Evans & Tate has executed a binding heads of agreement with its bank, ANZ, to restructure the company's balance sheet as part of its turnaround strategy.

The restructure plan, unveiled today (10 May), will reduce Evans & Tate's interest-bearing debt to sustainable levels and position the company to execute its strategic and operational plans, a statement said.

As part of the agreement, relevant security holders will be asked to approve the issue of 409m shares to ANZ and a strategic third party co-investor, who is yet to be identified. This will raise A$45m (US$37.4m).

The plan also includes the issue of a further 20.4m shares to ANZ, also valued at 11c each, as a 5% placement fee for introducing the strategic third-party co- investor and in lieu of a cash payment.

Security holders will also need to approve the conversion of the convertible notes into ordinary shares at a conversion ratio of 4.18 ordinary shares for each note. Finally, they will be asked to ratify the conversion of WInES into ordinary shares at a ratio of 2 ordinary shares for each WInES as contemplated by the WInES prospectus.

The proceeds of the capital raising will be used to repay $45m of the company's existing debt to ANZ, and reduce that debt to around $55m with facilities of approximately $60m being retained.

Following the placement to ANZ and the co-investor, the company will undertake a share purchase plan to raise up to an additional $5m. The proceeds of the share purchase plan will be used to further reduce the company's debt.

Chairman John Hopkins said: "The company is delighted to have secured the support of ANZ for the proposed restructure. This marks a significant step in the turnaround strategy for the company. We are grateful that ANZ has been willing to share our vision for the future of Evans & Tate and that, with the support of ANZ, we have been able to provide an opportunity for all stakeholders to participate in the rewards of the turnaround strategy."

Evans & Tate managing director Martin Johnson added: "This agreement will provide a sound and solid financial platform for Evans & Tate to move forward as a high quality, premium winemaking company centred on the Margaret River in Western Australia."

Hopkins added: "In the meantime, ANZ has reaffirmed that so long as stakeholders are supportive of the restructure plan, it is ANZ's current intention to support Evans & Tate and to continue to provide financial facilities to enable Evans & Tate to carry on its day-to-day operations."