New Asset Based Lending Facilities and RPT

RNS Number : 6017O

Gusbourne PLC

02 June 2020

 

2 June 2020

Gusbourne Plc

("Gusbourne", the "Company" or the "Group")

New £10.5 million Asset Based Lending Facilities and Related Party Transactions

Gusbourne (AIM: GUS) is today pleased to announce that it has entered into a £10.5 million asset-based lending facility with PNC Financial Services UK Ltd ("PNC"). The new facility will be used to refinance certain existing debts, provide additional liquidity for the Company and to provide long term finance to the Company at a competitive rate. The Company is also pleased to announce part repayment of loans to related parties of the Company and a term extension and a refinancing of the remaining related party loans outstanding.

The PNC   Asset Based Lending Facility

Gusbourne Estate Limited, a subsidiary of the Group, has entered today into an agreement with PNC Business Credit a trading style of PNC Financial Services UK Ltd for up to £10.5m of asset-based lending facilities. (the "PNC Facilities"). The PNC Facilities will primarily be used to provide working capital for the Group. It will also be used to refinance certain existing loan facilities.  

The PNC Facilities will be provided on a revolving basis over a minimum period of 5 years and allow flexible drawdown and repayments in line with the Company's working capital requirements. The interest rate will be at the annual rate of 3 per cent over the Bank of England Base Rate. The facilities will be secured by way of first priority charges over the Company's inventory, receivables and freehold property as well as an all assets debenture.  

On completion the Company expects to drawdown approximately £4.6m of the PNC Facilities with approximately £2.1m being used to repay the existing secured Barclays bank facilities in full, £1.3m will be used to repay a director loan and a shareholder loan and £1.2m will be used for working capital. Further drawdowns will be made from time to time in line with the needs of the business.

The use of asset based lending is widely used by vineyards across the world. The Directors believe that securing the PNC Facility, especially during the current difficult Covid-19 environment, is an important milestone for the maturity of the Gusbourne business and reflects the growth of the Company over the past five years. 

Related Party Transactions

The Company currently has related party loans outstanding with Paul Bentham, a Non-Executive Director of the Company, and Lord Ashcroft, a substantial shareholder in the Company, totalling £3.5m including interest. This finance was provided by both individuals through associated corporate vehicles to fund the ongoing working capital requirements of the Company at a time when limited alternative finance was available to the Group. As Gusbourne grows and matures as a business, the independent Directors of the Company, being those Directors who have not provided loans to the Company, believe it is appropriate to re-pay these loans at the earliest possible opportunity.  

Of the £1.3m drawdown at completion to part repay certain related party short term loans, £0.8m will be used to part repay a short term loan of £1.25m received on 23 December 2019 from Franove Holdings Limited ("Franove"), a company wholly owned by Paul Bentham. A further £0.5m will be used to part repay a short-term loan of £2.0m received on 31 May 2019 from a company controlled by Lord Ashcroft. Both short term loans currently bear interest at 15% per annum and are unsecured.

Following these repayments Franove has agreed to extend the repayment date of its outstanding loan of £0.5m to 15 August 2021, at the same 15% rate of interest, with the loan becoming secured behind PNC at the same ranking as the existing outstanding bonds issued by the Company. The Company has also agreed with Franove that in the event it seeks to repay its related party loans further, the repayment of Franove will take priority.  

The remaining Lord Ashcroft loan of £1.7m will be refinanced, by a company controlled by him, with a new deep discount bond maturing on 15 August 2021 and with a coupon of 15% per annum rolled quarterly and secured behind PNC at the same ranking as the existing outstanding bonds issued by the Company.

These variations to the loans, as set out above, constitute related party transactions under Rule 13 of the AIM Rules. The Directors of the Company (excluding Paul Bentham), having consulted with Canaccord Genuity Limited in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

Charlie Holland, Chief Winemaker and Chief Executive Officer commented:

We are delighted to have secured significant asset-based financing facilities from PNC and which aligns with the working capital requirements of the business. We are pleased to welcome PNC as a key stakeholder and look forward to working with them as we continue to develop our business over the coming years.

For further information contact:

Gusbourne Plc Charlie Holland	[phone]
Canaccord Genuity Limited Bobbie Hilliam Georgina McCooke	[phone]

Note: This announcement and other press releases are available to view at the Company's website:  www.gusbourneplc.com

Note to Editors

Gusbourne PLC ("the Company") is engaged, through its wholly owned subsidiary Gusbourne Estate Limited (together the "Group"), in the production and distribution of a range of high quality and award winning English sparkling wines from grapes grown in its own vineyards in Kent and West Sussex. The majority of the Group's mature vineyards are located at its freehold estate at Appledore in Kent where the winery is also based.

 

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