Marlborough Lines to sell part of controversial Yealands investment

Seaview, the headquarters for Yealands in Seddon, comprises a sprawling coastal vineyard and winery.

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Seaview, the headquarters for Yealands in Seddon, comprises a sprawling coastal vineyard and winery.

Marlborough’s lines provider is looking to sell off part of Yealands Wine Group to fund new energy projects.

Marlborough Lines is looking for “potential strategic partners” to take control of the wine company it bought 80 per cent of in 2015 for $ 89 million, and the rest for $ 22.8m in 2018.

The investment has been controversial. Marlborough Lines said the unusual purchase would improve dividends for power users, paid to their power bill from the Marlborough Electric Power Trust, which owned Marlborough Lines on behalf of all power users.

However, Yealands has failed to deliver normal dividends in the last two years, opting instead to pay off its disproportionate debt, prompting renewed calls at a public meeting last year for the company to be sold.

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Marlborough Lines chairperson Phil Robinson said it was hoped a strategic partner could be found to take control of the business and help its overseas growth, while Marlborough Lines retained what would likely be a minority share, depending on the offers received.

“It will likely be a share sale, but not necessarily … it might be that we just retain the land.

“We’re just wanting to see what the appetite is, and see what the best outcome would be for Marlborough shareholders and beneficiaries.

“For us, it’s about reducing our exposure in the wine industry, and re-investing in the Energizing Marlborough strategy.”

RNZ

In this episode of RNZ’s The Detail we hear all the twists and turns after utility company Marlborough Lines made the seemingly “utterly bizarre” decision to purchase Yealands Wine.

Marlborough Lines planned to spread its investment across several industries eventually, Robinson said.

Divesting part of Yealands would also allow Marlborough Lines to focus on its new subsidiary Energy Marlborough, which launched a few years ago to produce renewable energy for the grid.

Work was already underway for a solar farm at the company’s Taylor Pass depot, and more projects would be revealed in the coming months.

The capital produced by the sale would fund new sustainable energy projects, mainly solar, Robinson said.

“With the new ferries, electric aircraft, EVs … all of that needs infrastructure to support it. Things are changing very quickly, it’s exciting times for the energy industry. “

Two new hybrid-electric ferries are expected to arrive in New Zealand in 2025 and 2026.

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Two new hybrid-electric ferries are expected to arrive in New Zealand in 2025 and 2026.

A new partner for Yealands would need to align with Marlborough Lines’ sustainability and clean energy strategy, Robinson said.

If the right partner could not be found, the lines provider would continue to support Yealands to achieve its strategic goals, he said.

“Due to the significance of the Yealands business within Marlborough, we will be carefully considering different stakeholders and community interests. We recognize the importance of supporting the team at Seaview and our grape-grower community. “

Yealands was one of the country’s largest independently owned wine companies, with more than 1800 hectares of land, scale processing assets, sustainability credentials and significant export sales.

“Yealands has a valuable asset base, which has grown by $ 100 million since 2015 when we first purchased it. It has excellent growth prospects, with strong management and governance. We would expect any new partner to enhance the business and the interests of the region, maintaining stability and minimizing any disruption, ”Robinson said.

Marlborough Lines chief executive Tim Cosgrove says demand on electricity is increasing.

Brya Ingram / Stuff

Marlborough Lines chief executive Tim Cosgrove says demand on electricity is increasing.

Marlborough Lines chief executive Tim Cosgrove said divestment of part of Yealands Wine Group would help Marlborough Lines to work towards a zero carbon future, and provide sustainable dividends for regional growth, he said.

“The energy landscape is rapidly changing. Marlborough Lines has an important role in supporting our region’s transition to a zero-carbon economy. We’re already seeing increasing demands from electric vehicles, ferries, and local industry and significant investment is needed to build the energy capacity and resilience needed to power a sustainable future for the region. “