The New Zealand Wine Company

THE NEW ZEALAND WINE COMPANY LIMITED - BANK COVENANTS

On 27 June 2011, The New Zealand Wine Company Limited (NZWC) advised the NZAX that:
 
·           The Company would, as at 30 June 2011 be in breach of one of its 3 financial covenants with the ANZ Bank;
 
·           The Bank had agreed to waive that breach conditional on the Bank being satisfied with the results of an independent review of NZWC’s financial forecasts and business model.
 
Subsequent to this advice, the Company advised the market that:
 
·           PricewaterhouseCoopers (PwC) had been appointed by the Company to undertake the independent review of NZWC’s financial forecasts and business model;
 
·           In conjunction with the independent review being carried out by PwC, the Company had commenced negotiations with the Bank seeking an unconditional waiver for the breach of the June 2011 covenant and a variation to the covenants applicable to the financial year to 30 June 2012;
 
·           As part of this process, the Company agreed to provide to the Bank an updated June 2012 Budget, and a 3 Year Business Plan;
 
·           As part of the review, the Company agreed with the Bank to develop an equity raising plan to pay down debt and strengthen the balance sheet.
 
·           Grant Samuel had been appointed to advise the company on capital raising and to work with the Company to implement an equity raising plan that would satisfy the agreement reached with the Bank.
 
The Company now advises that following the independent review and negotiations with the Bank, that:
 
·         The Bank has agreed to an unconditional waiver of the breach of the financial covenant at 30 June 2011;
 
·         The Bank has agreed with the Company on the financial covenants that will be applicable for the financial year to 30 June 2012 based on the Company’s financial forecasts for the year.
 
·         Grant Samuel has provided capital raising advice to the Company that is based on satisfying the equity raising covenants included in the agreement finalised with the Bank.
 
Throughout the process that the Company has been working through with the Bank, NZWC management have continued to implement the Company’s restructuring and recovery plans that the Board considers offer a pathway back to profitability.
 
Authorised for public release.
 
For further information please contact:
 
Alton Jamieson
Chairman
The New Zealand Wine Company Limited
PO Box 67, Renwick, Marlborough
Telephone number: 021 964 995
E Mail address: alton_jamieson@xtra.co.nz
Web site address: www.nzwineco.co.nz