MW Wine stocks move higher after California competitor files for bankruptcy and delists
By Ciara Linnane
Vintage Wine Estates will try to sell all of its assets as it restructures following a liquidity crisis
The stocks of listed winemakers were mostly higher on Wednesday after Vintage Wine Estates Inc. filed for bankruptcy and said it is voluntarily delisting, removing one competitor from the fold.
The Santa Rosa, Calif.-based company (VWE) said it would try to sell its assets after being hit by a liquidity crisis following months of financial headwinds.
"In response, the company explored several solutions to overcome these challenges, with the monetization of all assets being the most viable path forward to maximize value," the company said in a statement.
Vintage Wine has secured a debtor-in-possession loan from its creditors to the tune of $60.5 million, which will allow it to continue to operate as it undergoes a restructuring.
It has hired GLC Advisors & Co. LLC and GLC Securities LLC to advise on its strategic options. The company has also received and is evaluating multiple preliminary indications of interest for various of its assets.
The company also announced that on July 19 it completed the sale of Cosentino Winery's real property and equipment to Gene Wines LLC for $10.5 million in cash, which it used to pay down debt.
In March, the company posted a net loss of $49.4 million for the second quarter, following a loss of $129.1 million in the year-earlier period. Revenue fell to $68 million from $78.4 million in the second quarter of 2023.
The company said it was seeking ways to preserve cash through restructuring and streamlining measures, and was working to reduce its debt, which stood at $305.6 million as of Dec. 31.
The stock was down 33% on Wednesday to 7 cents a share.
Other wine stocks moved higher, with Duckhorn Portfolio Inc. $(NAPA)$, parent of the Duckhorn, Calera and Goldeneye brands, up 1%.
See also: Duckhorn to buy Sonoma-Cutrer Vineyards for $400 million in big Chardonnay play
Related: Duckhorn CEO on how the pure-play, exchange-listed winemaker will grow and adapt to climate change
Constellation Brands Inc. $(STZ)$, parent of Kim Crawford, Robert Mondavi and Shrader wines, was up 0.3%. Brown-Forman Corp. $(BF.B)$, owner of the Korbel Winery, was up 0.4%.
Willamette Valley Vineyards Inc. $(WVVI)$, an Oregon-based vintner, was up 1.7%, and Chilean producer Compania Cervecerias Unidas S.A. $(CCU)$ was up 1.5%.
The S&P 500 SPX was down 1.7% as investors digested some weaker-than-expected earnings from big tech.
-Ciara Linnane
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July 24, 2024 13:23 ET (17:23 GMT)
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