Evans
and Tate, which revealed severe working capital problems, surging stockpiles of
wine and a cash flow crunch, has all but handed over its running to the 333
Performance Management group, which is part of the KordaMentha gang of
accountants whose major business is company administrations.

It’s
now obvious that all budgets, capital spending, marketing costs and strategy
will have to be signed off by the mob from 333 Performance Management before
Evans and Tate will be allowed to implement them. That
sounds like administration, or at least a form of it to me. At best it’s a “corporate work out.”

333
Performance Management was bought into Evans
and Tate on 1 June by the company’s banker, the ANZ. That
was a fact the company and its then executive Chairman, Franklin Tate didn’t
mention for four weeks until it revealed a multi-million dollar inventory
blow-out and write-downs as well as a probable extra loan from the ANZ Bank.

The loan has now come through and been boosted to $10 million from $8.5 million, as this
statement shows.

But
it’s come at a big price. Franklin Tate loses the executive chairmanship with the
role being split into two: a non-executive chairman, Tate, and a CEO who is still to
be found. This is a curious state of affairs given that Tate doesn’t lose his
present position until a chief executive is recruited. Two
extra non-executive directors will be appointed (one was named yesterday).

The
news boosted Evans and Tate shares 3.5c to 47c yesterday.

The
fact that 333 Performance Management is remaining in the company
– working on budgeting, inventory management, business efficiencies and
corporate
strategies – flies in the face of a comment Tate made to a
shareholders
tele-conference 12 days ago, when he said that once 333 had finished its
work
“there’s no further role for 333 communicated to the company as desired
by
the bank, and the company for its part has not contemplated any
extended
role.”

Wrong
again. 333 remains in place as the bank’s advisers and de facto administrators,
making sure the $10 million is spent wisely. There
are $20 million convertible notes to mature in 2007; what price that
happening?