Agribusiness - Viticulture

Background

• Further review following introduction in 2007 of a previous turnaround strategy
• One of the top 20 wine companies in Australia, 30,000 tonne winery, 40ml storage capacity, 1,112 hectares of fully producing vineyards
• Previously undertook a major viability & strategic review on behalf of secured creditor
• Initial loss of $6.7m in 2006 and $14.9m in 2007, turnaround profit $2m ytd. 2010
• Sales doubling in last year to $95m.

Action – achievements to date

Management team installed with independent authority to manage:

• Sales doubling to $95m, profitability restoring
• Strengthened relationship with major customer and strategic partnering initiatives
• Improved packaging efficiency and cost reduction

Issues remaining unresolved:

• Cultural change, family ownership transition
• Difficulties in Management team implementing actions

Result

• Review requested by Management team and supported by owners to progress turnaround strategy

Background

Public company involved in wine industry, undertook a major viability & strategic review on behalf of secured creditor

Action

Implemented operational restructuring strategies:

• Adherence to industry KPI’s
  • Strengthening of senior management and streamlining of Board including appointment of Managing Director
  • Increased resources to internal sales and marketing, enhanced focus on bottled products
  • Review of cost reduction strategies
  • Divestment of non-core assets

Continued monitoring role with ongoing updating discussions with secured creditors

Conducted due diligence on acquisition target

Facilitated successful standstill agreements

Result

Consequent on the review we introduced & subsequently monitored management changes ,which facilitated repayment in full of 2 major creditors ($60m in total)

Background

5, 000 tonne winery facility operating in Langhorne Creek

Bulk wine stock

Brands and labels

Issues

Management/staffing Risks

Inadequate Director/management strategies

Result

Review requested by Management team and supported by owners to progress turnaround strategy

Legal status and control of winery

Asset sale in Receivership achieved within extremely short time frame

Background

Dry grown vineyard located in Clare winegrowing region, 45 hectares

Action

Undertook evaluation of quality, status and marketability of offering.

Issues arose:

•   Evaluation and alternatives explored re water licence, bore quality
•   Facilitated ongoing maintenance and positioning for sale
•   Collapse of existing sale contract
•   Evaluated land sub-division
•   Utilised industry connections to secure grape sale contracts
•   Cost effective maintenance program operated over several harvests

Result

Property repositioned for sale and successfully sold at auction