Oyster Bay secures bank waivers

Oyster Bay secures bank waivers

Delegat's Group has increased its stake in New Zealand's Oyster Bay wine to almost 55% after buying out disgruntled investor Peter Yealands.

Delegat's said today (30 June) that it has agreed to buy up Yealands' 4.82% stake in Oyster Bay, taking its own shareholding to 54.92%.

The group will pay NZ$0.78m (US$0.54m) for the shares in a deal that forms part of a settlement of a long-running legal dispute with Yealands and his equity vehicle, Peter Yealands Investments Ltd.

Both firms have sought compensation from each other over Yealands' failed takeover of Oyster Bay in 2005.

As part of the settlement, Yealands will pay NZ$150,000 to Oyster Bay to settle costs related to the aborted takeover, while Delegat's will pay NZ$200,000 to Yealands, as well as buy up shares, to settle the legal proceedings.

The deal comes a day after Delegat's announced that Oyster Bay's banks have agreed to waive certain financial commitments undertaken by the wine firm.

Oyster Bay said in April that it would seek to be released from banking covenants. Oversupply in New Zealand's wine market has caused grape prices to fall sharply and this, Oyster Bay said, would likely drag the firm to net losses for its fiscal year.

In February, Oyster Bay reported that it had cut net losses by 28% for its fiscal half-year.