Wine companies to merge
The struggling New Zealand Wine Company has confirmed it plans to merge with American-owned Foley Family Wines New Zealand subject to shareholder and Overseas Investment Office approval.
It signed its agreement in the nick of time; it had until tomorrow to bring in new capital to reduce its bank debts
In a statement to the NZX, Marlborough-based winemaker the New Zealand Wine Company (NZWC) 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 says the agreement meets its requirements.
Its 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.
- © Fairfax NZ News
Should we limit the number of dairy farms in NZ?Related story: Dairy farming harming water