Rangatira takes quarter share of winemaker

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

Rangatira, the investment arm of the J.R. 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 the 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, has been oversubscribed.

The issues mean that since the company's last June 30 balance date the number of shares it has on issue has almost tripled.

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

Te Kairanga chief executive Andrew Shackleton welcomed Rangatira's investment, saying the partnership would benefit both parties.

Rangatira's other investments include stakes in agricultural technology company Tru-Test and Kapiti Cheeses.

Te Kairanga is the second-largest wine producer in the Martinborough region. t specialises in the pinot noir and chardonnay varieties. The company made a net after-tax profit of $270,000 last year.

Exports made up 30 per cent of its sales by volume in the year and that figure is picked to exceed 50 per cent in five years.

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

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 expanded on to its nearby Springrock and Ruakokoputuna sites, giving it a total of 120ha of land under management.

A 12ha block at Springrock is fully planted and the 55ha block at Ruakokoputuna is set for planting this winter.

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

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

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

He said 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," said Mr Christie.

"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."

He said Te Kairanga also fitted well with Rangatira's other investments.

- NZPA