Wine business

The much publicised purchase of Australia’s Loxton winery by Champagne Indage, India’s biggest producer of Indian wine, has been put on hold. Indage has not been able to raise the necessary finances to close the deal within the agreed time period.

The A$60m ($36.7m) sale of South Australian winery owned by Australian Vintage, formerly known as McGuigan Simon was to be completed by 30 September. It was delayed due to some regulatory hurdles and was to be closed on 31 October. Indage has also failed to pay the A$3m deposit, as promised.

“It's only in the last 24 hours that they notified us that they wouldn't be able to complete the purchase by October 31,” Australian Vintage CEO Dane Hudson told the Sydney Morning
Herald.

However, Ranjit Chougule, Indage’s managing director, says: “the deal is not off – but only delayed mutually by both the parties. We are trying to conclude within this year.”

The financially stretched Australian Vintage has been trying to sell the winery, one of the top five by volume in Australia, for the past 18 months. With the current economic scenario it may not be easy to arrange financing for the deal.

Champagne Indage had established a foothold in Australia through the purchase of Tandou winery in South Australia last year.

Indage shares have nose-dived from a high of Rs. 981 to touch the yearly low of Rs. 146 last Friday, plunging 75% on the Mumbai Stock Exchange during the current economic meltdown. With 14.58 million shares issued and the rupee piercing the Rs. 50 to a dollar mark, the net capitalisation of the company has come down drastically to approximately $42.15 million.