The troubled Australian wine company Evans & Tate (ETW) has received a merger offer from the West Australian wine producer Ferngrove Vineyards. The potential deal offers an alternative to the restructuring plan proposed by financial services group Pendulum Capital and ANZ Banking Group.

Under the Ferngrove proposal, ETW would merge with Ferngrove in return for the issue of 413.33m shares to Ferngrove. The proposed merger would also see ANZ, to whom ETW owes around A$100m (US$84.86m), convert $45m of that debt into 409.09m shares at 11 cents each.

Following a two-year escrow period, ANZ would exit as a shareholder in the merged entity.

Following the merger, there would be an underwritten, one-for-three rights issue to all shareholders at five cents per share which would raise around $17.68m, or possibly as much as $20m.

Around $10m would be used to pay off debt, with the rest becoming working capital. Ferngrove believes that under its plan ETW's core debt with ANZ would be reduced to around $42m after the rights issue.

Evans & Tate said it would be meeting with its advisors to consider the offer and compare it with the Pendulum proposal. The company said that ANZ would also have to examine the Ferngrove plan.