ADMINISTRATORS managing the disposal of the distressed Kimberley Meat Co beef processing and pastoral assets in Western Australia’s far north are hopeful of completing a sale – possibly within weeks.

Beef Central understands at least one active bid for the assets has been tabled, from an entity described as being backed by an Australian citizen of Chinese origin, but administrators at Korda Mentha were not prepared to confirm this, or share whether there were more bids in play. No would they offer a time line towards a possible sale.

A Western Australian state government license advice on matters to do with environmental management at the site has also been issued, providing greater certainty around the facility, Beef Central was told. Amendments were made to the plant’s liquid waste and compost management plans.

The administrators issued a brief statement on the license change:

“The conclusion of the investigation, and the amendments to the licence, provide certainty to both buyers and the community that these historical matters have been addressed.  Kimberley Meat Co remains a critical part of Northern Australia’s pastoral and beef processing infrastructure. The administrators are continuing to work with all stakeholders – governments, regulators, industry participants and creditors – to structure a transaction to carry the assets forward under the care of a suitably qualified new owner.”

On 17 May administrators Richard Tucker, Anthony Miskiewicz and David Osborne from KordaMentha closed expressions of interest in the Kimberley Meat Co plant near Broome in WA’s remote northwest, together with parent company Yeeda Pastoral’s two nearby grazing properties and a parcel of residential properties in the area.

Offers were being accepted for the whole, or pastoral and processing assets separately.

A source close to the sale process said at the time that ‘significant interest’ had been shown from both domestic and offshore inquiry in the processing facility, but he declined to offer a number about how many formal expressions had been received.

“Firstly, they know there is going to be a sale. There’s one thing that the administrators KordaMentha don’t want to do, and that is run a cattle and/or meat processing business,” the source said.

“Interested parties know there is an absolute obligation to sell. That does not necessarily mean it sells at a bargain basement price, it’s about creating market tension to get a fair price,” he said.

The administrators’ report suggested the companies were $103 million in debt at the time they entered voluntary administration, split roughly equally between secured and unsecured creditors. The largest was the Commonwealth Bank of Australia, owed $43.6 million.

What surprised some onlookers was how quickly the sale process unfolded. KordaMentha was only appointed administrator on 27 February, after Kimberley Meat Co went into voluntary administration. Its parent company Yeeda Pastoral Co and several associated companies followed two days later.

The entire process from appointment of administrators to closure of expressions of interest on the plant took just 80 days. A first administrator’s report released back in March suggested the sale process could take up to six months.

High expectations when built in 2016

The Kimberley Meat Co plant was built in 2016 by Merv Key and his partners including Yeeda founder Jack Burton.

In 2021, KMC’s owners attempted to create a cooperative designed to transfer ownership to local landholders. The WA state government apparently intended funding the local pastoralists into the deal, but allegedly pulled out at the final stage.

Daily production capacity at the plant is around 220 head, with an annual season around 40 weeks, accounting for around 45,000 head a year.

It’s understood the processing plant only operated briefly at a low output level earlier this year, and was closed for lengthy periods over the previous two years due to large numbers of cattle being relocated out of the Kimberley for restocking in other parts of Australia after drought.

KMC reopened briefly in April 2023, operating as a wholly-owned subsidiary of Yeeda Pastoral Co.

Merv Key sold his 45 percent stake in the plant, together with his share of parent company Yeeda Pastoral Co, to one of his existing partners, ADM Australia, in October last year.

The ADM group’s major shareholder is Hong Kong-based equity fund Asia Debt Management Capital (ADM Capital), which has agricultural investments worldwide, including irrigated tree cropping, stockfeed and commodities trading businesses in Australia. Yeeda and Kimberley Meat Co were ADM’s first investments in the Australian red meat supply chain, Beef Central was told at the time.

The balance of the KMC/Yeeda shareholding (20pc) is owned by another long-term investor, Fitzroy River Ltd, described as a family office based in the US and Argentina which has held a stake in Yeeda for the past ten years. Kimberley Meat Co preferred to keep its heavy foreign capital exposure discrete.

Pastoral assets cover 475,000ha

The administrators’ sale process also includes Yeeda Pastoral Co’s s two large nearby pastoral leases, Yeeda and Mt Jowlaenga stations outside Broome, the cattle and a number of residential assets in Derby and Broome.

The Yeeda pastoral aggregation covers 475,000ha of mostly leasehold country, with a current potential carrying capacity of 22,990 standard cattle units. The walk-in, walk-out sale will include around 13,800 head, counted in a partial muster in October last year.

Yeeda was the first station taken up in the Kimberley and is uniquely placed at the mouth of the Fitzroy River and Yeeda Creek, with extensive flood-out country producing high quality grazing suitable for breeding, growing and finishing cattle. There is scope to increase the potential carrying capacity with additional capital works, subject to approval, marketing agents said.

Yeeda and Mt Jowlaenga include several centre pivot sites, extensive seasonal surface water, 26 bores servicing 39 water points plus 13 permanent dams and water holes.

The properties have a conditionally registered 25-year HIR carbon project estimated at 288,000 ACCUs.