Australian Vintage cancels lease for Riverina vineyard

Australian Vintage (ASX: AVG) has announced the end of its long-term lease for the Balranald vineyard in the Riverina, New South Wales, seven years before the lease was due to expire.

The Balranald vineyard is owned by Belvino Investments, and produces between 11,000-13,000 tonnes annually.

The lease was due to expire following the completion of the 2031 vintage, and according to Australian Vintage’s statement to the ASX, both parties have made the decision to prematurely conclude the lease “collaboratively”.

“Exiting the Balranald Vineyard lease provides AVG flexibility in its sourcing strategy in a changing consumer environment. In addition, net cash flow benefit totals $12.6 million over the remaining lease term,” AVG said in its ASX statement.

“AVG and Belvino have committed to redeveloping other vineyards leased by AVG, including the Qualco and Jubilee Vineyards, maximising the combined return from these important assets.”

The lease termination is expected to be effective 26 June 2024, corresponding with the expected sale of the vineyard.

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