Cotton processor and marketer Namoi Cotton (ASX: NAM) has settled a damaging dispute with its one-time business partner in the oilseed crushing sector, Cargill Australia.
Namoi told the ASDX that it has settled the dispute which was before the courts and sold its 15 per cent stake in the Cargill Oilseeds partnership and Cargill Processing limited to Cargill.
The company which operates a network of 12 cotton gins in Australia’s cotton growing regions, did not detail the terms of the settlement, except to say it would not affect the company’s results.
A year ago Namoi’s subsidiary Namcott Investments Pty Limited, filed a Federal Court application seeking access to documents and accounting information from Cargill Australia.
Te filing was in relation to “an ongoing commercial dispute” surrounding the financial performance of the Cargill Oilseeds Australia Partnership and Cargill Processing Limited.
The company said its action came after “numerous requests from Namcott to Cargill Australia Limited” for this information.
Earlier this month Cargill said in its FY20 half year financial accounts that resolving the dispute was a key priority for the company.
The company reported ginning volume of $436 million, down from $1.1 billion the year before because of the effects of water availability on the cotton crop.
EBITDA was $7.8 million, down from, $30 million in the previous corresponding half.
The company achieved a higher price per metric tonne on its cottonseed sales in the half, but also noted its result was impacted by a “timing variance in relation to cotton seed procurement and trading.”
Namoi Cotton also owns and operates under a Joint Venture agreement with Louis Dreyfus Commodities, known as Namoi Cotton Alliance (NCA), three warehouse facilities in Wee Waa, Warren and Goondiwindi.
Picture: Namoi Cotton
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