Result of Warrant Exercise and Debt Conversion

RNS Number : 8140Q

Gusbourne PLC

01 November 2021

 

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

1 November 2021

Gusbourne Plc

("Gusbourne" or the "Company")

Results of the Exercise of Warrants, Conversion of DDBs and Short-Term Loan into Shares and repayment of the remaining DDBs

Following the Company's Funding Update announcement on 18 October 2021, Gusbourne Plc, the English sparkling wine producer, is pleased to announce the following results of the exercise of warrants and the conversion of DDBs and the short-term loan into Ordinary Shares.

Exercise of warrants:

On 18 October 2021, the Company's largest shareholder, Belize Finance Limited ("BFL"), a related party of Lord Ashcroft who is classified as a substantial shareholder under the AIM Rules, exercised all its outstanding warrants (the "BFL Warrants") to subscribe for ordinary shares of 1 pence each in the Company ("Ordinary Shares"). Pursuant to the exercise of the BFL Warrants, BFL subscribed for 1,311,517 Ordinary Shares at 75p per Ordinary Share (the "Issue Price") which provided cash proceeds to the Company of £983,638.

Following this exercise, other warrant holders held outstanding warrants (the "Warrants") to subscribe for a further 707,500 Ordinary Shares at the Issue Price with an expiry date of 29 October 2021. At close of business on 29 October 2021, other Warrant holders, including certain directors, had exercised 307,500 warrants to subscribe for 307,500 Ordinary Shares at the Issue Price, which has provided cash proceeds to the Company of £230,625. These amounts included 175,000 Warrants to subscribe for 175,000 Ordinary Shares at the Issue Price out of the DDB proceeds as defined below. The following directors exercised Warrants as follows:

  Number of Warrants exercised 

Lord Arbuthnot                                  5,000

Mike Paul  5,000

Ian Robinson  10,000

The total number of Ordinary Shares issued pursuant to the exercise of the BFL Warrants and the Warrants (together the "Exercise of Warrants") amounts to 1,619,017 Ordinary Shares (the "Warrant Shares") which has provided total cash proceeds to the Company of £1,214,263. 

The remaining 400,000 Warrants not exercised at close of business on 29 October 2021 have now expired.

Conversion of DDBs and short-term loan into Ordinary Shares and repayment of remaining DDBs

On 15 October 2021 BFL, the majority holder of the Company's deep discount bonds issued in 2016 and 2020 (together the "DDBs") and Franove Holdings Limited ("Franove"), the holder of the short-term loan, agreed to extend the repayment date of these debts to 29 October 2021. The total amount of the DDBs and the short-term loan as at 29 October 2021 amounted to £6,192,252.

On 29 October 2021 BFL converted its interest in the DDBs into Ordinary Shares at the Issue Price (the "BFL Conversion"). BFL has converted its DDBs into 2,838,765 Ordinary Shares at the Issue Price in respect of money owed for the 2020 DDB, amounting to £2,129,074, and 2,306,314 Ordinary Shares at the Issue Price in respect of money owed for the 2016 DDB, amounting to £1,729,735. 

On 29 October 2021 the sole holder of the short-term loan Franove, a related party of Paul Bentham, a director of the Company, converted its short-term loan amounting to £610,445 into 813,926 Ordinary Shares at the Issue Price on 29 October 2021 (the "Franove Conversion"). 

On 29 October 2021, following an invitation to all other holders of DDBs to convert amounts owed to them by the Company via the DDBs (the "DDB proceeds") into Ordinary Shares, other holders of DDBs amounting to £373,177 converted their DDBs (the "Other DDBs Conversion") into 497,568 Ordinary Shares at the Issue Price and used £131,250 of DDB proceeds to exercise 175,000 Warrants. The remaining DDBs amounting to £1,218,573 have been repaid, and all short-term debt on the Company's balance sheet has therefore now been eliminated.

The total Ordinary Shares issued pursuant to the BFL Conversion, the Franove Conversion and the Other DDBs Conversion (together the "DDBs and Franove Conversion") amounts to 6,456,573 Ordinary Shares (the "Conversion Shares"). 

The Company will not receive any cash proceeds from the DDBs and Franove Conversion.

Placing and Subscription

On 18 October 2021, the Company announced that it had successfully raised gross proceeds of £2,244,997 through the Placing and a further £375,000 through the Subscription, resulting in aggregate gross proceeds of £2,619,997. Under the Placing, the Company had placed 2,993,329 Ordinary Shares (the "Placing Shares") at a price of 75 pence per share (the "Issue Price") and 500,000 Ordinary Shares (the "Subscription Shares") had been subscribed for at the Issue Price under the Subscription.

The Placing Shares and Subscription Shares were admitted to AIM on 22 October 2021 and the Company currently has 49,989,448 Shares in issue prior to the issue of the Warrant Shares and the Conversion Shares.

Admission and Dealings

The Exercise of Warrants and the DDBs and Franove Conversion is conditional upon Admission becoming effective. Application will be made to the London Stock Exchange for the Warrant Shares and the Conversion Shares (a total of 8,075,590 Ordinary Shares) to be admitted to trading on AIM. Admission is expected to occur on 4 November 2021.

The Warrant Shares and the Conversion Shares will, when issued, be credited as fully paid and rank pari passu with the existing Ordinary Shares, including, without limitation, the right to receive all future dividends and distributions declared, made or paid after the date of issue of the Warrant Shares and the Conversion Shares.

Total Voting Rights

Immediately following Admission, the Company will have a total of 58,065,038 Ordinary Shares in issue. With effect from Admission, this figure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

Open Offer

The Company intends, shortly, to make an open offer ("Open Offer") to raise approximately £2,000,000 to be made to all shareholders of the Company ("Shareholders") at 75p per Ordinary Share.

It is intended that the Open Offer will be made to all Shareholders after Admission of the Warrant Shares and the Conversion Shares. The Open Offer will include an opportunity to apply for additional Ordinary Shares in excess of each Shareholder's entitlements.

BFL has undertaken not to take up their rights under the Open Offer so the full £2,000,000 of entitlements will be available preemptively to all other shareholders. The Company has entered into an agreement with BFL whereby BFL has committed to underwrite the Open Offer in full in the event that Ordinary Shares are not taken up by Shareholders as part of the Open Offer. BFL will receive a fee of £100,000 for agreeing to underwrite the Open Offer. Further details of the Open Offer will be provided in a separate announcement when it is made.

Funding Summary

Following the completion of the Placing and Subscription, the Exercise of Warrants, the DDBs and Franove Conversion, the repayment of the remaining DDBs, and the Open Offer (together "the Transactions"), the total cash funding to be raised is expected to amount to approximately £4.5 million before Transaction expenses. This funding will be used to support the ongoing business growth across all distribution channels (Direct to Consumer, UK Trade and International) and further development of the Company, including:

· Increasing visitor capacity at the Company's cellar door operations ("The NEST") in Appledore

· Increasing sales and marketing expenditure to promote further sales growth

· Investing in further digital promotion and sales optimisation across all channels

· Supporting future growth potential by increasing production efficiency and capacity

Bonus issue of warrants to all shareholders :

The Company will make a bonus issue of transferrable one-year warrants to subscribe for approximately 4 million Ordinary Shares (c.£3million) at 75p per share to all Shareholders on the register following completion of the Open Offer, pro rata to their shareholdings. 

Enquiries:

Gusbourne Plc

Charlie Holland    [phone]

Canaccord Genuity Limited (Nomad and Joint Broker)

Bobbie Hilliam   [phone]

Georgina McCooke

Panmure Gordon (UK) Limited (Joint Broker)   

Oliver Cardigan  + 44 (0)20 7886 2500

Hugh Rich

Ailsa Macmaster

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). In addition, market soundings (as defined in MAR) were taken in connection with the matters referred to above as a result of which certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received such inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

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

Note to Editors

Gusbourne produces and distributes a range of high quality and award-winning vintage English sparkling wines from grapes grown in its own vineyards in Kent and West Sussex.

The Gusbourne business was founded by Andrew Weeber in 2004 with the first vineyard plantings at Appledore in Kent. The first wines were released in 2010 to critical acclaim. Following additional vineyard plantings in 2013 and 2015 in both Kent and West Sussex, Gusbourne now has 231 acres of mature vineyards. The NEST visitor centre was opened next to the winery in Appledore in 2017, providing tours, tastings and a direct outlet for our wines.

Right from the beginning, Gusbourne's intention has always been to produce the finest English sparkling wines. Starting with carefully chosen sites, we use best practice in establishing and maintaining the vineyards and conduct green harvests to ensure we achieve the highest quality grapes for each vintage. A quest for excellence is at the heart of everything we do. We blind taste hundreds of samples before finalising our blends and even after the wines are bottled, they spend extended time on their lees to add depth and flavour. Once disgorged, extra cork ageing further enhances complexity. Our winemaking process remains traditional, but one that is open to innovation where appropriate. It takes four years to bring a vineyard into full production and a further four years to transform those grapes into Gusbourne's premium sparkling wine.

We are one of England's most awarded wine producers. Highlights include:

· Three times winner of the International Wine & Spirits Challenge (IWSC) English Wine Producer of the Year, having won the award in 2013, 2015 and 2017- a unique achievement

· Winner of 'Winery of the Year' trophy at the WineGB competition

· Highest rated English sparkling wine by the Wine Enthusiast in 2020

· Trophy for best English Still Red Wine at Wine GB awards 2018-2020

· Best in Class trophies at the Champagne & Sparkling World Championships in both 2018 and 2019

· 'Best English Sparkling Wine' as well as overall 'IWC China Champion Sparkling Wine 2019' at the International Wine Challenge held in Shanghai

Gusbourne's luxury brand enjoys premium price positioning, and its wines are distributed in some of the finest establishments both in the UK and abroad. Our wines can be found in leading luxury retailers, restaurants, hotels and stockists, always being aware that where we are says a lot about who we are.
 

 

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