Accolade Wines has today announced that it has reached an agreement with its lenders, Australian Wine Holdco Limited (AWL), on a recapitalisation plan, allowing the wine producer to stabilise the financial future of the business.
Under the terms of the agreement, there will be a change of control from existing shareholders as AWL, a consortium of international institutional investors, takes equity ownership of Accolade Wines.
Set to be completed by mid-year, the capitalisation plan will allow Accolade Wines to reduce its total senior interest-bearing debt, with a corresponding reduction in annual interest expense and additional funding from AWL investors providing greater operating flexibility to invest in the growth of the business.
Subject to customary regulatory approvals, the implementation of the agreement allows time for satisfaction of conditions and negotiation of procurement arrangements with key suppliers, which is currently being progressed by Accolade Wine’s management team.
Robert Foye, Accolade Wines CEO, spoke about the recapitalisation plan: “This agreement is great news for Accolade, our customers, our suppliers and our people. Like all Australian winemakers, we have been hit by a number of challenging macro-economic and industry headwinds in recent years.
“Despite our strong stable of brands and leadership positions in key markets, as well as operational measures taken to strengthen the business, our ability to respond to these challenges and grow has been hampered by an unsustainable balance sheet.
“With this recapitalisation and the support of our new shareholders, we will be ideally positioned to take advantage of the significant opportunities to meet consumer demand and grow sales around the world,” he concluded.
A spokesperson for AWL, which comprises funds backed by Bain Capital Special Situations, Intermediate Capital Group, Capital Four, Sona Asset Management, and Samuel Terry Asset Management, said: “Accolade Wines has a long, proud Australian history as a world-class wine producer and we hope it will remain so for many decades to come. We hope this restructure will build a more secure long-term future of the business. We will be working with and supporting Accolade’s management to focus on operations and stakeholders.
“We recognise Accolade’s South Australian operations will be crucial to the success of the company and understand the important role the company plays in the local grape growing industry, and the broader South Australian economy. We are committed to working with Accolade’s business partners of growers and customers to ensure a sustainable business.”
Under the agreement, no immediate changes will be implemented to Accolade Wines current operations, employee numbers or customer and supplier relationships.