Open Offer

RNS Number : 1988H

Gusbourne PLC

06 June 2017

 

6 June 2017

This announcement is for information purposes only and does not itself constitute an offer for sale or subscription of any ordinary shares or other securities in the capital of the Company. This announcement has been issued by and is the sole responsibility of the Company.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES"), CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

Gusbourne Plc

("Gusbourne" or the "Company")

Open Offer of up to 10,506,560 new Ordinary Shares at 40 pence per share

The Company is pleased to announce an underwritten Open Offer to its Shareholders to raise £4,202,624, before expenses at 40p per share.

Highlights

·     Open Offer to Qualifying Shareholders to raise up to £4,202,624

·     Open Offer  is underwritten by Lord Ashcroft KCMG PC

·     4 Open Offer shares for every 9 Existing Ordinary Shares at 40 pence per share

·     Opportunity for Qualifying Shareholders to acquire Excess Shares if available

·     Current trading in line with management expectations and development plans remain on course

·     Sub division of Ordinary Shares of 50p each into ordinary shares of 1p each and deferred shares of 49p each

A circular (the "Circular") setting out details of and the terms relating to the Open Offer is being posted to Shareholders today, together with the Application Form, Form of Proxy and  notice of a General Meeting to be held at the offices of Cenkos Securities plc at 10.30a.m on 29 June 2017. These documents are also available to view on the Company's website, www.gusbourneplc.com

The timetable of expected events, key statistics and definitions sections are set out in Appendices 1, 2 and 3 respectively of this announcement.

Introduction

The Board announces that the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of up to 10,506,560 new Ordinary Shares, to raise £4,202,624 before expenses, with a basic entitlement of 4 new Ordinary Shares for every 9 Existing Ordinary Shares, at 40 pence per share, payable in full on application.

The Issue Price is at a discount of 31 per cent. to the closing middle market price of 58 pence per Existing Ordinary Share on 5 June 2017 (being the last practicable date before the announcement of the Open Offer).

The Open Offer is underwritten by Lord Ashcroft KCMG PC who may procure placees for shares for which he would otherwise subscribe pursuant to his underwriting commitment.

Admission of the Open Offer Shares is expected to occur no later than 8.00 a.m. on 30 June 2017 (or such later time and/or date as Cenkos Securities and the Company may agree but not later than 28 July 2017).

The Open Offer is conditional on the passing of the General Meeting Resolutions.  As the Issue Price of 40 pence per Ordinary Share is lower than the current nominal value of 50 pence per Ordinary Share, the Open Offer will not be possible unless the nominal value is reduced. The Board therefore recommends that, pursuant to the General Meeting Resolutions, each Ordinary Share is, prior to the proposed allotment of shares pursuant to the Open Offer, sub divided into 1 ordinary share of 1 penny and 1 deferred share of 49 pence. 

The deferred shares will effectively have no rights and the Company will not issue any share certificates or credit CREST accounts in respect of them. The number of Ordinary Shares in issue, and held by each Shareholder, as a result of the passing of the General Meeting Resolutions will not change.

The Open Offer is independent of the Annual General Meeting and is not conditional on any resolutions being put to Shareholders at the Annual General Meeting.

Reasons for the Open Offer and Use of Proceeds

Gusbourne is one of England's premier sparkling wine businesses and the Company's development plans include the further expansion of production and sales of its award winning English sparkling wine products. The production of premium sparkling wine from new vineyards is by its very nature a long term project and requires funding to support the investment in new vineyards, additional winery capacity and stocks.

The Open Offer is expected to raise up to £4,202,624 before expenses. The proceeds from the Open Offer will be used for working capital, ongoing investment in the Gusbourne brand, and capital expenditure in line with the Company's long-term strategic plan. The long term development plans for the business will require further funding over the next few years before it reaches sales maturity and a growing level of investment in wine stocks will become an increasingly important feature of the Company's balance sheet. The Company will consider both further equity and debt funding to achieve its objectives and the Board continues to look for potential investors in either equity or debt.

Current Trading and Prospects

The Company today announced its final audited results for the year ended 31 December 2016. Within the results, the Company provided the following update on current trading.

The Group's trading in 2017 remains in line with expectations and its long term strategic development plan. Gusbourne's luxury sparkling wines continue to win new sales orders from an expanding base of valued customers both in the UK and overseas. We look forward in particular to the opening of our cellar door operations during the summer of 2017 and welcoming visitors to it.

The growing season in 2017 has started well although there has been some minor frost damage to our vines in both Kent and West Sussex because of an unusually cold spell at the beginning of the season. The vines will remain subject to the normal seasonal climatic and disease risks throughout the remaining part of the growing season.

Bond Conversion

On 2 September 2016 the Company issued Bonds at a subscription price of £4,073,034 and share warrants at a rate of one warrant for every £2 of the Bonds ("Warrants").

In order to strengthen the Company's balance sheet and increase the funding options available to it in the future the Company intends, shortly after the Company's Annual General Meeting on 29 June 2017, to offer holders of these Bonds the opportunity to convert all or part of their Bonds into Ordinary Shares in the Company at a conversion price of 40 pence per Ordinary Share, the same price as that offered to shareholders in the Open Offer.

If holders of Bonds opt to convert Bonds into ordinary shares in the Company, their Warrants will be unaffected.

A circular will be posted to holders of Bonds on or around the 30 June 2017 containing further details on the conversion of Bonds.

Principal Terms of the Open Offer

A total of 10,506,560 new Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price, payable in full on application. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to other Qualifying Shareholders under the Excess Application Facility.

Although Qualifying Shareholders can apply for as many Open Offer Shares as they wish, Qualifying Shareholders will receive an entitlement to apply for Open Offer Shares pursuant to the Open Offer at the Issue Price on the following basis:

4 Open Offer Shares for every 9 Existing Ordinary Shares

registered in their name on the Record Date. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be made available under the Excess Application Facility.

The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their respective Open Offer Entitlements provided they have agreed to take up their Open Offer entitlement in full. For the avoidance of doubt, Qualifying Shareholders with no Open Offer Entitlement (by virtue of their owning fewer than 9 Existing Ordinary Shares) may still apply for Excess Shares under the Excess Application Facility.

Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer. The attention of Overseas Shareholders is drawn to paragraph 7 of Part 3 of the Circular.

If there is a change in exchange rate between the date of the Circular and the date of Admission that would result in the gross proceeds of the Open Offer being EUR 5 million or more, the Company will scale back the Excess Application Facility then, if necessary, the number of Open Offer Shares to be issued pursuant to Open Offer Entitlements (on a pro rata basis).

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements as shown on the Application Form for certificated Shareholders. Applicants can apply for fewer or more than their entitlements under the Open Offer. Applications made under the Excess Application Facility will be allocated in such manner as Lord Ashcroft KCMG PC may determine in his absolute discretion and no assurance can be given that excess applications by Qualifying Shareholders will be met in full or in part or at all.Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST on 7 June 2017. The Open Offer Entitlements will be enabled for settlement in CREST until 3.00p.m. on 22 June 2017. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Open Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST application and payment in respect of the Open Offer is 11.00a.m. on 27 June 2017. The Open Offer is not being made to certain Overseas Shareholders, as set out in paragraph 7 of Part 3 of the Circular.

Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Open Offer Shares which are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of the Qualifying Shareholders who do not apply under the Open Offer. Any Open Offer Shares which are not applied for by Qualifying Shareholders under the Open Offer will, insofar as Lord Ashcroft KCMG PC does not exercise his absolute discretion to allocate such Open Offer Shares to, placees be issued by the Company to Lord Ashcroft KCMG PC, or an entity on his behalf, pursuant to the underwriting arrangement described in paragraph 7 of Part 1 of the Circular. The Application Form is not a document of title and cannot be traded or otherwise transferred.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part 3 of the Circular and on the accompanying Application Form.

The Open Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Open Offer Shares which are subscribed for to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 30 June 2017 at which time it is also expected that the Open Offer Shares will be enabled for settlement in CREST.

General meeting

A general meeting of the Shareholders is required in order for the Company to issue the Open Offer Shares. The General Meeting will be held at the offices of Cenkos Securities plc at 10.30a.m on 29 June 2017. A notice of the General Meeting, together with accompanying form of proxy have today been posted to Shareholders.

Irrevocable undertakings to vote in favour of the General Meeting Resolutions have been entered into by Lord Ashcroft KCMG PC and Andrew Weeber whose shareholdings in the Company are in aggregate 17,936,715 Ordinary Shares representing 75.9% of the Company's issued share capital.

Annual General Meeting

As Admission is to take place after the deadline for receipt of proxies in connection with the Annual General Meeting, votes may not be cast at the Annual General Meeting in respect of Open Offer Shares.

Related Party Transactions

Lord Ashcroft KCMG PC currently has a beneficial interest in 64.4 per cent. of the Existing Ordinary Shares. The Company has received a letter of intent from Lord Ashcroft KCMG PC stating that he will participate or, (in the case of Existing Ordinary Shares held on his behalf) procure that the relevant registered shareholder will participate in the Open Offer at least to the extent that his beneficial holdings of Ordinary Shares will be no less than 64.4 per cent. of the Ordinary Shares following the Open Offer.

Lord Ashcroft KCMG PC has agreed that, in consideration of the payment of a commission of 2% (plus VAT if applicable) of the maximum gross proceeds of the shares subscribed for pursuant to the underwriting commitment hereinafter described, and the payment of a management fee of £50,000 (plus VAT if applicable), in each case to Anne Street Partners Limited (a company in which Lord Ashcroft KCMG PC owns the whole beneficial interest), in the event that:

a)   subscribers are not obtained for all or any of the shares offered pursuant to their pre-emptive entitlements under the Open Offer by 11.00a.m. on 27 June 2017;

b)   subscribers are not obtained for all or any shares pursuant to the Excess Application Facility (with all such applications to be approved or otherwise, in whole or in part, by Lord Ashcroft KCMG PC); or

c)   any subscriber defaults on its payment obligations as set out in the Circular,

he will procure placees for, or will forthwith subscribe for, or will procure that an entity on his behalf will forthwith subscribe for, as principal, all of those shares offered pursuant to the Open Offer in respect of which subscribers or placees have not been obtained.

Furthermore, Belize Fiduciaries No 3 Limited, a Company controlled by Lord Ashcroft KCMG PC has provided a short term loan of £1 million to the Company on 6 June 2017. The amount of the loan together with interest on it shall be employed towards the subscription of shares by Belize Fiduciaries No.3 Limited under the Open Offer and the issue of the shares subscribed for shall constitute repayment of the loan in full. The loan is unsecured.

These commitments constitute related party transactions under Rule 13 of the AIM Rules for Companies. The Company's independent directors, being those not involved in the Open Offer as a related party, having consulted with the Company's nominated adviser, consider that the terms of these transactions are fair and reasonable insofar as its shareholders are concerned.

Directors' Participation in the Open Offer

The Company has been informed by each of Ian Robinson, Matthew Clapp, Lord Arbuthnot PC and Jon Pollard that they intend to accept their respective entitlements under the Open Offer in full.

Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons, (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward the Circular or the Application Form to such persons, is drawn to the information which appears in paragraph 7 of Part 3 of the Circular.

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including without limitation the United States of America), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Open Offer.

Action to be Taken

Qualifying non-CREST Shareholders wishing to apply for Open Offer Shares or Excess Shares must complete the Application Form which accompanies the Circular in accordance with the instructions set out in paragraph 4.1 of Part 3 of the Circular and on the Application Form and return it with the appropriate payment to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, so as to arrive no later than 11.00a.m. on 27 June 2017.

For further information contact:

Gusbourne Plc

Andrew Weeber                                                           [phone]                         

Cenkos Securities plc

Nicholas Wells / Callum Davidson                                 [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. The Group has a total of 231 acres of vineyards.

Appendix 1

Expected Timetable of Principal Events

Record Date for the Open Offer	5.30p.m. on 2 June 2017
Announcement of the Open Offer	6 June 2017
Ex-entitlement Date	6 June 2017
Posting of Circular and Application Form to Qualifying non-CREST Shareholders	6 June 2017
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders	7 June 2017
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30pm on 21 June 2017
Latest time and date for depositing Open Offer Entitlements into CREST	3.00p.m. on 22 June 2017
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00p.m. on 23 June 2017
Latest time and date for acceptance of the Open Offer and receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (if appropriate)	11.00a.m. on 27 June 2017
Latest time and date for receipt of proxy forms for General Meeting	10.30a.m on 27 June 2017
Latest time and date for receipt of proxy forms for Annual General Meeting	11.00a.m on 27 June 2017
General Meeting	10.30a.m on 29 June 2017
Annual General Meeting	11.00a.m on 29 June 2017
Announcement of result of Open Offer	29 June 2017
Admission and commencement of dealings in the	8.00a.m. on 30 June 2017
Open Offer Shares on AIM  Open Offer Shares credited to  CREST members' accounts	8.00a.m. on 30 June 2017
Despatch of definitive share certificates for Open Offer Shares in certificated form	by 14 July 2017

If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

Appendix 2

Key Statistics

Number of Open Offer Shares	10,506,560
Basic entitlement under the Open Offer	4 new Ordinary Shares for every 9 Existing Ordinary Shares
Issue Price	40 pence
Gross proceeds from the Open Offer	£4,202,624
Enlarged issued share capital following the Open Offer	34,146,322
New Ordinary Shares as a percentage of the Enlarged Share Capital	30.77%
Market capitalisation of the Company immediately following the Open Offer at the Issue Price	£13,656,529

Appendix 3

Definitions

"Act"	Companies Act 2006 (as amended)
"Admission"	to the extent that Qualifying Shareholders apply to subscribe for Open Offer Shares under the Open Offer, the admission of the Open Offer Shares subscribed under the Open Offer to trading on AIM
"AIM"	the AIM market operated by London Stock Exchange
"AIM Rules for Companies"	the AIM Rules for Companies and guidance notes as published by the London Stock Exchange from time to time
"Annual General Meeting"	the annual general meeting of the Company due to take place at the offices of Cenkos Securities at 11.00a.m on 29 June 2017
"Application Form"	the personalised application form on which Qualifying non-CREST Shareholders may apply for new Ordinary Shares under the Open Offer, which accompanies the Circular
"Barclays"	Barclays Bank plc
"Board" or "Directors"	the directors of the Company as at the date of the Circular
"Bonds"	bonds issued pursuant to the Deep Discount Bond
"Capita Asset Services"	a trading name of Capita Registrars Limited
"Cenkos Securities"	Cenkos Securities plc
"Company" or "Gusbourne"	Gusbourne plc
"Condition"	the passing of resolutions 1 and 2 of the General Meeting Resolutions at the General Meeting
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in the CREST Regulations)
"CREST Manual"	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since)
"CREST member"	a person who has been admitted to CREST as a system-member (as defined in the CREST Manual)
"CREST member account ID"	the identification code or number attached to a member account in CREST
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations)
"CREST participant ID"	shall have the meaning given in the CREST Manual issued by Euroclear
"CREST payment"	shall have the meaning given in the CREST Manual issued by Euroclear
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended)
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor
"CREST sponsored member"	a CREST member admitted to CREST as a sponsored member
"Deep Discount Bond"	the deep discount bond issued by the Company on 2 September 2016 with a final redemption date of 15 August 2021
"Enlarged Share Capital"	the entire issued share capital of the Company following completion of the Open Offer at Admission and assuming that the Open Offer is fully subscribed
"EU"	the European Union
"Euroclear"	Euroclear UK & Ireland Limited
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Open Offer Entitlements in accordance with the terms and conditions of the Open Offer
"Excess CREST Open Offer Entitlements"	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to an Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on taking up the Open Offer Entitlement in full
"Excess Shares"	Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer, being 6 June 2017
"Existing Ordinary Shares"	the 23,639,762 Ordinary Shares in issue on the date of this announcement
"FCA"	the Financial Conduct Authority of the UK
"FSMA"	Financial Services and Markets Act 2000 (as amended)
"General Meeting"	the general meeting of the Company due to take place at the offices of Cenkos Securities at 10.30a.m on 29 June 2017
"General Meeting Resolutions"	the resolutions to be considered and, if thought fit, passed at the General Meeting
"Group"	the Company and all of its subsidiary undertakings ("subsidiary undertakings" having the same meaning as set out in the Act)
"Issue Price"	40 pence per new Ordinary Share
"London Stock Exchange"	London Stock Exchange plc
"Money Laundering Regulations"	Money Laundering Regulations 2007, the money laundering provisions of the Criminal Justice Act 1993, Part VIII of FSMA (together with the provisions of the Money Laundering Sourcebook of the FCSA and the manual of guidance produced by the Joint Money Laundering Steering Group in relation to financial sector firms), the Terrorism Act 2000, the Anti Terrorism Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Terrorism Act 2006
"Open Offer"	the invitation made to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in Part 3 of the Circular and in the Application Form
"Open Offer Entitlements"	the basic entitlements of Qualifying Shareholders to subscribe for Open Offer Shares allocated to Qualifying Shareholders on the Record Date pursuant to the Open Offer
"Open Offer Shares"	the 10,506,560 Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer
"Ordinary Shares"	ordinary shares of 50p each in the capital of the Company or, if resolutions 1 and 2 of the General Meeting Resolutions are passed, ordinary shares of 1p each in the capital of the Company
"Overseas Shareholders"	a Shareholder with a registered address outside the United Kingdom
"Proposals"	the Open Offer and the General Meeting Resolutions
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in a CREST account
"Qualifying non-CREST"	Qualifying Shareholders holding Existing Ordinary Shares in Shareholders" certificated form
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date (but excluding any Overseas Shareholder who has a registered address in the United States of America or any other Restricted Jurisdiction)
"Record Date"	5.30p.m. on 2 June 2017
"Registrar"	Capita Asset Services in its capacity as the Company's registrar
"Regulatory Information Service"	has the meaning given in the AIM Rules for Companies
"Restricted Jurisdiction"	United States of America, Canada, Australia, Japan, the Republic of Ireland, South Africa and any other jurisdiction where the making of the Open Offer would breach any applicable law or regulation
"Securities Act"	US Securities Act of 1933 (as amended)
"Shareholders"	the holders of Existing Ordinary Shares
"UK"	the United Kingdom of Great Britain and Northern Ireland
"United States", "United States of America" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

 

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