This article is from the Australian Property Journal archive
AUSTRALIA’S largest wine producer, Treasury Wine Estates has bought back water entitlements in NSW from Duxton Water for $25.2 million.
TWE exercised its call option to buy back 2,799 megalitres of NSW high security water entitlements last month.
Duxton Water said it expects to receive approximately $25.2 million upon settlement of the transaction which is expected to occur in the coming weeks.
Furthermore, the company expects to realise a significant accounting profit from this transaction.
Proceeds from the sale are expected to initially be used to offset against the company’s debt facilities, as well as explore opportunities to acquire additional water entitlements in other markets.
The buy back comes as Treasury Wine looks to scale up its operations and re-enter the Chinese market after Beijing removed tariffs on Australian wine imports in March.
The company is looking to reestablish distribution for Penfolds entry-level Australian COO portfolio, including Penfold’s Max’s, Koonunga Hill and One by Penfolds.
Treasury Wine expects that China will continue to be an attractive luxury wine market and significant growth opportunity, in particular for Penfolds which remains highly regarded by consumers in the market.
