great uncertainty after several seasons of poor milling performance, with breakdowns and crops left in the paddock," he added.
"It will hopefully bring to a rapid and positive close the questions about the company’s overall financial viability after it laid bare its perilous financial situation in 2017.”
Two years ago corporate advisory firm Kidder Williams proposed assets sales and costs cuts after reviewing Mackay Sugar's capital requirements and capital structure.
The global sugar industry is battling against depressed prices. World sugar prices hit their lowest in 10 years in late 2018 amid heavy world oversupply and have this year only stabilised at low levels.
A Nordzucker spokesman said the company welcomed the vote, and hoped the deal will close soon after clarification of final details.
A Strategic Move
"This is an important part of our strategy to expand into the Asian sugar market," he said.
The Nordzucker takeover involves three Mackay factories producing around 700,000 tonnes of raw sugar annually for both the Australian market and export distribution.
Nordzucker said earlier it wants to expand production of sugar from cane, which can be profitable even at lower sugar prices because of better cost structures than sugar beet.