Stowe away on sinking ship

THE Old Brewery, Perth's swish riverfront eatery built from the bones of the old Swan Brewery, doesn't sound like the sort of place the low-key Ric Stowe would frequent, even before his coal business, Griffin Coal, went spectacularly bust in January.

But the man who figuratively ran a coalmine into the ground amid a commodities boom would no doubt be happy to know the menu features a $69, 200-gram wagyu steak sourced from one of his highly prized cattle properties.

While $350 a kilo for prime beef sounds mouth watering, it is a mere entree for Stowe's cattle business, WR Carpenter Agriculture Pty Ltd (WRCA).

The company claims to have 50,000 cattle spread across one of Western Australia's largest private land holdings targeted at an Asian market which is developing a taste for Stowe's prime angus and wagyu beef.

Most of the herd runs up north of the state on the historic 275,000-hectare Minilya Station, while a string of properties north of Perth, covering 25,000 hectares, are used to fatten the cattle for slaughter. The company secured approval to set up a $10.5 million abattoir at one of these properties, Joanna Plains, in 2008 that was to be completed last year.

It was designed to churn out 3760 tonnes of beef a year. That's a fortune in rare steak that could help cushion the financial blow of losing the lucrative state government coalmining contract. It is that loss that proved to be the beginning of the end for Stowe's cash engine, Griffin Coal.

But in a sign of the harsh times befalling Stowe, parts of the cattle business are being pawned, and sold, to shore up what remains of his privately held empire.

Two weeks after administrator's were appointed to Griffin Coal, Dutch agriculture lender Rabobank and Stowe reached terms on a debt facility agreement with WRCA. Neither party would confirm any details of the loan but Rabobank was subsequently granted a $133 million secured charge over WRCA's assets but it comes at a cost.

Four properties from WRCA's cattle empire were released from Rabobank's secured charge a month ago. About the same time, WRCA put all its properties north of Perth up for sale, suggesting the properties have joined the huge selldown of assets needed to pay off Stowe's bankers.

The Joanna Plains property is among those for sale, along with with the unfinished carcass of the abattoir, which was discontinued last year in what was an early sign of trouble in the Stowe empire.

As the unfinished abattoir illustrates, Stowe's cattle business was still a work-in-progress that does not seem capable of paying off any significant debt based on the last available accounts for WRCA.

The financial report for the year to June 30, 2006, reported $13.8 million in revenue from continuing operations and a $6.2 million profit, but the latter was reliant on a $12 million gain from the sale of property.

The company, which reported a $1.2 million loss for the prior year, had non-current interest-bearing liabilities totalling more than $34 million at that time.

So, while it is the sale of Stowe's high-profile Bullsbrook property, complete with helipads, polo fields and horse stud, which is grabbing the headlines, it is the breakup of his cattle empire that will really hurt long term.

So far, only Minilya Station up north has been ring-fenced from the fire sale.

"All the properties are on the market at the moment," says Malcolm French from Elders Real Estate.

At about $1000 a croppable acre, the properties for sale could fetch about $60 million roughly matching the current asking price for Stowe's Bullsbrooke estate, which would be a record for an Australian home if it could be called that. And they are not the only properties Stowe is trying to offload.

A fire sale of Stowe assets started last year when he put his beachfront Bunker Bay property up for sale. Soon after, administrators were appointed to Griffin Coal and other companies with debts of about $1 billion.

Early this year Stowe sold a home in Perth's seafront suburb of Swanbourne for $7.85 million and put the Bullsbrook estate on the block. Commonwealth Bank took the Bullsbrook and Bunker Bay properties out of Stowe's hands with the appointment of receivers to recover $80 million it was owed.

Perth-based investment group Aspen has confirmed it is conducting due diligence on the City Square development site Stowe owns with WA developer Multiplex. The partners have development approval for a $250 million 24,000-square-metre office tower, but, it seems, no longer the appetite to build it.

The site has been the Perth CBD's most famous hole in the ground for decades and has proven to be a poisoned chalice for many of its previous owners, who include Alan Bond, Laurie Connell, Kerry Packer and Warren Anderson.

Anderson, who faces his own selldown of personal assets and prepares for divorce from his wife of 42 years, Cheryl, may have some sympathy for Stowe. He may be able to console himself with some philosophical words from his fellow West Australian now resident in Monaco. "It's whatever life hands out to you, isn't it?" Stowe said in a rare interview in March this year. "We're all big boys. We all have to ride with the crest and cop what goes on."