NZ Wine Co confirms Foley merger plan
The struggling New Zealand Wine Company (NZWC) has confirmed it plans to merge with American-owned Foley Family Wines New Zealand subject to shareholder and Overseas Investment Office approval.
It clinched the agreement in the nick of time as the firm had until tomorrow to bring in new capital to reduce its bank debts
In a statement to the NZX, the Marlborough-based winemaker said Foley Family Wines would take 80 per of its shares to satisfy NZWC's banker by cutting at least $5 million of debt.
Foley Family Wines, owned by American billionaire Bill Foley, owns several Marlborough wine labels, Wairarapa luxury lodge Wharekauhau and Martinborough's Te Kairanga Wines which he has made his New Zealand base. Foley owns several Californian wineries and one in Washington State.
NZWC owns Grove Mill and Sanctuary wine brands. The company has been in financial trouble for some time, posting a 2011 net loss of $3.17m and a $1.9m loss the previous year.
Last year, it made a deal with ANZ National Bank that it would improve the company's equity by June 30, 2012.
The bank said the Foley agreement meets that requirement.
NZWC shareholders will meet on August 14 to vote on the merger proposal. If that gets the greenlight, it will still need Overseas Investment Office approval.
An independent advisor's report, prepared by Simmons Corporate Finance, will be sent to shareholders next month.