29/11/2012 - 15:29

Chinese buy wine assets from Wavenet

29/11/2012 - 15:29

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Chinese buy wine assets from Wavenet

Horticulture is proving the latest attraction for Chinese investors, with a major Donnybrook vineyard that was at the heart of one of the state’s most expensive tax-driven financial disasters becoming the latest target of foreign buyers.

Listed technology-company-turned-minerals-explorer Wavenet International has announced that it has sold a 30 per cent stake in the Preston Vale Vineyard to LSG Resources Pty Ltd, a company whose ownership is dominated by Chinese residents and which is its third biggest shareholder. 

The sale price was more than $4.6 million in staged payments over the next 19 months.

That deal follows last month’s move by a group of six wealthy Chinese investors to buy the assets of failed Kailis Organic Olive Groves more for than $15 million.

Earlier in the month the state government signed an agreement with a Chinese-owned firm to expand the Ord River irrigation project with a proposed sugar development.

It has also been reported that a Chinese conglomerate has bought broadacre farmland in the state's south with plans to export grain out of its own facility at Albany. It is believed that project would use port facilities set aside for the woodchip exports expected from the development of tax-driven tree schemes, many of which have also failed to deliver on expectations.

Both vineyards and olive groves underwent frenetic expansion in the 1990s and very early 2000s, largely on the back of tax incentives which were marketed as Managed Investment Schemes are raised hundreds of millions of dollars.

Preston Vale was at the tail end of that period, raising more $40 million from investors to create one of the biggest vineyards in the state, and most expensive per hectare, in a region that was not particularly well known for wine.

The scheme collapsed and vineyard has gone through a number of hands, including Tuart Resources which purchased the horticultural assets soon after listing as a junior explorer. It failed within 18 months.

It is not entirely clear what ownership journey was taken in the past decade or so by the vineyard, part of a 500-hectare property, but by last year it had ended up in the hands of Wavenet’s chairman Mick Stroud and Sharon Creasy, who shares an address with mining investment guru Mark Creasy. Ms Creasy controls Wavenet’s second biggest shareholder Pindan Investments Pty Ltd.

Last year, Wavenet bought Ms Creasy’s 50 per cent stake in Old Valley Pty Ltd which appears to have been the holding company for the Preston Vale Vineyard. The valuation of the deal was more than $6 million, being about $4.5 million in cash and more than $1.5 million in shares which appear to have been acquired by Pindan Investments.

At the time of the purchase Wavenet made much of the potential. It said that the property had a recent market valuation of $8 million and sworn valuations as high as $17.5 million.

In this year’s annual report it said the vineyard produced more than $1.5 million in wine stock from the recent vintage.

It is part of that stake which was sold to the Chinese investors. That deal values the whole vineyard at $15.5 million, representing a $1.7 million profit for Wavenet on the asset.

Aside from the remaining 20 per cent stake in the vineyard, Wavenet’s main interests are a mining portfolio comprises four granted tenements and six tenement applications situated in highly prospective Bowen, Hillsborough, Surat and Eromanga coal basins of Queensland.

In addition the company has recently acquired a polymetallic project at Putussibau in West Kalimantan, Indonesia. These tenements are located within a region that contains copper and lead occurrences and historic as well as current artisanal gold workings. Wavenet said it intends to continue to explore its coal and mineral tenements with the aim of identifying sufficient mineralization to support the developing of a mine.

The company also has a stake in Carabella Resources worth about $4 million at current prices.

 

 

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