BARRINGTON Estate, owner of Margaret River’s Hayshed Hill winery, has moved to dispel speculation about the national wine group’s financial health in the wake of last year’s failed merger attempt with the ailing Hotham Wines.
Sydney-based Barrington ended a buying splurge late last year when it could not get approval from major shareholders for the Hotham deal, a change of heart which cast doubt on the group’s financial strength as it headed into the 2002 vintage.
But Barrington investor and acting managing director Leo Seward said negotiations last week had removed the impasse created by a dispute between major shareholders, which had checked the company’s growth strategy.
Mr Seward said the warring factions, former managing director and 40 per cent stakeholder Gary Blom, who was at odds with two other shareholders representing about 50 per cent of the equity, had reached an agreement on a number of things. Included among these were funding, management and the need for a restructuring of ownership.
“During the shareholders’ dispute period we were severely hampered by a lack of availability of funds,” he said.
“We have now resolved that.
“We have received additional funding.”
Mr Seward said the funding would see the group through the forthcoming vintage while the company was rearranged in the next few months, possibly with new equity.
“Effectively the shareholders will part ways in one form or another, but that has not been worked out yet,” he said.
A new managing director has been appointed and will be named during the next week or so.
Mr Seward, a former real estate executive and a passive investor in Fermoy Estate before its sale to offshore interests, joined the group when it bought Hayshed Hill about a year ago, its first foray into the WA region.
At 300 tonnes capacity, Hayshed Hill is only a small part of the group’s 2500-tonne output over four wineries in as many States.
However, Mr Seward said last year’s acquisition of Hazelgrove, with a 4000-tonne facility in South Australia’s McLaren Vale region, gives the group significant extra production scale if it can find the right level of sales.
