TIDMGUS
RNS Number : 6632E
Gusbourne PLC
20 July 2016
This announcement contains inside information.
Gusbourne Plc
(London - AIM: GUS) (Gusbourne or the "Company")
Placing of up to GBP10,000,000 of 5 year Secured Deep Discount
Bonds at a discount of 9% per annum and issue of Share Warrants
(the "Placing")
The Company announces its intention to raise up to GBP8,000,000
by way of subscriptions for secured deep discount bonds
("Bonds").
The Company also intends to issue share warrants ("Warrants") to
Bond holders on a pro-rata basis giving them the right to subscribe
for new ordinary shares in the Company ("Shares") at an exercise
price of 75 pence per Share. The Warrants will be issued at no cost
to Bond holders. The Company may increase the total amount raised
by subscriptions for the Bonds but in any event will not raise a
total of more than GBP10,000,000.
Background to the Placing
Gusbourne is one of England's premier sparkling wine businesses.
The Company's long term strategy includes the further expansion of
production and sales of its international 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 wine stocks.
The proceeds from this fundraising will be used for:
-- Capital expenditure on immature vineyards planted between
2013 and 2015 in Kent and West Sussex;
-- Capital expenditure on additional plant and equipment for the vineyards and winery;
-- Working capital to fund in particular the continuing increase
in the Company's sparkling wine stocks;
-- Ongoing investment in the further development of the award winning Gusbourne brand;
-- Repayment of the existing convertible bond held by Mr. Andrew
Weeber and Mrs. Caroline Weeber; and
-- Establishment of a cellar door sales facility including vineyard and winery tours.
Certain Directors of Gusbourne have indicated their intentions
to apply for Bonds in at least the following amounts:
Andrew Weeber; GBP600,000; and
Ian Robinson; GBP100,000; and
Lord Arbuthnot PC; GBP10,000; and
Matthew Clapp; GBP10,000.
The Company has agreed with Andrew Weeber that his application
will be satisfied out of the proceeds of redemption of his existing
convertible bond which will take place on or before the closing of
the Placing.
Lord Ashcroft KCMG PC, who controls 64.4% of the ordinary share
capital of the Company, has indicated his intent to apply for the
Bonds in the amount of 64.4% of the total amount raised. For
illustration, if the total amount raised is GBP8,000,000, Lord
Ashcroft would intend to apply for GBP5,152,000 of this amount. As
noted above, the Company may increase the total amount raised to a
limit of GBP10,000,000 and Lord Ashcroft may increase his intended
application by an amount equivalent to up to 64.4% of any such
additional amount raised above GBP8,000,000.
Summary of the Bonds
The Bonds, when issued will have a five-year term with a
discount rate of 9% per annum. For illustration, this means that a
subscription of GBP10,000 would be repayable at the end of the
five-year term at the Bond's nominal value of GBP15,386,
representing a 9% per annum compound discount of GBP5,386. The
discount element will accrue over the period of the Bond.
The Bond will be secured on the assets of the Company and will
rank behind the current Barclays Bank facilities of approximately
GBP2.4 million. The Company will covenant not to increase these
Barclays facilities, or any other preferred security ahead of the
Bonds beyond a maximum of GBP5 million.
The Bonds will be freely transferable but not will not be traded
on any stock exchange and will be governed by a security trustee
arrangement. The security trustee will provide a focal point for
the relationship between Bond holders and the other parties to an
intercreditor agreement, including in particular Barclays Bank.
The Bonds will be redeemable by the Company, in whole or in
part, at any time after three years by the Company giving six
months' notice, with such notice not to end before the third
anniversary of the date of issue of the Bonds.
Bond holders may elect, by giving no less than (25) working
days' notice in writing to the Company, to commute such portion of
any Bond (and the related accumulated discount) they hold to cover
the total price of any exercise of the Warrants.
Bond holders may elect by notice in writing to the Company to
use any portion of the redemption proceeds of the Bonds to cover an
exercise of the Warrants, such notice to be received by the Company
no less than (25) working days before the redemption of the
Bonds.
Summary of the Warrants
Warrants will be issued to the Bond holder as to one Warrant for
every GBP2 of the Bonds for which the Bond holder subscribes. For
illustration, a subscription of GBP10,000 of Bonds will result in
the Bond holder receiving 5,000 Warrants.
Warrants will be exercisable by the holder giving notice in the
prescribed format to the Company. Any such notice may be given at
any time up to 25 working days before the fifth anniversary of the
issue of the Warrants.
Each Warrant will, upon exercise, entitle the holder to exchange
one Warrant for one Share at .an exercise price of 75 pence per
Share. For illustration, a holder of 5,000 Warrants will receive
5,000 Shares upon exercise at a total cost of GBP3,750 (5,000 x
75p).
Any increased yield provided by the Warrants will depend on the
market value of the Shares at the time of exercise and sale. For
example, if Warrants are exercised in five years' time and are then
immediately sold when, for illustration, the market value of each
Share is 110p, the gain attributable to the Warrant holder in
respect of 5,000 Warrants would be GBP1,750. This illustrative gain
would provide an additional 2.37% annual yield on the original
GBP10,000 Bond subscription and provide a total yield of
11.37%.
The Warrants will be freely transferable but will not be traded
on any stock exchange.
The exercise of the Warrants will always be conditional on the
power of the Company's directors to allot the relevant number of
Shares free from pre-emption rights. The level of such power given
to the Company's directors by the Company's shareholders at the
Company's Annual General Meetings to date comfortably exceeds the
level required to allot all Shares which could fall for allotment
pursuant to the exercise of Warrants.
Eligibility and timing
The Placing is being made available to a limited selection of
shareholders and other placees, in order to avoid the requirement
to publish a Prospectus in accordance with section (86)(1)(b) of
the Financial Services and Markets Act 2000. Such action has been
taken to avoid substantial advisory costs for the Company and the
requirement for significant management resource in the short to
mid-term, that the directors believe would be a hindrance to
implementing Gusbourne's operational strategy.
An explanatory letter and application form are today being
posted to selected shareholders providing further detail on the
Placing and application process. The Company expects to close the
Placing by 15 August 2016, following which it will announce the
final amount raised. The Company may at their discretion extend
this deadline but in any event to no later than 31 August 2016.
Related Party transaction
Lord Ashcroft KCMG PC is considered a Substantial Shareholder
under the AIM Rules for Companies (the "AIM Rules") and has stated
his intention to subscribe for 64.4% of the total Bonds issued by
the Company. The level of this subscription by Lord Ashcroft KCMG
PC is likely to constitute a related party transaction under Rule
13 of the AIM Rules, dependent on the amount raised from the Bond
issue. The Directors consider that, having consulted with Cenkos,
the terms of the transaction are fair and reasonable insofar as
Shareholders are concerned.
Enquiries:
Gusbourne Plc
Andrew Weeber +44 (0)12 3375 8666
Cenkos Securities plc
Nicholas Wells +44 (0)20 7397 8920
Note: This and other press releases are available at the
Company's web site: www.gusbourneplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IODSFLFWUFMSELW
(END) Dow Jones Newswires
July 20, 2016 02:00 ET (06:00 GMT)
Gusbourne (LSE:GUS)
Historical Stock Chart
From Apr 2024 to May 2024
Gusbourne (LSE:GUS)
Historical Stock Chart
From May 2023 to May 2024