The future of the publicly-listed wine company Australian Vintage Limited (AVG) – whose brands include McGuigan, Nepenthe and Tempus Two – hangs in the balance as it attempts to raise almost $20 million through a share issue.
AVG says it is committed to the “continued disciplined execution” of its Strategic Plan, which has seen the business continue to win market share and global recognition.
“The Strategic Plan is positioning the business for long-term success through its focus on brands, premiumisation and innovation and a relentless focus on cost efficiency and pricing discipline, which is being complemented by diversification into new export markets, including South-East Asia,” a company statement says.
“AVG also remains focused on identifying transaction opportunities with the potential to unlock shareholder value.”
Australian Vintage was in merger talks with Accolade Wines but the latter pulled out.
The company went into a trading halt on Monday 27 May.
Acting CEO Peter Perrin says, “The current cycle is proving to be one of the most challenging on record for the Australian wine industry and this is reflected in our expected financial performance for FY24.
“In the face of these sectoral headwinds, we are growing market share in our key markets, introducing considered innovations and improving our underlying earnings performance.
“While there are encouraging signs that the oversupply of red grape varietals is easing, consistent with prior cycles, we expect the market will take time to rebalance, and trading conditions are likely to remain challenging in the interim.
“The capital structures initiatives announced today are designed to provide more adequate levels of liquidity and financial flexibility to navigate the volatile conditions and enable the business to capitalise on future opportunities, including potential consolidation.
“We are grateful for the support of shareholders and our financier NAB and are committed to the disciplined execution of our Strategic Plan.”
On behalf of the entire Board and Executive Committee, I would like to thank Richard for his dedication and service to the company over more than 15 years. He has made an invaluable contribution and will be missed.”
Richard Davis will retire as chair after nine years at the completion of the equity raising. John Davies will be appointed interim chair.
Australian Vintage CEO Craig Garvin was sacked in May for what the Board called “a lack of judgement”.
The company has just launched a new brand called CTZN, “Australia’s first AI-curated, human-crafted wine”.
“Each bottle represents a harmonious blend of AI selected grape varietals, curated by cutting-edge AI algorithms, and brought to life by skilled human winemakers at celebrated global drinks company Australian Vintage,” the website says.
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