Discount wine to lure Oyster Bay investors

By Geoff Senescall


The Delegat family uncorked its $18 million Oyster Bay vineyard offer yesterday aimed at developing prime land in Marlborough's Central Wairau Valley.

Two lures for prospective investors are a 30 per cent discount on Oyster Bay wine purchases and preferential treatment to subscribe for shares should the Delegat's Group seek a full market listing.

Meanwhile, the shares in the new company, Oyster Bay Marlborough Vineyards, will be traded on the secondary market for unlisted securities on the NZSE's SEATS.

The Oyster Bay shares are being offered in minimum parcels of 5000, payable in two instalments: 100c a share on application and 100c a share on June 30 next year. The prospectus put a net asset value on the share of 104c for every 100c invested.

The funds will be used to acquire all the shares in two Marlborough vineyards - Gifford's Creek and Airfields (still undeveloped) - totalling 301 hectares. Profits are not expected to start flowing until the year 2002, when revenue of $1.9 million is forecast, throwing out a profit of $147,163. From then on revenue and profits are expected to steadily increase, rising to $4.7 million and $1.3 million respectively in 2007.

A nominal pre-tax dividend yield of 4.5 per cent is projected in 2003, increasing each year to 11.2 per cent in 2007.

"The decision to go public was prompted by increasing local and international demand for Oyster Bay wine," said Delegat's managing director Jim Delegat.

Delegat's will be a cornerstone holder with at least 20 per cent. It will also manage the vineyard. The closing date for the offer, handled by broker Craig & Co, is July 7.