NZ Wine Co confirms Foley merger plan

MICHAEL BERRY
Last updated 10:52 29/06/2012

Relevant offers

National Farm

Wallaby problem spreading in South Canterbury Primary sector cash for more jobs and hi-tech help Landowners urged to move away from radiata pine Do better on milk price info, Fonterra told Sheep and beef farmers urged to think about environment Perendale farmers gather for annual conference Waihao Downs scheme ahead of schedule Chinese dairy giant Bright Dairy's Pure Canterbury infant formula powder sales behind targets Stratford District Council buys farm adjourning the one it already owns Despite low payout, Matamata farms are still selling quickly

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.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content