Gusbourne looks to raise £10m from new bonds

English sparkling wine producer Gusbourne Estate is raising up to £10m through issuing new bonds to support its newly planted vineyards.

The Kent-based winery, which also has vineyards in Surrey, has issued the secure deep discount bonds, which are set to mature in five years’ time. They are being made available to a limited selection of shareholders in order to minimise advisory costs and additional management resources, which the company said would be “a hindrance to implementing Gusbourne’s operational strategy”.

It aims to raise a minimum of £8m, but the vineyard’s majority owner, Tory peer Lord Ashcroft, has confirmed he will match nearly two thirds of the total raised (as per his 64.4% share of the company) which is likely to be in the region of £5m – £6.4m.

The funds will be used as working capital and cap-ex to support its goals of developing the company and increasing production, including immature vineyards that were planted between 2013 and 2015, the purchase of additional equipment, further investment in the brand, and the establishment of a new cellar door facility to include vineyard and winery tours.

The company explained the production of premium sparkling wine from new vineyards was a long term project and required funding to support investment in new vineyards, additional winery capacity and wine stocks.

It will also issue warrants, giving bond-holders the option to buy shares.

In May, Gusbourne reported an operating loss of £1.12m in the 12 months to December 2015, which it said was in line with its long term plans, although sales rose 9% to £473,000 over the same period. It follows previous losses in 2014 and 2013.

Last month Gusbourne CEO Ben Walgate stepped from the company, with founder and chairman Andrew Weeber taking the helm “for the time being”.