UPDATED: GRAINCORP'S flour and baking subsidiary, Allied Mills has come to the rescue of liquidated specialist starch processor Grain Products Australia (GPA) at Tamworth in North West NSW.
But at least two thirds of the workforce will be left without jobs following the sale which is set to be finalised later this month.
The long-established plant, which went into receivership threatening the jobs of all 68 workers late last year, closed its starch facility in December but kept operating its caramels and dextrose processing lines while a new owner or financial supporter was sought.
Only 20 positions are now expected to remain at GPA, at this point, leaving up to 48 employees seeking new work.
Partner with receivers McGrathNichol Murray Smith said the asset purchase price had not yet been disclosed but the sale would enable a substantial payment to be made to the secured creditor and was anticipated to cover most employee entitlements.
He said Allied Mills had made approximately 20 job offers at this time and therefore other employees had been given termination notices from the receivers.
"Some terminating employees will work through their notice period until the sale to Allied completes," Mr Smith said.
"Others will not be required to work during their notice period."
The GPA factory in the heart of Tamworth has operated on the site since 1938 and recently underwent an $11 million upgrade following a management buyout separated it from starch producer Penfords Australia in 2009.
The plant pioneered world-leading wheat gluten separation techniques in the 1930s.
GPA's recently upgraded operations were to meet strong demand for modified starches from Japan but the business was caught by a big jump in wheat prices last spring, compounding a 75pc increase in power costs in the past three years and the carbon tax.
GPA already has a close relationship with Allied Mills, which owns the long-established (former Fielders) flour mill in Belmore Street.
Allied, Australia's biggest flour miller, is a 60-40 joint venture between GrainCorp and US-based agricultural commodity trader and processor Cargill.
It has milling operations Australia-wide as well as bakeries in Queensland and Victoria supplying par-baked products to the a wide range of retailers.
The GPA purchase agreement follows a competitive bidding process for the Tamworth plant.
"This is a very pleasing result reached in a relatively short period of time and paves the way for GPA - a business vital to Tamworth - to continue operating, and to preserve as many jobs as possible," Murray Smith said.
"The patience of GPA employees, customers and suppliers while we conducted an urgent appraisal of the business, stabilised it and prepared it for sale is greatly appreciated."
Member for New England Tony Windsor said GPA's sale to Allied Mills was an excellent result.
"The continued operation of one of our largest employers is also great news for local people and the wider region.
"While this has been a troubling time for the plant's workers, I'm pleased that the uncertainty is now over and the plant has been saved."