Facility Expansion

    RNS Number : 2349V
  Cosentino Signature Wines plc
  27 May 2008
   

    27 May 2008


    Cosentino Signature Wines plc ("Cosentino" or "the Company")

    Napa Valley facility expansion

    Cosentino Signature Wines plc, the AIM listed, ultra-premium brand Napa Valley based wine company, is pleased to announce a proposed
expansion of its premier Napa Valley production facility.  

    The Company has begun the planning process to increase its Production Use Permit on its Yountville, Napa Valley facility from its
current 12,000 case production limit to 40,000 cases. The approval process with the County of Napa is estimated to take between six months
to a year and requires certain regulatory and governmental consents and will also be scrutinized at a public hearing. Once the increased
permit is obtained, the Company plans to construct an extension to its existing production facility. Completion of the construction phase is
currently targeted for the 2009 crush season (August/September, 2009).

    The Company believes that it currently has a rare opportunity to proceed with the expansion project.  The new use permit will allow the
Company, for the first time in its history, to have the opportunity to produce more than 12,000 cases of luxury wines in its primary
facility. This would allow the Company to focus on the expansion of its most prestigious and popular wines, all in the luxury segment, the
fastest growing and highest margin segment in the industry. These include such wines as the Poet, MCoz, Sculptor and the CE2V wines; Napa
wines are the Company's highest value and most profitable.  The permit will provide the Company with the opportunity to more than triple its
volume of Napa wines over the next five years, as well as save on its production costs.

    To accommodate this anticipated growth in Napa wines,  the Company has secured a new interim bridge $5m credit line which will be used
for the construction of the new facility and will provide the required working capital to support the increased size and production
capacity. The $5m interim line is available to the Company for a period of two years at a fixed rate of 12% on the outstanding borrowings
and the Company plans to refinance this subordinated debt at the completion of the construction, which should coincide with the maturity of
the debt.

    Larry Soldinger, Chairman of Cosentino commented:
    "We are very excited to begin this planning process to increase our Yountville facility production. We feel that we now have a very rare
opportunity to expand the production of our prestigious Napa Valley wines and to do it at our flagship winery, Cosentino.  With our interim
funding now in place, we have the ability, subject to County approval, to expand our business in a direction that we had previously believed
would not be possible without great expense to the Company or through an acquisition.  

    "This new focus on the potential expansion and growth of our Napa wines is a change in direction of the Company from primarily having
the ability to expand only in our non Napa wine portfolio. After all, the best wines in the world arguably come from Napa Valley and
Cosentino has always been known for making among the best wines in the world. We therefore need to take advantage of this wonderful
opportunity."

    - Ends -

    For further information please contact:
    Cosentino Signature Wines plc
    Larry Soldinger, Chairman                                                    020 7831 3113
                                
    Financial Dynamics
    Jonathon Brill / Billy Clegg / Ed Westropp                            020 7831 3113

This information is provided by RNS
The company news service from the London Stock Exchange
 
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