Nant and Australian Whisky Holdings terminate takeover deal

06 March, 2017 by

By Andy Young

The Nant Group and Australian Whisky Holdings (AWH) have terminated the deal which would have seen AWH takeover the Tasmanian distillery.

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AWH has bought the Nant Estate in Tasmania, but from there on the two sides disagree on the use of the Nant trading name and also the management of the Nant Barrel Holdings whisky barrel investment scheme.

In October last year AWH announced that it had entered into an agreement to buy the Nant Distillery business and the Nant Estate from the Nant Group for $3m in cash, plus the assumption of debts and liabilities, bringing the total amount to around $5.5m.

In December the takeover date was extended to the end of January 2017 and then in January the deadline was further extended to February. On 17 February AWH announced to the ASX that it had completed the Land Sale Agreement of the Nant Estate in Bothwell, Tasmania.

At the time, that statement said: "The LSA provides that [AWH] has the right to use and trade under the name Nant and that the Vendor of the property, Nant Estate Pty Ltd, its associates and related bodies will cease to use the name 'Nant'. Pursuant to the LSA [AWH] will continue to provide management services to Nant Estate Pty Ltd and Nant Barrel Holdings Pty Ltd in respect of the whiskey barrel investment fund operated by Nant Barrel Holdings Pty Ltd.”

However, last week the Nant Group said that it was terminating the agreement and that AWH had only purchased the land where the distillery is located.

"The Nant Group advises Australian Whisky Holdings Limited (AWH) has failed to secure the Nant Distillery business which principally comprise of the distillery plant and equipment, Nant trademarks, intellectual property and barrels. The Nant group continues to manage the Nant barrel management company and has terminated the barrel management agreement with AWH," the group said in a statement.

It added: "The Nant Group and AWH entered into the Transaction Implementation Agreement (TIA) on or about 13 October 2016 with the initial intention that the parties would satisfy completion of the conditions by 15 December 2016. The date for completion had been extended until the 22nd February at which point the Nant Group advised they could no longer accept the request for continual extensions sought by AWH and did not believe the sale conditions were in the best interest of the barrel owners, investors and the Nant Group at large.

"Australian Whisky Holdings Ltd has purchased the land only where the distillery is located. No other purchases or rights have been extended to Australian Whisky Holdings Ltd. Australian Whisky Holdings can only reference the name 'Nant' in relation to the Land’s name they purchased. The word 'Nant', 'Nant Whisky' are trademarked to the Nant Distillery business.

"The Nant group is currently securing a new Bond Store Facility and all plant and equipment and barrels will be moved to the new location shortly. An Audit of Barrels will shortly commence to ensure AWY correctly managed the assets whilst they had the management agreement in place. The assets and barrels will then be moved in accordance with Government excise regulations to an approved bond store. 

"The Nant group will commence producing the same registered trademarked products immediately and begin redemption of barrels from investors."

This however contradicts a statement to the ASX from AWH last week, in which it also announced that the Business Sale Agreement had been terminated.

At that point AWH said: “[AWH] has commenced its own licensed distillery operations on the historic Nant Estate, has been licensed to use and trade under the name Nant and continues to manage the whisky barrel investment scheme operated by NAW Barrel Holdings Pty Ltd (formerly named Nant Barrel Holdings Pty Ltd).”

In recent letter to its barrel investors, a copy of which has been obtained by TheShout, the Nant Group said that it has always been its “highest and most important priority” to secure 100 per cent guarantees from AWH for its barrel investors that “their investment is protected now and into the future”.

The letter added: “This has not been offered to date. It has been discussed, it has been vaguely mentioned in Agreements today, but it has not been a conclusion of the AWH offering to date. We believe this to be a very important issue.

“AWH is a publicly listed company that like any share holding company, it has an obligation to provide its shareholders the best company results. The Nant arrangement we entered with you, may not be as equal importance to AWH and the relationship they may have with you. Nant has therefore terminated the Sale of Nant Distiller business to AWH effective immediately and will be organising to relocate the distilling operation and barrels to a new ATO approved bonded warehouse.

“It is our intention to recommence the redemption of barrels and our bottling and dispatch operations.”

TheShout has contacted both AWH and the Nant Group for comment but neither party has so far responded.