Palandri Ltd is looking to buy Frankland River Vineyard in Australia. The wine company yesterday (1 December) announced to the AIM in London that it plans to raise A$7.5m (US$5.6m) to acquire the vineyard, currently owned by its subsidiary Palandri Wine Production Limited.

Palandri Investment Management Ltd, another Palandri subsidiary, is seeking the funds through a supplementary prospectus as manager of the Agriculture Property Trust, which intends to buy the Frankland River Vineyard 2.

The Trust was launched in May to raise monies for the acquisition of vineyard properties, initially the Harvey Vineyard in Western Australia, which would then enter into arrangements with members of the Palandri Ltd Group for the management, planting, harvesting and production of wine from the grape output of the vineyards. The fundraising for the Harvey Vineyard is ongoing.

Palandri Wine Production Limited has granted a call option for a period of 12 months to the Trust to acquire the vineyard, and the acquisition may be phased such that lots are transferred as funds are raised by the Trust or Palandri Wine Production Limited may provide deferred terms in relation to the consideration.

The board of Palandri Ltd believe that the call option will have been exercised and the vineyard sold to the Trust by June 2006.

Proceeds received by Palandri Wine Production Limited will be utilised in the first instance to reduce group indebtedness.