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Evans & Tate signs restructuring agreement

Troubled Australian winery Evans & Tate (ETW) has finally made a decision regarding its future after rejecting several bids from the Yarraman Winery and Ferngrove Vineyards.

ETW has agreed a restructuring deal with Pendulum Capital (part owned by Peter Fogarty), McWilliams Wines and the Australia and New Zealand Banking Group (ANZ) – ETW’s major creditor.

The terms of the agreement differ from those of the rescue package offered in June, with the financial institutions taking 48% of the company’s equity instead of 62% as originally suggested. Following completion of the deal (set for the end of October), McWilliams will hold around 25% while the remaining equity will be split among the company’s existing shareholders.

ANZ has converted A$50 million of debt and interest into fully paid ordinary shares at a conversion price of 8 cents per share and has agreed to waive the proposed fee of A$2.25m for introducing a co-investor to the company. ANZ has also written off interest and other fees owed to it, valued at around A$12m. Once completed, this deal will significantly improve ETW’s balance sheet by eliminating A$112m of debt as well as injecting new cash of around A$21.6m.

The deal will also see McWilliams act as a global distributor for the E&T Reserve and Margaret River-branded products, E&T Classic, Gnangara and X&Y ranges.

© Fionnuala Synnott, db 8 August 2007

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