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Australian Vintage seeks emergency capital raise as Accolade deal falls through

The brand owner, which has Tempus Two and McGuigan in its portfolio, has been in discussion with Accolade since February.

The buyout offer has now been officially rescinded as Accolade told the smaller group that it was “not in a position to continue further discussions at this time”.

• Read more: Félix Solís expands global footprint with 2024 Chilean vintage

Their announcement shortly followed the decision of over 500 members of the CCW Co-operative based in South Australia’s Riverland region to downvote a proposal to renew an existing grape-growing contract with Accolade which stretches back 30 years.

The backdrop to these discussions is a mounting wine oversupply crisis in Australia which reached two billion litres last year (Rabobank).

The Riverland region produces about 10% of Australia’s wine. There is now concern that millions of vines will potentially need to be destroyed if the problem cannot be fixed.

Accolade Wines CEO Robert Foye recently told the Australian Financial Review that the current situation “simply isn’t sustainable”.

It is believed that the new owners of Accolade – a consortium of investment firm Bain Capital, which became the company’s largest stakeholder in April – pushed to overhaul Accolade’s largest grape supply contract.

A majority (95%) of the growers rejected the deal, which is suspected to have contributed to the buyout collapse.

It has been reported that Accolade urged the organisation’s growers to accept the deal, saying it was the “only option that allows CCW’s growers and Accolade to remain viable”.

Australian Vintage has now requested a suspension of its shares amid plans to raise capital and refinance its debt. The company’s net debt is expected to balloon to AU$70-75m by the end of June, compared to a previous estimate of AU$43-50m.

• Australian wine
• Accolade Wines
• Australian Vintage
• grape oversupply