Bank squeeze on wine grape MIS

ONE of Australia's largest wine grape managed investment schemes has been forced to restructure its debt.

This decision comes in the wake of serious financial losses and $19.5 million of debt.

Australian Vines Limited this week admitted it had been forced to enter a standstill agreement with its bank "in order to provide a stable platform from which to pursue a restructuring of its balance sheet".

"AVL is not in a position to further comment on the restructuring initiative at this time," a statement said.

AVL is the parent company of one of South Australia's largest MIS vineyard companies, Barossa Vines Limited.

The latest restructure follows AVL's breach of its loan-to-value covenant with its bank last year.

The company said the breach occurred due to the valuations obtained by the bank, which differed to the underlying values adopted by AVL.

BVL has suffered a series of poor seasons.

"Whilst operational losses were reported in the year ending 30 June 2010, those losses relate to that year's growing season," AVL said.

"The 2009 and 2008 growing seasons were below average due (to) adverse climatic reasons."

AVL and BVL managers said they did not believe either company or any of the 10 MIS projects were at risk of collapse.

The companies have 1277ha of vineyards in the Barossa Valley, with AVL holding a 60 per cent share and MIS the rest.