Vintage Wine Estates has failed to stay afloat in its current guise and has commenced legal proceedings to declare bankruptcy under Chapter 11 in the US.
The filing, announced today, would allow the California-based company to follow “a fair, structured process … to address outstanding debt obligations while the business pursues the sale of its assets”. According to VWE, the group has outstanding loans and commitments totalling around US$310m.
The news comes almost two months after management admitted “there is a substantial doubt about our ability to continue as a going concern”. Attention now turns to the ongoing sale of assets, starting with Cosentino Winery in Napa Valley, which was bought by Gene Wines earlier this month for $10.5m. At the same time, VWE is hoping for approval from the Bankruptcy Court in Delaware of a $60.5m credit agreement that “along with the company’s existing liquidity and cash generated from ongoing operations, will be used to support … business during the restructuring process”.
A voluntary delisting from the Nasdaq Stock Market is scheduled for early next month. VWE’s share price fell below Nasdaq’s $1-per-share minimum threshold about a year ago – from a high of almost $13 in mid-2021.
“Over the preceding months, the company experienced negative financial headwinds that severely impacted its liquidity position,” VWE said. “In response, the company explored several solutions to overcome these challenges, with the monetization of all assets being the most viable path forward to maximise value.”
Last week, Pernod Ricard agreed the sale of its ‘international strategic wine brands’, including the Campo Viejo and Jacob’s Creek marks, to the owners of Accolade Wines.
