Private Land & Property Fund has agreed terms to release Booster Wine Group from its Hawke’s Bay vineyard leases, with consideration assessed to lift net asset value by 0.6%. The three vineyards and winery are now being marketed for sale, although the restructuring remains conditional and much of the consideration is deferred.
- $2.22 million of pre-tax consideration for lease surrender
- Post-tax value assessed at $1.09 million
- Net asset value rises from $1.258 to $1.265 per unit
- Three vineyards and winery marketed at $4.30 million carrying value
- Restructuring conditions expected to be satisfied during November
Hawke’s Bay lease exit agreed
Private Land & Property Fund (NZX:PLP) has reached a conditional agreement to release Booster Wine Group from its Hawke’s Bay vineyard leases, converting a troubled operating arrangement into a deferred payment claim and a potential asset sale.
The agreement resolves the Booster Wines lease exit proposal, which followed reduced demand for Hawke’s Bay grapes and discussions between the wine group and its senior debt provider. Final engagement with the supervisor and other conditions remain outstanding, with completion expected during November.
$2.22 million consideration, mostly deferred
Once unconditional, the three vineyard properties, covering 52 hectares, will no longer be leased to the wine group. The 4,600 square metre winery will remain leased on its current terms until 31 December 2026.
In return for being discharged from its Hawke’s Bay lease obligations, the fund will receive total pre-tax consideration of $2.22 million. That comprises a $2.16 million surrender payment deferred for three years, accruing interest at 10% a year, plus $0.06 million in alternative consideration tied to vineyard services.
The headline amount is not an immediate cash receipt. The manager has assessed the deferred payment at a post-tax value of $1.09 million after allowing for the assessed probability of repayment by Booster Wine Group and tax expenses. The assessment lifts PLP’s net asset value by 0.6%, from $1.258 to $1.265 per unit, with the change reflected in the 29 October unit price to be issued on 2 November.
Four Hawke’s Bay properties enter sale process
PLP has also appointed an agent to market the three vineyards and winery building for sale. The properties are currently carried at $4.30 million following an updated independent valuation announced in July, but the filing discloses neither a sale agreement nor an expected price.
That leaves two separate tests ahead: whether the lease restructuring becomes unconditional and whether the property marketing process produces a buyer at or near the carrying value. The deferred payment also creates repayment exposure over three years, making the eventual outcome dependent on both asset realisation and the wine group’s ability to meet its obligation.
Bottom Line?
The immediate NAV uplift is modest; the more consequential milestones are completion of the November conditions, repayment of the deferred amount and the price achieved for the Hawke’s Bay assets.
Questions in the middle?
- Will all outstanding conditions be satisfied during November, allowing the lease restructuring to take effect?
- Can the three vineyards and winery be sold around their $4.30 million carrying value?
- Will Booster Wine Group meet the deferred surrender payment over its three-year term?