Year-long trek to buy Mt Difficulty ends

After more than a year the Overseas Investment Office (0IO) has given Foley Wines approval to buy Queenstown vineyard Mt Difficulty for $52 million.

Foley chief executive Mark Turnbull said the application was made in November 2017 as the new Labour-led Government came to power. There were delays as OIO officials came to grips with the new regime, he said.

‘‘It was a hard row to hoe, but the OIO people were good in that they told us where our weaknesses were and we got there in the end,’’ Turnbull said.

‘‘While we have a 66 per cent US shareholder in Bill Foley we like to think we’re a Kiwi company with Kiwi managers and directors and more than 900 local shareholders.’’

Now the deal was done, the company would move ahead to employ more people and expand the property with a cellar door and restaurant costing about $3m.

Turnbull said there were also plans to expand Grove Mill vineyard in Marlborough and the company’s Martinborough vineyards.

Following receipt of consent from the OIO and satisfaction of the remaining conditions, Turnbull expected the purchase to be completed in January 2019.

As approved by shareholders at a special meeting in March, the company will undertake the second stage of a capital raising of up to $20m, with placements of shares to new investors and some existing Foley Wines CEO Mark Turnbull shareholders to partially fund the purchase.

The granting of the OIO consent also now means that Lion New Zealand will subscribe for 2.03 million shares, in keeping with a partnership agreement.

‘‘Ever since the proposed purchase of Mt Difficulty Wines was announced in 2017, our entire portfolio has attracted considerable interest around the world. We are very much looking forward to marketing Mt Difficulty along with our wine portfolio in 2019.’’

Foley’s total case sales were up 34 per cent in the first quarter of this year to 129,000, compared with 96,000 for the same period last year.

Bottled sales revenue was up 40 per cent to $10.9m compared with $7.7m for the same quarter last year.

‘‘We like to think we’re a Kiwi company with... more than 900 local shareholders.’’