Investment company takes big stake in Te Kairanga Wines

Wellington-based investment company Rangatira Ltd has taken a cornerstone stake in Martinborough wine company Te Kairanga Wines Ltd.

Rangatira, the investment arm of the JR McKenzie trusts, bought 500,000 shares at $5 each, giving it a 25 per cent stake in the winemaker.

The sale was part of a $5 million capital-raising effort to finance the company's new winery and development of new vineyards.

An offer by the company of a further 500,000 shares at $5 each to existing shareholders, at a rate of one additional share for every two shares already held, closed oversubscribed, Te Kairanga said in a statement.

There are now almost triple the number of Te Kairanga shares on issue, compared with the company's balance date of June 30, 2001.

Shares in the tightly-held company last traded on the Stock Exchange's unlisted board at $5.60 -- compared with their original issue price of $4.

Rangatira chief executive Rick Christie said the company had been searching for a wine industry investment for some time.

Te Kairanga met the investment group's criteria of being a niche marketer with a strong growth profile, good growth in profit and sales, and a solid strategic plan.

"(Te Kairanga) is a top-notch wine company in terms of its quality and its reputation," Mr Christie told NZPA.

"It's not the biggest wine company in New Zealand... but to get a substantial stake in a substantial, fast-growing company was really what we wanted to do.

"We felt it would be a good long-term investment for Rangatira."

Te Kairanga also fitted well with Rangatira's other investments, Mr Christie said.

Te Kairanga chief executive Andrew Shackleton today welcomed Rangatira's move on to the company's share register, saying the partnership would benefit both parties.

Rangatira's other investments include stakes in agri-tech company Tru-Test Ltd and Kapiti Cheeses Ltd.

Te Kairanga is the second-largest wine producer in the Martinborough region, and specialises in the Pinot Noir and Chardonnay varieties.

The company made a net profit after tax of $270,000 in the year ending June 30, 2001. Exports made up 30 per cent of sales by volume in 2001, with that figure picked to exceed 50 per cent after five years.

"We have excellent distribution channels in place in our main export markets of the United States, Australia and the United Kingdom," chairman Bob McCay said.

Te Kairanga's original vineyards, including its namesake Te Kairanga, are located on the Martinborough Terrace, near the Wairarapa town of Martinborough.

The company has branched out into the nearby Springrock and Ruakokoputuna sites, giving it a total of 120 hectares of land under management. A 12 hectare block at Springrock is fully planted, while the 55 ha block at Ruakokoputuna is set for planting this winter.

The new developments are designed to sure up the company's grape supply, which in the past has been interrupted by poor weather conditions in the contract growing areas of Gisborne and Hawke's Bay.

Work has also begun on a new winery building at the company's Te Kairanga site.

- NZPA