Australian Vintage obtains settlement

Wine firm Australian Vintage Ltd has agreed to a settlement with Indage Vintners Ltd over the failure of Indage to complete the purchase of the Loxton winery from Australian Vintage.

Indage Vintners, formerly known as Champagne Indage, is India's biggest wine producer.

In March 2008, Indage agreed to acquire the 90,000 tonne-capacity Loxton winery in South Australia from Australian Vintage for $60 million.

The sale had been expected to be completed by September 2008 but was subsequently deferred until October.

In October, Indage had said that it would be unable to complete the purchase of the winery at the designated time but it remained committed to the acquisition.

Indage said that market conditions meant that alternate funding needed to be found.

In April 2009, Australian Vintage said Indage had failed to confirm that it would complete the acquisition and Indage had asked for more time.

Australian Vintage refused the request and subsequently took action in the Federal Court of Australia to enforce its legal rights under the sale agreements.

Under the settlement, Australian Vintage has received an amount that has been applied towards the purchase of wine from Thachi Wines in South Australia, which is a wholly owned subsidiary of Indage Vintners.

The wine obtained is in addition to a $6 million non-refundable deposit previously paid to Australian Vintage by Indage for the Loxton acquisition.

Australian Vintage has retained the Loxton winery.

The company said on Thursday that it would continue to look for alternative buyers.

Australian Vintage has discontinued its court action.

Australian Vintage shares were steady at 32 cents on Thursday.