Indage Vintners, India’s best-known wine producer, is fighting for its life after being issued with a winding-up order in Bombay’s High Court.
The company, formerly known as Champagne Indage, has total debts of about INR4bn (£59m), according to the court, and assets of only INR2.76bn.
A group of unsecured creditors, owed a total of INR2bn, secured a winding-up order in the High Court, but Indage was then given a two-week stay of execution pending a meeting of its lenders next Monday.
The company said it was ‘not expedient’ to wind up the business, adding that its plans for financial restructuring would ‘find an amicable solution’ to meet its obligations and satisfy its creditors.
Indage has been hit hard by the economic downturn of the past 18 months, following a period of expansion in which it borrowed heavily to fund overseas acquisitions.
It bought a number of Australian wineries, including Tandou, Vine Crest and Loxton, in 2007 and 2008, also adding UK distributor Darlington Wines and bottling company Corby Bottlers to its portfolio.
But the financial crisis forced the company to drastically scale back its operations in 2009, amid reports that its share of the Indian wine market had more than halved to less than 20%.
Indage’s sales plummeted to INR138m in the nine months to the end of 2009, compared to sales of INR1.4bn in the same period the year before.
The company posted a loss of INR483.7m over the same period, compared to a profit the year before of INR183m.
Written by Richard Woodard