Cape Town - DGB, the wine and spirit producer and distributor, had acquired the Boschendal wine business, including the wine brand, winery, cellar, production facilities and the cellar-door wine tasting and sales centre on the farm, for a "considerable sum of money", chief executive Tim Hutchinson said on Friday.
The estate, which has produced wine since 1685, stretches from the Simonsberg to the Groot Drakenstein mountains.
The vineyards take up more than 344ha and yield 250 000 cases of white and red wine a year. The winery was voted South African wine producer of the year at London's International Wine and Spirit Competition 2004.
Boschendal, the owner of the 2 240ha estate, would continue to manage the vineyards. In terms of a supply agreement, the two teams would work with the Boschendal viticulturist, wine makers and vineyard management team, Hutchinson said.
"In the United Kingdom, South Africa's biggest export market, a very small share of South African wines are sold above the £6 price point. I believe that Boschendal, which sells about 40 000 cases in the UK, is a brand that could well lead South Africa in the £7 to £20 category."
The company's big advantage was that it already exported two and a half million cases and was opening its own business in the UK. It already had a company in the US so it had an established distribution infrastructure internationally.
Asked about the R460 million lifeline that specialist banking group Investec had thrown last week to mining magnate Brett Kebble's JCI, which is a Boschendal shareholder, Hutchinson said it had nothing to do with DGB, which had done a transaction with Boschendal's holding company.
It was reported that loan finance was agreed last Tuesday and was secured by assets that would be housed in a separate company.
This special-purpose vehicle would hold Western Areas stock bought by JCI as a result of underwriting the share offer; shares JCI owns in Simmer & Jack and Matodzi Resources; the Letseng diamond mine in Lesotho; a portfolio of Cape Town properties; and a half-share of the Boschendal wine estate.
Clive Venning, the chief executive of Boschendal, also declined to say how much the business was sold for.
Asked about the Investec loan to JCI, Venning said the loan would not affect the holding company because Kebble's JCI-related company had given a R60 million loan to Kovac Investments, a consortium of black-owned companies which, with Chris Nissen as chairman, had bought a 30 percent stake in the holding company.
As far as he was aware, Kovac was not at risk because of the Investec loan to JCI as JCI could not put up Kovak's shares as security for the loan.
"It's an unsecured subordinated loan and at this stage I am not nervous that the JCI-related company could seize the shares of Kovac."
Anglo American Farms announced in December 2003 that it had sold Boschendal to a consortium. The majority stake was bought by an international investment consortium, Citation Holdings, registered in Luxembourg and led by Venning and Charles Boswell.
At the time Nissen said the R60 million that Kovac paid had been raised through loans raised from a JCI subsidiary in an arm's-length transaction.
Brett and Roger Kebble were not involved in the deal. Nissen could not be reached for comment on Friday.
-Ronnie Morris and Sherilee Bridge