Cockatoo Ridge Wines appoints voluntary administrators

THE downturn in the wine sector has claimed another casualty, with Cockatoo Ridge Wines appointing voluntary administrators.

It follows concerns that the company and its subsidiaries were likely to become insolvent in the third quarter of 2009-10.

The directors said they had made the move having considered the trading conditions it expected to encounter in the third quarter of 2009-10.

George Divitkos and Russell Henry Heywood-Smith from BDO Kendalls (SA) were named as the administrators of CKR and its subsidiaries, Australian Commercial Wines, Cockatoo Ridge Sales, Cockatoo Ridge and Playford Wine Holdings.

The move comes after a trading halt on December 9 and the suspension of Cockatoo Ridge Shares at 3 cents on December 10.

Cockatoo Ridge said last week that it had leased its Riverland winery at Monash, valued at $14.3 million in its June accounts, for one year after previously announcing that its planned sale had fallen through.

The company said in its June accounts that the continuing support of its financier, GE Commercial Finance, was critical.

"In particular, if the financier . . . withdraws its support at any time, it is highly unlikely the company and consolidated entity will be able to continue as going concerns,'' it said.

A key priority had been to renegotiate $8.9 million of debt, which technically fell due when it breached its loan covenants last year.

Cockatoo Ridge had a market capitalisation of $2.5 million before the trading halt.