The pair, who have been holding formal negotiations about combining their operations since late February, have concluded talks at Accolade’s behest. Accolade notified its potential partner last Wednesday (22 May) that it was “not in a position to continue discussions further at this time”, according to Australian Vintage.
The development prompted the latter to apply to the Australian Securities Exchange for a suspension of share trading at the start of this week.
In the application, AV, which owns the McGuigan and Nepenthe wine brands, warned that its total debt at the end of June is estimated to total around AUD70m (US$46.6m) to AUD75m, “compared to prior management expectations … of AUD43-AUD50m”.
“Given expected working capital requirements in Q1 fiscal 2025 (AV’s financial year runs to the end of June), Australian Vintage believes that commencing trading would be materially prejudicial to its ability to source additional capital, which is critical to support its continued financial viability and operations.”
The trading suspension will be in place until around mid-June, when AV intends to update on its capital raising and debt refinancing efforts.
AV, which parted company with its CEO with immediate effect earlier this month, is in an eerily similar situation to Vintage Wine Estates. Only last week, the US-based group warned that “there is a substantial doubt about our ability to continue as a going concern“.
