Palandri in turmoil as creditors move on wine group

27/02/2008 - 15:59


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Darrel Jarvis' 10 year attempt to build a global wine group is in jeopardy following Palandri Wine Group's decision to appoint voluntary administrators today after being pressed by a major creditor.

Darrel Jarvis' 10 year attempt to build a global wine group is in jeopardy following Palandri Wine Group's decision to appoint voluntary administrators today after being pressed by a major creditor.

Describing the business as a complex structure, the administrators propose to continue with this year's vintage - due in the next two weeks - in an attempt to retain value in the business which has an undislcosed level of creditors.

Mr Jarvis is understood to be returning from London where he has reportedly been seeking to raise funds for the group, whose complexity has baffled observers who have sought to understand the linkages between its financing, investment promotion, wine production and wine marketing segments.

It is understood that the Queensland Public Trustee, which represents around $16.7 million in debt, had pressed the directors to put the whole wine group into administration after successfully manoeuvring Palandri Finance Ltd into a similar position.

QPT represents investors owed almost $17 million by Palandri Finance which provided them with security and guarantee from Palandri Ltd, the overall holding company for the group.

One of the administrators appointed at 8pm last night, Deloitte's Gary Doran, said there was scant detail on the overall group at this early stage and the current focus was its operations, mainly in the South West.

Mr Doran confirmed financial institution Keybridge Capital was a significant creditor but could not provide details on what was owed to the group.

Mr Doran said the value of the group is very much dependent on continuing to maintain the core wine business, which was about to enter its peak activity period for grape picking.

"We are looking at the financial position of the group and the cash flows available from trading," he said.
"The most important thing we have focused on is the maintenance of the core business, that is how you maintain shareholder value."

The administration comes after a long delay in the West Perth-based group's plan to list on the Australian Securities Exchange, following its de-listing from the London Stock Exchange's Alternative Investment Market.
The other voluntary administrators are Neil Cussen and John Greig also from Deloitte.

The same voluntary administrators were appointed to Palandri Finance Pty Ltd on February 15 this year.
Palandri started life in the late 1990s as a tax-effective investment scheme which now falls into the Managed Investment Scheme category.

It was always different from other schemes in the sector, starting life by marrying wine production and wine marketing with the vineyard elements promoted by its rivals.



Below is the full announcement from Deloitte:
Neil Cussen, John Greig and Gary Doran from professional services firm Deloitte have been appointed as Voluntary Administrators of all the companies within the Palandri Wine Group (the Group). On the 15 February, the same Voluntary Administrators were appointed to Palandri Finance Pty Ltd.
The purpose of the appointment is to provide a moratorium period to assess the viability of the business, to evaluate and if possible complete the refinancing proposals the Palandri directors have been pursuing and in the alternative explore all the other restructuring options for the Group. .
The intention of the Voluntary Administrators is to continue the wine business, including commencing Vintage 2008 in the next week.
The Voluntary Administrators are in discussions with the secured creditors of the Group and believe that maximising the return to all stakeholders, very much depends on continuing the core wine business as a going concern, including completing Vintage 2008.
The Palandri Wine Group is a complex structure with many stakeholders including secured creditors, employees, trade suppliers, managed investment scheme investors, international distribution agents, customers and shareholders. The companies over which Messrs Cussen, Greig and Doran have been appointed are Palandri Ltd, Palandri Wine Production Limited, Palandri Wines Limited, Margaret River Wine Investments Limited and Palandri Management Limited.
The Voluntary Administrators will be assisted by experts from Deloitte's Wine Group and will report back to Creditors at the first meeting which will be held on 7th March 2008. Further details will be distributed to Creditors within the next 24 hours.


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