Agribusiness investment group Palandri will raise $8 million on the secondary market of the London Stock Exchange with the capital raising used to partly refinance $7 million of debt and fund an offshore expansion program.
The group has recently retired $2 million of debt and has outstanding loans with the National Australia Bank and will use some of the capital to deal with that debt while also expanding into European and American markets, a move that could see the West Australian wine producer trebling its exports in the next four years.
Palandri executive chairman Darrel Jarvis says the relationship with the National had become strained in recent times.
“The bank questioned the growth rates of the company and the distribution costs. They had become scared by our success and the growth had spooked the banks,” he says.
However Jarvis admits the company had spent its first years concentrating on supply and not enough time on marketing the brand.
“Despite this we have built a tangible balance sheet and distributed $23 million back to our investors, but we have now got rid of the growth aches and pains.”
Jarvis toldMoney Managementthe company currently produces 150,000 cases a wine a year, but it was now heading towards 200,000 next year and the group will targeting the premium end of the market.
“We are planning to become one of the two largest suppliers to the premium (wine) market in the UK. Palandri has pulled out of the supermarkets and are concentrating on other retail outlets,” he says.
The company’s listing on the UK secondary market is expected to take place in mid-May and as part of the London listing, Palandri is adding a number of UK directors to its board.
These include accountants Grant Thornton International chairman Brian Moritz, agribusiness investment company Coach House chairman Michael Cunningham, RHM Foods chief operating officer Tim Kelly and liquor distributor Unwins executive Phillip Wetz. Unwins have now become a major shareholder in Palandri.
“We have now globalised the company with the new British directors and Palandri is now entering its growth phase,” Jarvis says.
