Xanadu Wines

Xanadu was originally a family winery established at the latter stages of the first wave of the Margaret River region’s initial wine industry development. In 1975 local doctor John Lagan and his family began clearing the ground for the first plantings in 1977 and Chateau Xanadu’s first wine – a 1981 Cabernet Sauvignon – was made by close friend, the late Bill Ullinger at his nearby Redgate winery. The winery established a good reputation for its product over the next two decades. The scale of Xanadu was also boosted late in this period to cash in growing domestic and foreign demand for Australian wine, especially from the increasingly well-known Margaret River area. This expansion was , in part, achieved through associated neighbouring vineyard plantings by tax-effective vehicles (managed investment schemes) which were owned by retail investors and established to supply grapes to the winery. In 1999, accountants and insolvency specialist Norgard Clohessy put together a $10 million funding deal to buy into the business and then conducted an $8.2 million capital raising at 35 cents a share and stock exchange listing in 2001. The Lagan family emerged with about $6 million and 30 per cent of the company, about half the cash component going to repay previous winery related debts. Between 1999 and 2004 Xanadu raised about $50 million to fund organic expansions and acquisitions such as the purchases in 2001 and 2002 the company for South Australian companies Norman Wines and Next Generation Wines, for a collective outlay of $4.48 million. But the wine boom on which most of this corporate action was predicated was unsustainable. Big export predictions, mostly involving Normans, fell well short and the company was forced to discount. Not only did the market turn against it. The damage bill for a winery fire in 2004 ran into millions and cost the company all its gold-medal-winning chardonnay. By 2005 it was forced to engage in a fire sale of assets. Even the Xanadu name went in the $26.16 million sell down to multi-millionaire chemical mogul and winery owner, Doug Rathbone. Xanadu’s corporate entity was renamed Global Wine Ventures.

Find more articles in our BNiQ search engine >>