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AUSTRALIA: Newly formed Banksia may hunt with $60m floatation

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With an injection of A$6m in working capital from the International Wine Fund and investment bank Grant Samuel, the Tatachilla and St Hallet wineries formally merged this week, naming the new company Banksia Wines.Banksia's managing director, Keith Smith, immediately signalled an expansion plan aimed at creating a regionally-based portfolio of brands.Funds would probably come from an IPO 'at an appropriate time', he said, or equity could be raised independently if suitable acquisitions were found before Banksia went public.Reports say that a possible IPO could come this year to produce a company capitalised at A$60m. The move would mark the biggest Australian wine float sine BRL Hardy's A$67m offering in 1992.Preferred regions for expansion are understood to be in South Australia where Banksia's two founder companies are also based, Tatachilla at McLaren Vale and St Hallet in the Barossa Valley.Combined output from the two wineries is currently 300,000 cases and the equivalent of 65,000 cases in bulk wine. Banksia's aim is understood to be to eventually lift production to 1m cases, switching its bulk production to premium wines.Current exports are mainly to the UK (60%) and the US (25%) with New Zealand taking about 10% and Germany about 5%.The International Wine Fund (IWI) and GS Private Equity, part of the Grant Samuel Group, have each invested A$3m in a mezzanine debt facility which will fund the merger, with the option to covert to equity.The investment by IWI, formerly the Australian Wine & Horticulture Funds, a 13.5% shareholder in BRL Hardy, comes after last week's announcement that it had made its first international investment, a $A1.3m stake in Chablis/Languedoc-based Groupe Laroche.


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