Lark Distilling Co. has unveiled a strategic partnership with Seppeltsfield Wines, granting the distillery exclusive access to premium oak barrels essential for its maturation needs. This collaboration, formalized through a 10-year agreement with an option for a further 10-year extension, aims to secure Lark’s future in both domestic and international markets.
As part of the partnership, Lark will engage in a $15 million conditional share placement with Seppeltsfield Wines, whose notable stakeholders include Lark Director Warren Randall ($14.5 million), Domenic Panaccio ($250,000), and David Dearie ($250,000). Additionally, Lark is pursuing an unconditional institutional placement at $0.85 per share to raise approximately $6.5 million and a non-underwritten share purchase plan (SPP) with a goal of $1 million.
Lark’s CEO, Sash Sharma, highlighted the significance of the partnership, stating, “This milestone will provide us with the resources needed to produce exceptional whisky and invest in our brands, facilities, and production capabilities. Our goal is to accelerate growth and enhance shareholder returns.”
Sharma emphasized that the partnership with Seppeltsfield Wines would secure access to high-quality barrels, thereby enhancing Lark’s competitive edge and supporting the company’s future portfolio expansion. The investment will also bolster Lark’s marketing efforts, global appeal, and cellar door experience in Hobart, while expanding the Pontville site for increased production and storage capacity.
In a separate update, Lark reported a decline in net sales revenue for the fourth quarter ending June 30, 2024, with figures of $3.3 million for the quarter and $14 million for the fiscal year, marking decreases of $700,000 and $3.1 million, respectively, compared to the previous period. The decrease was attributed to a slowdown in the Chinese Indirect Export channel, softer domestic B2B market conditions, and challenges at Lark hospitality venues. However, direct export, global travel retail, and e-commerce sales showed improvement.
Sharma noted, “Our direct export sales for the quarter were encouraging, and we are preparing for launch events in Singapore and Indonesia to bolster our presence in these markets.” He also mentioned ongoing work with the new domestic distribution partner, Spirits Platform, and the appointment of a global creative agency, LOVE, to support Lark’s brand and portfolio restage.
The conditional share placement is pending shareholder approval, which will be sought at an extraordinary general meeting scheduled for late August or early September.
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