Gaucho Group Holdings Inc VINO is planning to list two of its retail properties in Argentina, in San Rafael and Cordoba, for sale, priced at $2 million and $0.7 million respectively.
The company is considering the strategic move in order to accelerate the stockholder value.
The divestment of these real estate assets will help the company to focus on its primary ventures, notably Algodon Wine Estates, which has a revenue potential of about $80 million in the coming years.
If the sale is successful, Gaucho expects to use the proceeds for debt reduction.
The revenue recognition from the real estate project’s deeding will occur in 2025.
Gaucho expects FY23 revenues to exceed $6 million, of which the primary catalyst would be the vineyard estate lots at Algodon Wine Estates.
Algodon’s remaining 450 lots that are available for purchase could fetch the company about $80 million - $100 million in revenue in the coming years.
On the political front, Gaucho said should the elections yield results supportive of foreign investment, it may pave the way for a more stable business climate.
“Gaucho Holdings’ portfolio is comprised of substantial real estate assets. We perceive a notable disparity between our company’s current market capitalization and its intrinsic value. Our job is now to close that gap,” said Founder, CEO and Chairman of the Board of Directors Scott L. Mathis.
“By divesting some of these non-core real estate assets, we can channel our energies more effectively towards our mainstay ventures.”
Gaucho includes a collection of e-commerce platforms with a concentration on fine wines, luxury real estate, and leather goods and accessories.
Price Action: VINO shares closed lower by 8.70% at $1.89 on Tuesday.
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