Australian Vintage (AVG) has teamed up with Warakirri Asset Management (WAM) to sell and lease back some of its commercial vineyards for $62.5 million.
The binding agreement includes two vineyards in Coldridge in Loxton, South Australia and Grande Junction in Pomona, NSW and its associated water rights. Both vineyards produce a combined 23,000 tonnes of wine grapes per annum.
AVG CEO Craig Garvin said the deal will help provide a better use of funds and improve the company’s Return On Capital Employed (ROCE).
“This deal unlocks significant value from our balance sheet that allows us, in very challenging market conditions, to pay down debt, to continue to invest in our brands, and consider higher margin acquisition opportunities.”
AVG will continue to manage, operate and offtake from the vineyards while maximizing its yield output with WAM. The transaction also includes a 10 + 10 years lease term at market rate with AVG having the first right of refusal over assets.
Warakirri Asset Management is one of the largest agricultural fund managers in Australia.
- Further reading: Casella Family Brands sells 35 vineyards
