In 2019 ASB unsuccessfully attempted to syndicate its debt to Yealands Wine Group, the Marlborough wine company's owners revealed this week. Photo / supplied
In 2019 ASB unsuccessfully attempted to syndicate its debt to Yealands Wine Group, the Marlborough wine company's owners revealed this week. Photo / supplied
Yealands Wine Group sold off a chunk of its vineyards to the Super Fund after an attempt to syndicate loans held by ASB failed.
At the start of December, Yealands announced that it was selling four of its Marlborough vineyards to the New Zealand Superannuation Fund, for a price understoodto be $34 million.
Yealands said the money would be used in part to fund further development and a premiumisation strategy, but acknowledged that part of the money would be used to repay debt.
Since then Yealands' ultimate owners have publicly acknowledged concerns about Yealands' debt levels and earnings for the first time.
On Monday the Marlborough Electric Power Trust, the owner of Marlborough Lines (which in turn owns Yealands) held its annual meeting for trustees in Blenheim, a fortnight after it publicly revealed it would not be making a distribution to consumers due to a lack of returns in its investments.
During a presentation, Marlborough Lines chief executive Tim Cosgrove revealed that in 2019, ASB had extended its debt facilities to Yealands with the intention of syndicating the debt to other banks.
However, the attempt to sell the debt to other banks "was unsuccessful", Cosgrove said.
Following the syndication attempt, Marlborough Lines loaned $15m to Yealands, something that was not disclosed publicly until this year. The loan reduced Yealands' debt to ASB to $115m
Questioned about the syndication attempt, David Dew, Marlborough Lines' chairman appeared to blame both publicity around Yealands by local business advisor, David Taylor.
"They did not like the noise you created," Dew said in response to a question from Taylor.
"On top of that, they thought the earnings should be higher than they were."
David Taylor is the plaintiff in High Court proceedings against the Marlborough Electric Power Trust. Photo / Hamish Rutherford
Taylor is the plaintiff in High Court proceedings against the MEPT, which is seeking information about whether the trustees have properly kept informed about the performance of the trust's investments.
ASB has not responded to a request for comment.
Trustees of the MEPT could not say exactly how much of the money from the proceeds would be used to pay down debt, but said the sales price "more than" supported the carrying value of its other vineyard assets.
Marlborough Lines has said Yealands' results in the year to June were affected by Covid, with on premise sales in export markets hit by Covid restrictions.
When a beneficiary asked to quantify how much of the Yealands' sales were on premise, Yealands' chairman Matt Thompson said it would be difficult to answer and he could not see the point of the question.
Marlborough Lines began buying Yealands in 2015 and has invested more than $100m buying the company outright.
While it has seen significant gains in the value of its land holdings, Yealands has struggled to generate trading profits, with Marlborough Lines estimating at Monday's meeting that at pre-tax level, Yealands made around a $4m loss in the year to June 30.
