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in the west today

  1. johnnyr

    1,217 Posts.

    Clamp on Tuart in exchange for $1.3m

    By John Phaceas

    STRICKEN vineyard manager and explorer Tuart Resources has been placed in voluntary administration to enable it to finalise a recapitalisation strategy proposed by specialist corporate resuscitators, Ascent Capital.

    Suspended at 0.3¢ a share since July, Tuart yesterday disclosed it had accepted an offer from Ascent to inject more than $1.3 million into the company.

    However, Tuart said Ascent had requested it be placed in administration as a condition of the proposal going ahead.

    John Carello, of PKF Chartered Accountants, was subsequently appointed administrator yesterday, while managing director Bob Hendrie and non-executive director Eddie Saunders resigned from the Tuart board.

    Under the proposal, Ascent will receive 113.2 million Tuart shares (equal to 15 per cent of its share base) ahead of a one-for-30 share consolidation. Existing investors will also receive free converting shares on a one-for-one basis, which will convert should Tuart attain full control of its 60 per cent-owned Preston Vale vineyard at Donnybrook.

    Controlled by brothers David and Gary Steinepreis and their business partner Hugh Warner, Ascent has revived a number of failed companies, including Vostech, Triton Corp and Smart World.

    Post consolidation, Ascent and its nominees will receive an extra 55 million shares for $55,000 and be granted approval to place 130 million shares to raise another $1.3 million.

    All of Tuart's assets and liabilities allocated to its creditors are to be placed in a trust, to speed up Tuart's eventual release from administration.

    Tuart's chairman, lawyer Martin Bennett, said Ascent intended to raise additional equity as soon as Tuart was released, and that Ascent's proposal represented "the best opportunity" for Tuart shareholders to rebuild value in their company".

    Mr Bennett said the need to recapitalise Tuart had become more urgent since Christmas, when creditors of subsidiary Southern Wine Corporation endorsed a deed of company arrangement, also proposed by Ascent, which needed to be ratified by September 28.

    Tuart's problems stem from its disastrous $37 million scrip takeover of the Nelson Ridge wine group in 2000, which gave it control of Preston Vale and the nearby Diamond Ridge vineyard.

    January 14, 2003

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