Shareholders approve Cheviot Kirribilly vineyard sales
Shareholders of the ASX-listed Cheviot Kirribilly Vineyard Property Group have approved the sale of four of the six vineyards the indebted group put up for sale in July this year.
Subject to various other conditions being met, the two Langhorne Creek vineyards in South Australia –Birchmores Vineyard (293 hectares) and Woodstock Road Vineyard (67 hectares) – will be sold in late December for around $6.2 million.
The sale of the two Angas Creek Vineyards in the Adelaide Hills (78 and 65 hectares) is expected to be completed in January 2012 for around $2.6 million, taking the total $8.8 million.
Two vineyards in the Clare Valley – Kirribilly Estate Stage 1 (251 hectares) and Tullymore Vineyard (200 hectares) – continue to be marketed through Colliers agents Tim Altschwager and Nick Dean, with the group hoping to sell them by April 2012.
The vineyards continue to be maintained to ensure they are productive, with tentative agreements reached to sell the fruit to various wineries, the group says.
Subject to the Clare Valley wineries being sold and the group having the support of its financier, NAB, the Cheviot Kirribilly Vineyard Property Trust will be wound up by early May 2012
The Cheviot Kirribilly Group’s lending facilities are due to expire at the end of December
Cheviot Kirribilly was forced to put its 953-hectare vineyard portfolio up for sale by its financiers, though the group has praised NAB for its “forbearance”, which has allowed it to continue operating.
During an address to shareholders yesterday, chairman Sean Edwards said problems for the group began in 2010 when the group had to invest in capital equipment such as frost fans and desalination equipment at a time when there was a “significant weakening in district average weighted price at the end of the 2009 vintage”.
Between 2008 and 2011, the price per tonne earned for its grapes fell by 43%, resulting in a 59% decline in revenue.
This required the group to draw on additional working capital to farm the 2010 vintage resulting in an excessive build-up of debt.
A further headwind faced in 2010 was due to climate conditions which resulted in below average yields requiring further assistance from its bankers.
Cheviot was one of several vineyard owners forced to sell this year due to the deteriorating market conditions.