Treasury Wine Estates has entered a water licence sale and leaseback agreement with Duxton Water for $39.1 million. The deal encompasses 4770 megalitres (2799 megalitres of high security and 1971 megalitres of high reliability) of permanent water entitlements associated with vineyards it is looking to offload.
The sale is conditional on TWE selling the vineyards. If sale agreements are not signed by 30 September or completed by 14 June 2024, then TWE can buy the water entitlements back from Duxton Water at market price. The leasing agreement can be taken over by the purchaser or cancelled.
TWE has negotiated a long-term leaseback for 3816 megalitres.
For Duxton Waters, the acquisition is a significant growth opportunity to scale its portfolio during a time of climate unpredictability. It increases the company’s total water portfolio by six per cent, with the company also announcing a capital raise to fund the purchase.
Duxton Water said it meant farming businesses could “unlock their balance sheets, reinvest capital into their land and production assets, all while maintaining access to water over the long term”.
