Vintage Wine extends forbearance, defers principal payment to May 15

By Mary-Katherine Stinson

Lexington, Ky., April 3 – Vintage Wine Estates, Inc. amended its forbearance agreement dated Feb. 28 to extend the forbearance period and defer the $10 million principal payment to May 15, according to a press release.

The original forbearance period was to end on March 31, which was also the date that the principal payment was due.

“We are continuing productive discussions with our lenders as we work to advance potential asset sales, the monetization of inventory and cost reductions. We believe we have presented a viable business plan that transforms VWE into a much simpler business focused on a sustainable core of Super Premium+ priority brands which, importantly, can generate cash. The extension of the forbearance agreement provides additional time for further discussions with the lenders regarding an amended lending agreement as we execute on our plans,” chief financial officer Kristina Johnston said in the release.

The agreement pertains to the company’s second amended and restated loan and security agreement dated Dec. 19, 2022 with BMO Bank NA as administrative agent.

The agent and lenders have agreed to forbear from enforcing their rights and remedies in respect of certain events of default under the loan agreement through the forbearance period so long as no further event of default occurs and the company and borrowers comply with the terms.

As previously reported, the original agreement reduced revolving commitments by $20 million to $180 million but permitted continued borrowing; increased during the forbearance period the interest rate for revolving loans by 100 basis points; provided that during the forbearance period the borrowers will not maintain cash in excess of their projected needs, with any excess to be used to pay down revolving loans; required compliance with some specified milestones related to business planning; and required payment of certain fees, including a one-time payment of 7.5 bps to the agent for the benefit of the consenting lenders.

The family of wineries and wines is based in Incline Village, Nev.

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