Treasury Wines Estates has added a little wrinkle to the potential float of Accolade Wines by terminating a wine bottling deal in the United Kingdom with the ASX aspirant.
Treasury has given Accolade notice that it intends to cease a wine bottling initiative whereby many of Treasury's European brands are packaged up at the large Accolade facility in Bristol.
But the deal won't end quickly. Under the terms of the agreement it will be three years before Accolade actually stops bottling Treasury grog at its giant plant.
The original agreement was struck in 2012 under a reciprocal arrangement where many of Treasury's brands destined for Europe are bottled by Accolade in the UK. In turn, Treasury began bottling a range of Accolade brands in Australia at Treasury's Wolf Blass facility near Nuriootpa in South Australia.
Two months ago The Australian Financial Review revealed plans by Accolade to invest up to $40 million on expanding its winery at Berri in South Australia's Riverland. This meant it would bottle its own brands again in Australia.
The dual hemisphere reshuffling comes as Accolade, owner of Hardys, Leasingham, Grant Burge and Mud House, works through its non-deal roadshow ahead of a planned $1 billion-plus ASX listing in the first half of 2017, first revealed by Street Talk.
Fund managers have been seeking reassurance from Accolade's management and 80 per cent owner CHAMP Private Equity that the backwash from the Brexit vote and the potentially slow unravelling of the European Union won't cause things to go sour.
The British pound has taken a thumping and is down around 20 per cent since June. Close to 50 per cent of Accolade's earnings come from the United Kingdom.
Elsewhere, Allegro Funds has acquired West Australian drilling outfit JSW Australia.
As revealed by Street Talk, the Sydney-based private equity group received approval for the purchase at a creditors' meeting on Thursday
JSW, a mine production and specialist drilling services business, is a subsidiary of Hughes Drilling, which went into voluntary administration in September.
"Despite being in voluntary administration since September, JSW has continued to win work and has a promising contract pipeline, which shows the underlying strength of the business," Allegro managing director Adrian Loader told Street Talk.
"We intend to build on this by allocating capital for development and growth and improving governance and systems, further enhancing our capacity to service new and existing customers."
The deal marks Allegro's fifth investment in Allegro Fund II.
