The New Zealand Wine Company

The New Zealand Wine Company Limited – Issue of Convertible Note

The Chairman, Mr Alton Jamieson, announced that The New Zealand Wine Company Limited (NWC) has today issued the Convertible Note to Foley Family Wines Holdings, New Zealand Limited (Foley Holdings) for $11.8 million in accordance with an ordinary resolution approved by the shareholders at a Special Meeting of Shareholders held in Blenheim on 14 August 2012. 
 
The principal terms of the Convertible Note are:
·                     the term of the Convertible Note is a minimum term of 18 months. After that period or earlier if NZWC is in breach of its obligations under the Convertible Note, the Convertible Note converts at the option of Foley Holdings or alternatively Foley Holdings may demand repayment in lieu of conversion; 
·                     the issue price on the conversion of any shares under the Convertible Note is $1.386 per share which is the same price at which the shares have been issued to Foley Holdings pursuant to the Merger of NWC and Foley Family Wines New Zealand Limited. On conversion of the Convertible Note issued by NZWC, 8,512,266 shares in NZWC could be issued to Foley Holdings at a price of $1.386 per share by way of off-set against the amount owing to Foley Holdings under the Convertible Note. Assuming no change in the shares on issue in NZWC between the date of the issue of the Convertible Note and its conversion to new shares, this would when aggregated with the shares issued under the Merger increase the holdings of Foley Holdings to 83.3%.
·                     the Convertible Note does not give Foley Holdings any right to vote. Foley Holdings will acquire voting rights with the ordinary shares it receives on any exercise of the right to convert under the Convertible Note;
·                     interest is payable, quarterly in arrears (not compounding), on the Convertible Note pending conversion at the rate of 6.5% pa. The interest rate has been agreed between NZWC and Foley Holdings as being representative of market rates for an unsecured loan of its type; and
·                     all shares issued pursuant to the exercise of the Convertible Note will rank equally in all respects with all other NZWC shares on issue.
 
The Convertible Note will not be quoted on the NZAX.
 
The Convertible Note can be converted at the option of Foley Holdings after 18 months and there are no performance hurdles required to be met before conversion can occur. 
 
 
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