Cosentino Signature Wines defaults on loan payment
UK-listed Cosentino Signature Wines has defaulted on its most recent loan repayments, but has entered talks with several parties in an effort to secure fresh financing.
Cosentino, based in California's Napa Valley but listed on the UK's AIM stock exchange, confirmed the default today (9 April).
It also announced that its current lenders have indicated that they are unable to meet the firm's desire to refinance its existing US$18m debt.
The news is a blow to the premium wine group, which issued a profit warning for its full-year in December.
A source close to the situation told just-drinks today that the group remains confident of securing the necessary financing. It is understood that the bulk of Cosentino's $18m debt is not due for repayment until next year.
Cosentino said: "The company has commenced discussions with several other interested parties with a view to one or more of them refinancing the existing debt and providing new working capital facilities, including any funds required to compensate the lessors of the vacated properties."
Cosentino, alongside other drinks firms, including Diageo, has been affected in recent months by wholesalers cutting back on orders, preferring instead to run down existing stocks in the face of a fall in consumer spending power in the recession.
"The core wholesale business has not yet improved as expected," said Cosentino, adding: "However, since the board considers that many of its key wholesale customers will be low on inventory, the board believes that the wholesale operations should pick up in April and May."
- April 09,2009