New wine investment uncorked

Partners have given the green light to the establishment of a new $12 million wine company.

Thursday, August 17th 2000, 12:00AM

The new $12 million wine company proposed for the Awatere Valley has cleared its first hurdle by gaining approval from the partners in the two existing vineyard partnerships to form the new company, The Crossings (Marlborough) Limited.

Partners in Medway River and Brackenfield Estate Vineyard ratified, at a meeting yesterday, earlier resolutions authorising the sale of the two established vineyards to The Crossings in return for shares in the new company. The partners have agreed to exchange their current holding in the vineyard partnerships for discounted ordinary shares, convertible preference shares or a combination of the two in the new company.

"The partners have taken the opportunity to consolidate their current investment into a new venture at the value-added end of the wine industry," Farmers Mutual Group chief executive Michael Millar said.

"The strength of the support demonstrated by the partners is consistent with the strong interest, from this country and abroad, in investments in the New Zealand wine sector.

"By achieving the critical mass necessary The Crossings will be able to export almost all of its entire production.

"With New Zealand receiving international acclaim for its wine and export sales exceeding projections, this new venture will be able to build on an increasing demand for quality ‘new world’ wines. We have identified the United States, Canada, Europe and Japan as key target markets for the premium wines that will be produced by the new company."

By combining Medway, Brackenfield and a new 'greenfield' vineyard the Crossings will have a total of 345 acres of vines.

By 2005 when the third vineyard comes on-stream, the company expects to produce around 630,000 litres of premium wine which, with the possible exception of some direct sales to shareholders, will be exported.

To this end, the company has an exclusive agreement with leading Californian wine specialists, International Wine Associates, who will develop marketing and distribution arrangements for the company’s wine internationally.

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