Top Shelf International sells off agave farm for $5m to combat debt

April 15, 2024
By Cody Profaca

Top Shelf International, owner of Queensland’s Act of Treason agave spirit, has announced a $5 million sale and leaseback deal on its Eden Lassie agave farm. 

The sale, first outlined in an announcement to the ASX on Friday April 12, will apply only to the farm itself and excludes the attached distillery and equipment.

“The agreed sale does not include the agave farm’s distillery plant & equipment assets or agave plants.,” said the ASX announcement.

“Proceeds from the proposed sale, after transactions costs, will used by the Company for working capital purposes, including for further reduction of debt.”

The transaction follows on from a reported net loss of $48.3 million in FY23, and will be conducted in accordance with binding terms inclusive of: 

  • “Total purchase consideration of $5.0 million;
  • initial 10 year term with option to extend for a further 5 years;
  • commencing lease cost of $0.5 million per annum, and
  • the right for the company to repurchase the assets at any future date for a minimum of $6.5million.” 

“As previously disclosed, the Company has been investigating a sale & leaseback transaction as part of its capital strategy that previously contemplated the sale of its agave distillery plant & equipment assets, in addition to land assets,” continued the announcement.

“The agreed sale of only the agave farmland and structural improvement assets enables the Company to retain full ownership and control of the agave agronomy activities and distillery operations.”

Top Shelf has said that it has executed the binding term sheet with an entity related to non-executive director Stephen Grove. The sale remains subject to shareholder approval at an upcoming Extraordinary General Meeting.

The transaction is expected to be completed by late next month May 2024. 

In January this year, Top Shelf’s Australian agave spirit brand Act of Treason sold out its first release, the First Harvest Blanco, within 24 hours of being on sale. It indicated at the time that more product would soon be made available to the Australian market. 

“Act of Treason symbolises the pioneering spirit of a project that will create a new region of agave spirit,” said Top Shelf International CEO Trent Fraser.

“The dry tropics of north Queensland are the ideal place for that to occur.” 

The first of its kind on the market, the Top Shelf International brand has functioned as a proof of concept in a market that IWSR analysis believes will grow at a CAGR of 7-9% up until 2027. 

“We’re approaching this as an opportunity to create something new and expand the horizons of a category that has been geographically limited for centuries,” said Fraser.

“There was an overwhelming response to the first release of Act of Tequila. The next batch will be available very, very soon!”

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