CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River.CHINESE real estate giant Shanghai Zhongfu is in discussions with one of Australia’s largest cattle producers Consolidated Pastoral Company (CPC) to take over a major leasehold in the Ord River area, intending to expand cane production.
Nanjing Night Net

All pastoral leases in Western Australia are due to expire in June this year creating a frenzy of new deals and renewals.

In 2012, Shanghai Zhongfu, trading as Kimberley Agricultural Investments, was controversially awarded a prized 50-year development lease in the east Kimberley on the Ord scheme’s second-stage expansion.

The company, which employed former prime minister Bob Hawke as its Australian lobbyist, is developing 15,200 hectares of the Ord West Bank into canefields and wants to build a sugar mill near Kununurra. It needs more land and canefields to make the mill viable.

CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River called Mantinea Plain.

“We have had discussions with various operators about developing northern [Western] Australia including the Ord,” Mr Setter said.

“We have not done a deal yet with [Kimberley Agricultural Investments] but they are our neighbours and we are always in discussions with them.”

The Western Australian government is tendering out the grazing lease of Mantinea Plain for major development. Consolidated Pastoral will be wanting to a deal with the winner of the tender to maintain its cattle herd on that property.

Mr Setter denied that CPC and Shanghai Zhongfu were working on a more substantial deal including the sale of the cattle company’s freehold property Carlton Hill or other parts of the business.

Barclays Capital is advising London-based private equity group Terra Firma on its ownership of the CPC business and certain approaches that have been made to buy it.

Barclays has previously advised on multiple sugar-related business transactions in Australia including Mitr Phol’s Maryborough Sugar Factory purchase. Since confirming that advisers had been appointed, Consolidated Pastoral contracted to buy the much-heralded Bunda Station of the Victoria River District, Northern Territory for about $15 million.

The 178,800-hectare station owned by the Underwood family sits adjacent to CPC’s Kirkimbie Station on the Western Australia border. That sale is yet to settle.

The $700 million Consolidated Pastoral, which in March had about $418 million in equity, controls 19 properties across Australia’s top end, covering more than 5.6 million hectares.

The company’s leasehold properties have slipped in value from $311 million to $295 million, according to accounts filed with the corporate regulator.

Freehold land value was unchanged at $93 million.

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