UK: Dromana and Unwins join forces
Dromana Estate has appointed a distributor in the UK. The Australian wine company said today (25 May) that Phillips Newman and Company Ltd, a division of the retailer Unwins, will distribute certain of its products in the UK and other agreed markets for an initial three year period. In return, Unwins will gain a major holding in Dromana.
Under the terms of the transaction, Phillips Newman has agreed to order a minimum of A$6m worth of Dromana product over the three year term of the agreement including a minimum order of A$2m worth of product in each of the years.
Dromana has agreed to provide Phillips Newman with rebates as contributions to marketing expenses or similar amounts. Phillips Newman has agreed to apply the total amount of the rebates to the subscription of 6,675,698 ordinary shares (equivalent to a 19.9% stake in Dromana) and a call option over 15,197,413 ordinary shares.
The shares will be issued at a price of A$0.25 each, on the basis that the rebate on each order placed by Phillips Newman will be applied as the subscription price for shares.
A holding company of the Unwins group, DM Private Equity (2004) Limited, is also subscribing for convertible notes with a face value of A$433,333. The options will have an exercise price of A$0.25 per share, and will expire on 30 June, 2010.
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