Vintage Wine Estates Inc. has filed for Chapter 11 bankruptcy, as the wine industry is facing troubles in the stock market due to low demand. Competitors saw a slight rise in the share price of up to 1 percent after the major wine conglomerate announced that it would file for bankruptcy and had sold one of its wineries for cash to pay part of its debts.
VWE, America’s fifteenth-largest wine producer, also announced that it would voluntarily delist from the stock market. The company went public in 2020, and its price per share was $0.066 on July 25, mid-afternoon. The Duckhorn Portfolio Inc. saw a 0.42 percent rise in its share price, while Constellation Brands Inc. saw its stock price rise by 0.54 percent then.
In a press release on Wednesday, the Santa Rosa, California-based company announced it had filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware.
The company said it sold its Cosentino Winery to Gene Wines, an LLC in California. Vintage Wine Estates also noted that the $10.5 million received from the winery sale would go towards paying its debts.
Vintage Wine Estates also owns brands such as B R Cohn, Girard, Clos Pegase, and Viansa. In the filing, the company said it would sell all or almost all its assets, for which it has received interest from several buyers.
VWE has wineries in Napa, Sonoma, the central coast of California, Oregon, and Washington State. In 2021, it spent vast sums of money acquiring businesses such as Kunde Family Wines, Vinesse Wines, Sommelier Company, and Ace Premium Craft Ciders.
In January, VWS began its restructuring process. It cut its workforce by roughly 15 percent and saw an annual savings of $7 million. However, the company still has massive debts. It has applied for Chapter 11 bankruptcy.
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