Palandri still asking the $52m question

PALANDRI Wines, viewed enviously by rival scheme promoters because of its ability to raise $110 million in the past three years from investors, may be losing its shine.

While Palandri is keeping quiet over how successful it has been in achieving its ambition to raise $52 million to drive its American business, industry sources suggest less than half of that has been raised in the crucial end-of-financial-year sale period.

Also undermining the group’s cash-flow is the withdrawal of the winery’s $5.95 million public offer document. Company secretary Neil Hackett said Palandri withdrew its prospectus last month and has handed back monies raised.

The company is now drawing up a new prospectus, which it hopes will be ready for the market by mid-August.

“There’s been a refund of application monies, so that is why we are issuing the new offering,” Mr Hackett said.

“We had a change in circumstances which led to the changes being necessary. It [withdrawing the prospectus] wasn’t imposed on us. The board decided to go out with a new, fresh offer.

“We could have issued a supplementary to the prospectus, but that can get very messy and convoluted.”

Mr Hackett denied the prospectus was withdrawn due to a lack of financial interest from investors, but could not specify to WA Business News what changes were required to the previous prospectus until the new one had been issued.

It is not the first time Palandri has gone back to the drawing board in its bid to raise the money for Margaret River Wine Production Limited.

The group, headed by Darrel Jarvis, was keen to use the money to expand the Palandri Margaret River Winery and fund capital works for the 60-hectare third-stage vineyard.

Instead, in March the managed scheme promoter was forced to withdraw the prospectus offer after the Australian Securities and Investments Commission raised concern with the absence of disclosure in relation to the use of funds raised if the offer was not fully subscribed.

In that instance the winemaker opted to issue a supplementary prospectus, which subsequently met ASIC approval.

Agribusiness Research managing director Shane Kelly believes that, while Palandri still had a long way to go to achieve the $52 million goal for its American business, the company should be relatively happy with the result, given the tight investor market.

He said $20 million was enough to get things moving in America.

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