Challenger Wine Trust taken over

Asian investors have taken majority ownership of four large vineyards, in Marlborough and Hawke's Bay, which provide grapes to Delegats Wine Group.

The vineyards, which cover 748ha, are all owned by ASX-listed Challenger Wine Trust, but leased to Delegats.

Challenger owns vineyards on both sides of the Tasman, but its balance sheet has been badly affected by the international wine glut, which has caused grape prices to fall and a consequent sharp decline in vineyard values, which has put pressure on Challenger's balance sheet.

Under a proposed capital restructuring, Regenal Investments Pty, a company majority owned by Hong Kong-based investors, will take a 73 per cent stake in the trust.

Papers filed with the Overseas Investment Office, which has approved the deal, value the New Zealand portion of the the deal at $42.3 million, valuing the New Zealand vineyards at $80,696/ha.

The vineyards were all in prime viticultural districts and would have been among the most valuable in the country.

One was located on Gimblett Rd in Hawke's Bay, and another was at Dashwood in Marlborough, both of which are renowned for the quality of their grapes.

However, a lack of profitability saw Challenger write down the value of the vineyards by 14 per cent last year.

Challenger's largest New Zealand vineyard, the Crownthorpe in Hawke's Bay, declined 29 per cent in value between 2007 and 2010.