Australian Wine Holdings to raise $1.5m in placement

South Perth-based Australian Wine Holdings Ltd will raise $1.5 million through a placement managed by Resource Venture Capital Partners Pty Ltd, with the group also to advise on new opportunities, following the divestment of most of AWL's wine assets.

The full text of a company announcement is pasted below

The board of directors of Australian Wine Holdings Limited [ASX:AWL] is pleased to announce that Resource Venture Capital Partners Pty Ltd (RVCP) has been engaged under a mandate to assist with a placement of shares to raise $1.5 million and to provide advice in relation to repositioning of the Company and corporate advisory services in respect of new transactions.

In return for these services, the Company has agreed to allot and issue up to 70,000,000 shares in the capital of AWL to RVCP, of which 35,000,000 will be "Performance Shares" (issued on the terms outlined below), and a total of 100,000,000 options to acquire shares in AWL (each having an exercise price of 3.5 cents, an expiry date of 31 December 2011 and subject to certain vesting conditions).

The 35,000,000 Performance Shares will be issued to RVCP on completion of a placement of shares at an issue price of 1 cent each (with a 1 for 2 free option) to raise $1.5 million (Placement). 17.5 million of the Performance
Shares will automatically convert into fully paid ordinary shares on a 1 for 1 basis in the event the volume weighted average price of AWL's shares (as traded on ASX) over 10 consecutive trading days (10 Day VWAP) equals or
exceeds 3 cents. The other 17.5 million Performance Shares will automatically convert into fully paid ordinary shares on a 1 for 1 basis in the event the 10 Day VWAP equals or exceeds 4 cents. In both cases, the share price
milestone must be achieved on or before 30 June 2008 (otherwise the Performance Shares will automatically lapse).

The balance (35,000,000) of the fully paid ordinary shares that may be issued to RVCP are subject to satisfactory performance of RVCP's services under the corporate mandate.

The Placement will be completed in two stages, the first stage under the Company's existing 15% placement capacity and the second stage subject to shareholder approval.

RVCP will act as manager of the Placement and AWL has agreed to pay RVCP a management fee equal to $50,000 (inclusive of GST) on completion of the Placement.

The issue of shares and options to RVCP is subject to shareholder approval and the Company intends to convene a meeting of shareholders to seek this approval in the near future.