Global Wine Ventures Ltd, the shell company formerly behind the iconic Western Australian wine brand Xanadu Wines Ltd, has signed an agreement with Joval Pty Ltd, facilitating a corporate restructure and recapitalisation.
Victoria-based Joval, which owns wine group Casama Group Pty Ltd, will be entitled to 44.4 per cent of the expanded share capital once the should the deal proceed.
GVW signed an distribution agreement for its Cowrock Vineyards brand with a Casama subsidiary, independent wine distributor red+white fine wines, in August this year.
The deal will see GVW consolidate its existing shares on a one for 25 basis to 10.4 million shares, as well changing existing converting notes to 9.9 million post consolidation shares at 18 cents per share.
Jorval and its associated entities will convert $435,000 of decured debt into 4.35 million post consolidation shares at ten cents per share, with Norvest Corporate to convert its $225,000 secured debt into 2.25 million shares at the same price.
After this, Jorval and its associtated entities will subscribe $500,000 for 18 million post consolidation shares at 3 cents each, with third party investors doing the same with $200,000 for 5.4 million shares at 3 cents each.
Casama has agreed to transfer its 50 per cent ownership of the Cowrock brand to GWV and current board member Ken Richards will resign, to be replaced with Joval representative Theo Eversteyn under the memorandum of understanding.
However, the MOU is conditional on GWV being able to reach an agreement with its existing converting note holders for an early conversion, as well as having a maximum $500,000 net asset deficiency prior to any cash subscription, as well as due diligence and shareholder approval.
GWV managing director Sam Atkins said the deal gove the company the structure and networks needed to move forward with a renewed sales and marketing focus.
"Joval is the perfect partner to help build a sustainable business for the future," he said.
GWV sold the Xanadu Winery, its former namesake, to a subsidiary of the Rathbone family-associated RW Group late last year.
GWV shares closed unchanged at 5 cents in the wake of today's announcement.
