Hawke's Bay-based Sileni Estates has found a new partner to steer it through "severe headwinds" in the Australian wine market.
Sileni Estates has secured a purchaser for its Hawke's Bay business to ensure the continued operation and supply of its wine, with New Zealand financial services company Booster, coming on board through its Booster Tahi Limited Partnership.
The business will now operate as Sileni Wines Limited Partnership, recognising the change of ownership and introduction of new capital.
Sileni Estates chief executive Nigel Avery confirmed the Avery family would continue to be involved in running the business, which was founded by Sir Graeme Avery 21 years ago.
"This is a bittersweet day, but we are pleased to have reached a solution to the financial challenges we have been facing," Avery said.
"We have experienced severe headwinds in our Australian market in recent years. Management and strategy changes in our primary Australian distribution partners has reduced our access to that market. The result has been a significant reduction in sales, which has led to overcapacity in our New Zealand production operation.
"We have therefore been actively seeking investment over the past 12 months as our position has deteriorated. After a thorough evaluation process, we found a partner in Booster. Their understanding of the New Zealand agri-business sector and genuine commitment to help New Zealand businesses thrive are aligned with our company ideals.
"Our key motivation all along has been to minimise the impact on our staff, suppliers and community and I'm pleased that we have found the support which has enabled a large number of staff to be retained.
"We are sad to be saying goodbye to a handful of staff and, while we regret what has happened with the business, we are thankful that operations will largely carry on as normal. This partnership provides a solid foundation for the business and allows us to build on the proud history of the Sileni brand.
"Through Tahi we join a group of New Zealand businesses in taking our finest to the world."
Financial details of the agreement would remain confidential.
Booster executive chairman Paul Foley said the company saw strong potential to reinforce Sileni's position as a supplier to over 80 international markets – albeit with a focus on production in the 400,000 case range.
"With its strong presence in Hawkes Bay and its production of quality Marlborough sourced wines, Sileni products will complement the wine businesses with which Booster already partners.
"Currently Booster Tahi has ownership stakes in The Awatere River Wine Company in Marlborough, Waimea Estates in Nelson and Bannock Brae in Central Otago."
As limited partnerships needed a separate manager in the form of a general partner, a new company, Sileni Wines (2018) Limited had been formed to manage Sileni Wines LP.
That company would have Nigel Avery as its chief executive, while Nigel and Sir Graeme Avery would be directors, along with Allan Yeo and Paul Foley from Booster.
"Booster has looked to 'right size' the business for the current circumstances," Foley said.
"This has meant that Booster has not been able to buy the existing company or the business as a whole. Booster has selected the parts of the existing business that it believed it could combine into a profitable go forward business. This has meant that some parts of the existing business will remain with the vendor company (and it has been talking to the suppliers, lessors or growers involved about the impact on them).
"Staff numbers will reduce slightly, in part because there is existing capability within Booster's existing wine businesses but also because the "new Sileni" will be a smaller business than before.
"All staff affected were advised of their position in the weeks leading up to the sale occurring."