THE value of South Australian wine processor Boar’s Rock’s Margaret River winery has taken a hit amid difficult industry conditions and pressure from its financier.
Boar’s Rock made impairment charges of $934,000 against the carrying value of its Margaret River winery, according to its annual report from June 30 2011, lodged with the Australian Securities and Investments Commission in February.
“The company’s results continued to be impacted by the general state of the wine industry and a continuing high Australian dollar,” the annual report said.
The company bought the Margaret River asset for an undisclosed sum in the wake of Evans & Tate’s slide into administration in 2007.
The business made a $4.6 million loss in the 2010-11 financial year and, according to the annual report, is in breach of its loan facility provisions with total liabilities of $58.9 million.
As well as the impairment to its WA asset, the South Australian based company sold down on its share in Project Wine, a grape processing business in SA that has former BRL Hardy chief executive Stephen Millar on its board.
Selling down that asset was one of two requirements the company’s bank set out in the wake of Boar’s Rock’s breach of its loan. One requirement was to sell its 829,999 shares in Project Wine at a value of $1 per share.
‘Change to company details’ lodged with ASIC on March 14 this year show 829,999 shares were sold by Boar’s Rock to Qiancheng Group, for what appeared on the record as $385,773 in ordinary shares and $5.50 in ‘ordinary p’ shares.
Boar’s Rock did not respond to requests for an interview on its financial position.
According to the annual report, Boar’s Rock was also required to seek an investor to invest, finance or acquire part or whole of the group in order to reduce or retire debt. Directors of Boar’s Rock appointed an external consultant to seek out potential investors.
The independent auditor’s report prepared by Deloitte in February 2012 was attached to Boar’s Rock’s annual report and also outlined the difficult financial position.
“The consolidated entity and the company incurred a net loss of $5,124,833 and $4,655,994 respectively during the year ended 30 June 2011,” it said. “As at June 30 2011 the consolidated entity’s and the company’s current liabilities also exceeded their current assets by $35,307,415 and $35,984,400 respectively.
“These conditions … indicate the existence of a material uncertainty that may cast significant doubt about the ability of the company and the consolidated entity to continue as going concerns and therefore, they may be unable to realise their assets and discharge their liabilities in the normal course of business.”