Loxon Winery Sale Falls Through
By Ian Neubauer
Australian Vintage announced on Friday (October 24) the scheduled sale of its Loxon Winery to an Indian buyer has been indefinitely delayed.
The company formerly known as McGuigan Simeon inked a deal in March to sell the 90,000-litre capacity winery in South Australia’s Riverland Region to Champagne Indage for $60 million.
But Champagne Indage — which presides over 32 wine labels and claims to have the largest wine production facility in India — has reportedly fallen victim to the global financial crisis and is facing a liquid capital shortfall.
It failed to deliver a $3 million deposit for Loxon last week and informed Australian Vintage it would not be able to complete the acquisition at this time. It said it remains committed to the deal but must first seek alternative funding.
The development comes as a hard blow to Australian Vintage, which last financial year braved a perfect storm of market conditions that included drought, unprecedented currency fluctuations and rising fuel and raw material costs to deliver a profit of $1.3 million.
Australian Vintage shares were trading at 65cents when trading commenced today (October 27) on the Australian Stock Exchange. They have followed a downward trajectory after reaching a six-month high of $1.82 in May.