New vineyard seeks to raise $6 million

Investors are being given the opportunity to plonk their money into a major new international wine company based in Marlborough.

Monday, August 21st 2000, 12:00AM

Investors are being given the opportunity to plonk their money into a major new international wine company based in Marlborough.

The Crossings (Marlborough) Limited is seeking to raise up to $6 million, as part of the development of a $12 million wine company, The Crossings, to capitalise on international demand for New Zealand wines.

The company intends combining two established vineyards, Medway and Brackenfield, with a third Awatere Valley property it has bought and will develop. Together, these three vineyards will have 140 hectares or 345 acres of planted vineyard and be capable of producing 70,000 cases of premium wine a year.

The offer is for up to 6 million ordinary shares at a price of $1.00 per share, to be paid in two instalments: 50 cents on application and 50 cents on 28 February next year. The minimum subscription is $5,000 with further shares available in multiples of $1,000.

A projected dividend of 8 cents per share fully imputed is proposed from 2005, when the company reaches full production, and is equivalent to an interest return of 12 per cent per annum before tax.

"This offer gives investors the opportunity to get into a larger New Zealand-owned wine company with a strong export focus, at an early stage," Farmers’ Mutual Group chief executive Michael Millar says.

"By combining the current vineyards with the new property, we will have the scale of operation necessary to develop our own wines and access international markets."

The offer is conditional upon $1 million being raised by the expected closing date, 15 December 2000.

"When production from the third vineyard comes on stream in 2004, the company plans to establish its own winery. However, during the development stage from 2001 to 2003, we plan to use contracted wine making facilities and a consultant wine maker."

The company has contracted International Wine Associates (IWA), a Californian firm specialising in global marketing and distribution, to establish marketing and distribution relationships for its wine in export markets.

The Crossing’s ability to attract a major distribution partner is enhanced by the scale of the proposed operation and the ability of the three vineyards to produce high quality wine. This enables the new company to focus on export markets and take advantage of the interest and growing demand for premium New Zealand wine.

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