By Ian Neubauer
Cockatoo Ridge Wines has concluded the placement of a large number of low-priced shares followed a series of tumultuous events that have seen the company’s balance sheet fall deeply into red in recent months.
Cockatoo issued four hundred million shares priced at half a cent each to provide general working capital and “foster exports of packaged products taking advantage of the prevailing favourable exchange rates in certain key overseas markets,” said Cockatoo managing director, Peter Perrin, in a statement to the Australian Securities Exchange.
It follows the cancellation of a major bulk wine transaction in January that resulted in what the company described as “extremely difficult trading conditions” and the posting of a net loss of $54.8 million for the six months ended December 31.
This compares to a record $4 million profit corresponding to the same period in 2007 and the creation of a joint brand and distribution partnership with Australian Commercial Wines.
The deal marked a period of unprecedented growth for the mid-size South Australian wine producer, with Cockatoo chairman Ivan Limb forecasting a “solid” year in 2008.
Cockatoo shares have not moved over the past seven days, trading at midday today (Mar 9) for .6 cents.
The shares teetered near the $1 mark in July last year and have been in a freefall ever since. They levelled out at 30 cents in December but fell below 1 cent in value following the cancellation of the major bulk wine transaction.
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