An equity raise by Tasmanian whisky distillery, Lark Distilling, will see Seppeltsfield Wines, owned by Lark director Warren Randall, jump from a 3.8 per cent stake in the company to 19.5 per cent, just shy of the 19.99 per cent needed under takeover rules.
Seppeltsfield will put $14.5 million into Lark in a strategic partnership whereby it would exclusively provide the whisky maker with premium oak barrels for the next 10 years, with a 10-year option to extend by Lark.
The conditional placement was 85 cents per share, with Domenic Pannaccio and David Dearie also putting in $250,000 each.
Lark said its planning an unconditional institutional placement at the same share price to raise around $6.5 million and a non-underwritten share purchase plan to raise up to $1 million, with those funds providing working capital for the next two years.
Lark CEO, Sash Sharma, said the partnership was a significant milestone for the company.
“This, in addition to the equity raise being undertaken, will equip Lark with the resources to continue to produce exception whisky while providing the balance sheet flexibility to invest in our brands, facilities, and distilling production.
“In providing security of access to some of the world’s highest quality barrels, the strategic partnership with Seppeltsfield creates further competitive advantage for Lark in an integral part of our whisky making process. It also lays a solid foundation for Lark’s future portfolio and brand offerings.”
The announcement followed Lark’s release of its FY24 unaudited results. Net sales were down $3.1 million on FY23 to $14 million but in-line with the company’s previous market update.
EBITDA was $(2.8), gross margin around 68 per cent, and a whisky bank of 2.5 million litres.
Manufacturing and operating costs were down $0.6 million versus Q4FY23 to $1.7 million from cost saving measures and consolidating distilling production at its Cambridge site.
Sharma said, “In line with our strategic priority to build long term brand value, work has a commenced on our Brand & Portfolio restage, we have appointed LOVE, a high-quality global creative agency, experienced in the Luxury alcohol space.
This exciting workstream will support our global expansion ambitions, positioning Tasmania as the epicentre of new world whisky, with Lark as the differentiated leader.”
Earlier this month, Seppeltsfield acquired the 230-acre Lyndoch winery from Australian Vintage.
