The ownership structure of Cubbie Station is set to change after Macquarie Agriculture, an agricultural fund managed by Macquarie Infrastructure and Real Assets, bought out other third party investors.
Shandong Ruyi and Macquarie Agriculture announced their joint ownership agreement of Cubbie Station and associated assets, including its cotton gin, on Friday morning.
Macquarie Agriculture will acquire a 49 per cent stake in Cubbie, with Ruyi to retain 51pc.
Cubbie Agriculture, a subsidiary of Ruyi, will continue to operate Cubbie under a long-term operating agreement, with no change to the current on-property management and team.
The agreement provides certainty for the communities of Dirranbandi, St George and the surrounding districts.
It also provides a stable and long-term ownership structure, providing continuity of employment for Cubbie's 42 employees.
The deal brings together two experienced agricultural investors and operators and it is anticipated this combined expertise will build on the operational and sustainability initiatives that have already been undertaken on farm.
As part of the joint ownership agreement, Macquarie Agriculture and Ruyi have entered into a binding commitment to voluntarily contribute water to the Culgoa River and Lower Balonne intersecting streams (Lower Balonne) when it is most needed.
In what is regarded as a major victory for the Murray-Darling Basin, the commitment includes a voluntary contribution of up to 10GL to the Lower Balonne over a five-day period following extended dry periods.
Put simply, in a low-flow event Cubbie Station will forgo its water extraction by 50pc with a cap of 10GL, and 25pc during a medium flow event with a cap of 5GL.
This will increase the volume of water in the river at critical times and help deliver a range of community and environmental outcomes.
This new commitment builds on Cubbie's history of voluntary environmental, stock and domestic water contributions.
The particulars of the commitment have been developed with engagement from the relevant Commonwealth and Queensland authorities to help meet their respective environmental water objectives.
There is no compensation from the Commonwealth or Queensland governments for the voluntary contribution.
Cubbie Station is committed to making the voluntary water contribution an enduring commitment.
Macquarie Infrastructure and Real Assets head of agriculture Liz O'Leary said Cubbie is one of Australia's premiere agricultural assets and aligns with our investment thesis for long-term sustainable farming operations.
"MIRA has been an active investor in and manager of Australian farmland for more than 10 years and we understand the responsibilities that we have to local communities and investors," she said.
"Shandong Ruyi has a long-term track record of sustainable operation of Cubbie and that is a commitment we share with them.
"The voluntary water contribution that we have announced today is a meaningful commitment that will increase the volume of water in the Culgoa River and Lower Balonne intersecting streams, at the most critical times.
"It is also an example of the private and public sectors engaging with one another to develop new ways of helping to meet environmental objectives, while enabling productive use of the land at times of high flows."
Cubbie Agriculture chief executive officer Paul Brimblecombe said under Ruyi's ownership Cubbie has demonstrated a practice of active management of critical flows to benefit the environment and downstream users, so it's very pleasing to find a like minded partner in MIRA.
"Together, we are excited to continue making a difference in the communities in which Cubbie operates, and to provide a meaningful contribution to support downstream users via this voluntary water contribution," Mr Brimblecombe said.
"Since Ruyi acquired Cubbie Station in 2012 it has invested over $26 million to maintain and improve the efficiency of Cubbie's operations, spent over $25 million acquiring and upgrading the Dirranbandi ginnery, and funded major low-season maintenance programs providing great support for the local community through the drought cycle."
All required regulatory approvals have been obtained, including from the Foreign Investment Review Board.