Seppeltsfield, the 167-year-old Barossa winemaker best known for one of the country’s most expensive wines, the 100-year-old Para Tawny, has taken a strategic stake in the ASX-listed spirits business Australian Whisky Holdings (ASX:AWY).

The privately-owned wine business has converted loans to AWY into equity.

Australian Whisky Holdings is embarking on a plan to expand production at its newly acquired Tasmanian distiller Nant by 75 per cent and last week won approval for a takeover of Lark Distillery.

Australian Whisky (ASX: AWY) bought Nant for $1.7 million last year after the Tassie spirit maker fell into receivership.

The winery has been undergoing a major renaissance since it was purchased from the Foster’s Group in 2007, with major upgrades to the historic venue, and a range of still wines returning to the stable this year.

Last year Seppeltsfield’s majority shareholder and managing director Warren Randall opened a massive $75 million ‘chateau’ in China as part of a joint venture with the Minquan Jiuding Wine Company, a former state-owned wine and spirits producer now owned by a major construction company.

Seppeltsfield has large export contracts to China, which it believes offer opportunities with AWY for international expansion into Asia.

“Australian Whisky Holdings has a great product range across their brands and we are delighted to have a strategic investment in the company,” Randall said

“We look forward to exploring the working relationship between the two companies and assisting in expanding AWY’s international distribution channels.”

The winery also already supplies aged sherry and port barrels to the whisky industry. Randall says he sees “further synergies are achieved between Australian whisky and Seppeltsfield as these barrels are important to the production and ageing of single malt whisky”.

Australian Whisky Holdings has been on a rapid expansion over the last year after buying the assets of the failed Nant Distillery in Bothwell, Tasmania.

Late last month, it achieved a successful takeover of the country’s first whisky distillery, Lark, in Hobart, established in 1992.

The business also has stakes in boutique distiller Overeem, Forty Spotted gin and an interest in the Old Kempton Distillery.

AWY shares are up more than 7% today to 45 cents on the news.

 

This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.