in the west today-a little hiccup IMHO

  1. 1,219 Posts.
    Share snag puts Tuart into limbo

    By John Phaceas

    THE future of embattled explorer and vineyard manager Tuart Resources remains in the balance, after revelations that a mooted $300,000 placement to a Sydney company is unlikely to proceed, despite winning the approval of angry shareholders at a general meeting yesterday.

    After a fiery morning meeting was adjourned to enable chairman and lawyer Martin Bennett to meet court obligations, investors were told that the planned issue of 300 million shares at 0.1¢ to Sydney-based Digital Factory - ratification of which topped the agenda - was in doubt.

    Mr Bennett said Digital Factory remained interested in Tuart, but the company was not prepared to invest any money until measures to restructure the group's loss-making vineyards at Donnybrook had been implemented.

    "(Digital Factory) are not gone, they're not out of the running yet, but they're not in," Mr Bennett told shareholders. "And they are not going to come in on the equity side until they see the vineyards have been fixed."

    But that could not occur until Tuart had sufficient funds to survive.

    "(So) we need to allot shares to raise sufficient capital essentially for the company's continuation before we can even look at fixing the vineyards as such," he said.

    Though the Preston Vale and Diamond Ridge properties are among the biggest in WA, a shortfall between their operating costs and fees from investors in two overlying managed investment schemes have compounded the effect of collapsing grape prices and lost offtake agreements, culminating in a $31.4 million loss for 2001-02.

    Growers have so far refused to make up the shortfall and, with both assets in the hands of receivers, Tuart is now seeking the liquidation of both schemes to leave it as the controlling landowner.

    On the positive side, Mr Bennett said negotiations were under way with another unnamed party to invest on identical terms to Digital Factory, for which approval was also granted at yesterday's meeting. Moreover, the ratification of additional placements to committed parties would raise almost $580,000 to repay debt and provide additional working capital.

    Both were vital steps in giving the company breathing space to address its problems, he said.

    The mood of the afternoon meeting was surprisingly subdued, with only a handful of questions levelled at Mr Bennett.

    Earlier in the day, investors' anger boiled over when told that Mr Bennett would not be available to front shareholders until after lunch, forcing a poll on a motion to adjourn.

    Shareholders who had bought into the company at 20¢ during its mid-2000 float then called for the heads of managing director Bob Hendrie and director Eddie Saunders for presiding over the stock's decline to just 0.3¢ before it was suspended in July.

    P.S. no mention in here about the Bankwest interest`s in the vineyards

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