NAB Extends Debt Facilities to Casella

National Australia Bank has extended a lifeline to struggling Casella Wines as negotiations continue between the family-owned winery and its lender.

The bank is reportedly negotiating with Casella Wines regarding future loan covenants. John Casella, the chief executive of the winery, said the family is looking into different opportunities to boost the business in the next few years. These may include releasing a line of premium wines that would sell around $50 to $100 per bottle.

Casella said coming out with luxury and premium wines would bring in new revenue for the company. The winery has been famous for its Yellow Tail wines, which sell for $10 and under.

Casella expressed confidence on what NAB is doing and how it is looking after the interest of the winery. He added that Casella Wine and NAB are working together to ensure that there would not be any crisis in the near future.

January 31 is the initial deadline of Casella Wines to renew its debt facilities. These, however, were extended by NAB.

This is the first time that the winery posted a loss in 20 years of operations. It recorded a loss of some $30 million for the financial year of 2011 to 2012. Casella Wines said the revenue drop was because of the high Australian dollar.

75 percent of Casella Wines’ business is hinged on exports to the US and the high Australian dollar has negatively impacted the business.

The new range of premium and luxury wines is expected to be out in the next one to two years.