CBH and Glencore Seek to Sell Stakes in Newcastle Agri Terminal

Both CBH and Glencore are reportedly seeking to sell stakes in Australia’s Newcastle Agri Terminal (NAT).

CBH, which owns an 18.9% stake, has decided to pursue the sale of its stake in NAT after reaching the decision to shelve its plans to establish a sister grain co-operative in the eastern states of the country, while Glencore, which owns 32.5% of the terminal, has decided to divest its share as part of its plan to sell US$2 billion worth of assets to reduce its global debt load of US$30 billion.

The West Australian reports that CBH announced it had “decided not to pursue the development of a country network of receival points to feed grain into NAT and is currently reviewing how to optimize value from this investment”, in last year’s annual report.

An estimated $70 million has been invested into NAT, which has a storage capacity of 60,000 tons and rail access, with CBH investing $13.1 million since becoming a foundation investor along with Olam and Glencore.

A remaining share-holder, Mitsubishi-controlled Agrex, has opted to not acquire the shares of CBH or Glencore. Mitsubishi shocked the wider industry in July 2014 when it agreed to acquire Olam Grain Australia (OGA) for $68 million - OGA’s investment in NAT has been valued at approximately $23 million, and aside from its interest in the terminal, OGA controls a relatively small grain origination team.

The sale of these stakes is expected to gain widespread interest from grain traders seeking a foothold in port infrastructure in the country, but as potential buyers are regrouping from significant losses across their Australian grain trading operations over the past year, industry insiders are now valuing the stakes in NAT lower on the open market.

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