McWilliam’s creditors scotch last minute bid from rival De Bortoli

Almost 18 months after McWilliam’s Wines collapsed into administration, creditors have voted to sell the company and keep the $13 flagons of sherry flowing.

Doug McWilliam of McWilliams Wines in 2007. Picture: Vince Bucello

Creditors of collapsed wine group McWilliam’s have backed a $46.25m proposal from Calabria Family Wines and Medich Family Office to acquire the 143-year-old company, scotching a last minute, and higher, bid from rival De Bortoli.

It is the second time creditors voted on the fate of the company, after sale to the administrators initial preferred bidder, private equity firm Prcstnt — pronounced persistent — fell through in December.

Under the Calabria and Medich proposal, the company will be split, with Calabria acquiring McWilliam’s Hanwood winery — home the $13 flagons of sherry — and Medich taking over the Mount Pleasant winery and assets.

As a result more than 60 staff, or two-thirds of McWilliam’s total workforce will be retrenched.

Calabria will pay $32.25m and redundancy payments totalling $124,946.76. Medich, meanwhile, will pay $14m — subject to adjustments in stock and employee leave entitlements. A total of 95 per cent of creditors by value supported this proposal.

The creditors vote came as De Bortoli lobbed a last-minute bid of $47.5m, which included retaining more McWilliam’s staff. De Bortoli also had the backing of McWilliam’s family member David McWilliam as part of an 11th hour effort to keep the family involved in the company.

But administrator Gayle Dickerson of KPMG recommended creditors vote for the Calabria Medich proposal, given it provided more certainty and a “marginally higher” return than the De Bortoli offer.

Under the Calabria/Medich proposal, unsecured creditors will receive 52-90c in the dollar, while the return under De Bortoli would have been 51-88c. Both payments were expected to be paid by the end of September this year.

But Ms Dickerson said in the creditor’s report that sale to Calabria was expected to be completed by Friday, which “decreases any trading losses and professional costs”, while the sale of the Mount Pleasant winery to Medich would be completed by May 10.

“As at the date of this report, sale agreements have not been entered into with De Bortoli,” Ms Dickerson said.

McWilliam’s entered into voluntary administration in January last year, 12 months after the company was forced to seek an urgent capital injection and pursue asset sales after it breached some of its lending covenants.

It had recorded cumulative losses of close to $90m since the 2015 financial year. Meanwhile, the net asset position of the group reduced from $57.4m to $31.3m from June 30, 2018 to December 31 last year.

Originally published as McWilliam’s creditors scotch last minute bid from rival De Bortoli