The unlisted company, whose brands include Ferngrove Vineyards Estate and Leaping Lizard, raised $10.2 million by way of a fully underwritten rights issue. The offer of securities to existing shareholders comprised a stapled offer of ordinary shares together with reset converting preference shares.

Senior associate Richard McMullan, from Freehills’ Perth office, led the team on the transaction. He said Ferngrove planned to use the funds to continue expansion of its winery in Frankland River, Western Australia, to meet increasing demand for wine making facilities in the south-west of the state; to continue its push into overseas markets; and to retire interest bearing debt.

He said the key issue facing all of the firm’s wine producing clients was the prospects of the industry over the next 10 years. “There has been a lot of negative media talking about whether there will be an oversupply of grapes,” he said.

However, information from the Australian Wine and Brandy Corporation, used in forecasts for the company’s prospectus, indicated there was a positive future for the industry. It was interesting as a lawyer, McMullan said, to conduct a detailed line by line review of the statements to ensure they complied with ASIC’s Policy 170 on forecasts, which requires them to be based on reasonable grounds, and for those grounds to be stated.

“The difficulty as a legal adviser is trying to match the legal requirements with the client’s desire to portray the business in the best possible light.”

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