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Vine dream withers

VITICULTURAL Asset Management has received another setback to its dream of developing a vineyard in Manjimup after failing in a bid to raise almost $20 million.

It is the second time the company, controlled by Mike Calneggia, has failed to get backing to develop the planned 290-hectare Gnangara Vineyard Project.

Mr Calneggia had earlier tried to secure investor support for the project, which was packaged as a property trust.

When this failed, the developer revamped the project as a managed investment scheme because of the tax incentives.

Now, $200,000 out of pocket in marketing and prospectus costs, VAM has decided to revise its plan again.

Mr Calneggia told WA Business News he now was seeking $2.5 million to fund a scaled-down, 100ha version of the project, which will be completed in stages.

“We have scaled the costs down and have removed some of the bells and whistles,” Mr Calneggia said.

He said some of the plans would be stalled and built over a longer time frame, such as a dam and accommodation.

“We made the conscious decision because the amount of money out there for this kind of project is under pressure. We felt that we were basically going up-hill with it,” Mr Calneggia said.

“There seems to be an absolute aversion to managed tax investment schemes.”

Another reason behind the failure, according to Mr Calneggia, was that VAM was not in a position to be able to fund or organise 100 per cent finance for the project.

Thi put it at odds with some of the other project offerings available.

Mr Calneggia admits that the real problem may be a lack of experience in raising funds.

He said the project was still sound with real contracts already in place to supply grapes to Evans and Tate Ltd and Howard Park Wines.

“We are in the business of growing grapes, we are not in the business of financial planning,” Mr Calneggia said.

“I guess what we have to do is get better at it (raising finance).

“We are disappointed with the outcome.

“Nevertheless we remain fully committed to the project and we will now pursue more traditional funding options to develop the Gnangara vineyard.

“It would have been financially irresponsible for us to attempt to continue raising funds for the project under the proposed structure when it’s clearly obvious that investor confidence is not strong.”

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