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Australian Namoi's JV with China Cotton put on hold

30
Dec '11
Australia's largest cotton ginning company Namoi Cotton Co-operative Ltd., has put on hold the deal it entered into a couple of months ago for a 50-50 joint venture with China National Cotton Group Corp (CNCGC), a China state cotton firm.

The joint venture, which was expected to help the Australian firm market its produce across the globe through 2012-2017, has been postponed as the two parties failed to agree on specific funding.

Namoi said the talks with CNCGC were productive but the planned joint venture operations were so complex that the time frame was not enough to reach an agreement on all aspects of the joint venture.

The Cooperative said it will continue to discuss with Chinese businesses to form a strategic alliance for next season.

Jeremy Callachor, Namoi's Chief Executive informed that an independent valuer m3 property has considerably revised the value of the company from the current book value of AUD 80 million to AUD 185 million.

He said the valuation had taken into account the rise in ginning capacity, the increase in ginning prices and improved water conditions due to rise in storage levels in dams after the previous year's floods in Queensland and western NSW. All these have improved cotton growing conditions, he added.

Namoi had reported an operating loss of AUD 56 million during the six months ended August 31, 2011, which it attributed to unparalleled volatility in cotton prices and increased cost of borrowings.

Fibre2fashion News Desk - India


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