Administrators of the 143-year-old McWilliam’s Wines Group put its extensive portfolio of wineries, vineyards and local brands up for sale as they seek funds to repay creditors owed over $34 million and secure a white knight to rescue the company.
The celebrated NSW winemaker – one of the country’s top 10 wine producers by revenue – had operated under six generations of family ownership dating back to 1877 before it was put in the hands of administrators from KPMG last month following a number of successive loss-making years.
Assets for sale include the Hanwood winery near Griffith in the NSW Riverina, one of the largest wineries in Australia, and the Mount Pleasant winery in Pokolbin in the Hunter Valley.
Also on the block are the group’s local brands including McWilliam’s, McW and Mount Pleasant as well as the Australian distribution rights for Taittinger Champagne and Henkell sparkling wine.
KPMG administrators Gayle Dickerson, Tim Mableson and Ryan Eagle appointed Colliers International’s Tim Altschwager and Nick Dean to sell the business and assets by expressions of interest closing March 31.
While the preference was to sell the company and its assets in one line as a going concern, there was also the possibility to acquire assets separately.
There was also an option for an investor to recapitalise the group via a deed of company arrangement.
McWilliam’s Wines Group operated as an unlisted public company and is owned by around 70 McWilliam family members.
Mr Altschwager said the sale represented a unique opportunity to acquire an iconic, family business as well as a large amount of stock and significant property.
“We anticipate wide-ranging interest from major wine industry participants, private equity investors, high net worth individuals and buyers looking for restructure opportunities,” he said.
According to the minutes of the first meeting of creditors held on January 20, McWilliam’s Wines owed secured and priority creditors $12.4 million with unsecured creditors owed $22.4 million.
The largest creditor is McWilliam’s Wines joint venture with WA’s Fogarty family, Margaret River Wine Production which has a $6.2 million claim.
Other creditors include Greg McWilliam’s Maxson’s Pty Ltd ($4.4m), John McWilliam ($1.5m), the group’s vineyard landlord QWIL Investments ($2.9m), the Australian Tax Office. ($1.4m) and German winemaker Henkell & Sohnlein ($1.7m),
The most recently lodged full-year accounts for the group (for the year ending June 30, 2018) value its property, plant and equipment at $29 million, its inventories at $5 million and financial assets at just under $6 million.
Plenty of interest
According to the minutes of the January creditors’ meeting, a recapitalisation in January 2019 was unable to raise sufficient capital to support a turnaround plan.
Administrators identified pressure on margins, a decline in sales, the loss of a distribution agreement in 2015 which limited the group’s exposure to overseas markets, an increasing debt burden and loan defaults as the main factors in McWilliam’s Wines collapse.
The administrators advised they had received a “significant number of expressions of interest from parties both offshore and domestically regarding the sale of the group’s assets both in whole or partially but also on recapitalisation which may be undertaken through a deed of company arrangement”.
A further meeting is due to be held on February 13 to receive the administrator’s report and resolve whether the group execute a deed of company arrangement, whether the administration should come to an end or whether the group should be wound up.
The Hanwood Winery can process 42,000 tonnes of grapes a year while Mount Pleasant can process 800 tonnes. Both wineries include an onsite cellar door.
The vertically integrated business operated as an unlisted public company owned by members of the McWilliam family and their relations.
McWilliam’s recorded gross sales of $97 million in the year to June 30, 2019, but made a loss and would make another loss in the current financial year, the administrators said.
No vintage will come from the Mt Pleasant winery this year due to smoke taint from the bushfires.
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