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Logistics group Qube Holdings will invest $50 million in a joint venture with Hong-Kong based agricultural group Noble to build a new grain handling depot at NSW's Port Kembla.
The depot, which will be known as Quattro Grain, will export up to 1.3 million tonnes of grain annually.
Noble will use Qube Logistics' rail services to transport grain to Quattro Grain on a "take or pay" basis.
Grain traders Emerald and Cargill have also agreed to use Quattro Grain and Qube's rail services, and other grain groups are also welcome to use the depot, which is expected to start operating in early fiscal 2016.
"This is a significant strategic project which we believe will alter the dynamics of the tightly-controlled grain handling market," said Maurice James, Qube's managing director, adding it would diversify the company's earnings and create "significant" growth opportunities.
"The investment is consistent with Qube's strategy to invest in port infrastructure that aligns with Qube's operations."
Emerald and Cargill have been given call options to invest in Quattro Grain. If they take up the options, Qube and Noble's interest in the depot will drop to 30 percent each.
Qube's shares went into a trading halt early Thursday as it also announced plans to raise $200 million via a fully underwritten placement of ordinary shares to institutional investors to help fund Quattro Grain.
It may raise a further $30 million via a non-underwritten share purchase plan.
UBS and CBA Equities have been appointed joint lead managers.
Qube's shares closed at $2.23 on Wednesday.
This article first appeared on www.smh.com.au
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