STRUGGLING explorer-cum-winemaker Tuart Resources has taken another step away from collapse, agreeing to sell up to $10.5 million of "clean-skin" wine expected to be produced from next year's grape harvest at its Donnybrook vineyards.
Already in the midst of a $10 million recapitalisation to stave off liquidation, Tuart yesterday said it had entered a memorandum of understanding under which unlisted Melbourne group Nexbanc would acquire 2.3 million bottles of cleanskin wine from the 2003 harvest at Tuart's big Preston Vale and Diamond Ridge vineyards.
Tuart will contract a local winemaker to process its grapes into wine according to specifications determined by Nexbanc, which plans to export the final product to Asia.
Provided the 2003 vintage achieves predicted yields, Tuart said the deal should generate gross sales of $10.5 million.
Nexbanc will also acquire the 2000 cases of wine currently being produced under contract by premium Frankland River winemaker Alkoomi.
Alkoomi last month agreed to process 250 tonnes of red grapes, just over 10 per cent of Tuart's total 2002 harvest, to determine the potential to create a premium red wine from the Donnybrook region.
"The impact of this transaction is significant to the overall strategy of Tuart," the company said. "Nexbanc wishes to establish a label for the future and their intention is to secure long-term contracts."
Tuart has not yet committed any of its subsequent harvests, but said Nexbanc would participate in feasibility studies into expanding the total area under vine at Preston Vale, which at 204 hectares is already one of the State's biggest vineyards.
Tuart also said creditors of wholly owned subsidiary Diamond Ridge Management Co, which was put into administration last year due to unpaid tax liabilities of $2.6 million, had last Thursday agreed to a deed of company arrangement that should come into effect in three weeks time.
The agreement, which includes swapping substantial debts for new equity in Tuart, is conditional on the success of Tuart's recapitalisation plans.
