Margaret River-based Palandri Group’s financial wing aims to raise up to $15 million through a notes issue to retire debt to its principal financiers, including Maple Commercial Finance, with which Palandri has $11 million worth of debt facilities.
West Perth’s Palandri Finance Ltd will issue 120,000 convertible notes at $100 each to raise the money, with Bentleys MRI acting as auditors to the deal.
The notes have a coupon rate of 9.75 per cent per annum. Note holders will replace Maple as the first mortgage holders over the Palandri Winery, the Palandri Reserve Vineyard and the Frankland River Vineyard 2.
The prospectus states that Palandri Finance raised $12 million through a notes issue last year.
It is also stated in the prospectus that the proceeds of the offer may be used to repay in part or full loans from Palandri Finance chairman Darrel Jarvis, who is also CEO of Palandri Ltd, the group’s holding entity which listed on the London Stock Exchange’s Alternative Investment Market.
Mr Jarvis is currently owed more than $1.9 million by Palandri Ltd.
Earlier this year, Mr Jarvis advanced loans of $760,000 to Palandri Ltd, adding to $1 million in convertible notes and a loan of $500,000.
That debt to Mr Jarvis was reduced from almost $2.3 million by a $350,000 repayment from the company in June.
According to documents released to the AIM exchange, repayment of at least $1 million owed to Mr Jarvis is due on October 1 2006, with the balance repayable on demand.