Kent winery Gusbourne agrees new £10.5m loan

After a stronger than expected start to the year, which was then curtailed by Covid-19, Kent-based Gusbourne has agreed a £10.5 million asset-based loan with PNC Financial Services.

The winery, which first planted vines at its base in Appledore in 2004, said that revenue achieved in the first three months of this year had been “ahead of expectations”.

However, it said distribution channels have been impacted by Covid-19, namely the on-trade. A trading update stated that the winery had been able to engage in a number of “new sales initiatives” to mitigate the impact of coronavirus, with increased volumes of online sales reported.

The winery and vineyard has remained in operation with safety procedures in place, however the company has furloughed a number of staff, particularly in sales roles, and has “taken various steps to reduce costs at this time”.

Company directors, however, have said they remain “confident” about the winery’s longer-term prospects post-Covid-19.

The £10.5m asset-based lending facility, agreed with PNC, will be used to refinance existing debts and provide additional liquidity for the company. Gusbourne will also use the loan to instigate the part-repayment of loans from non-executive director Paul Bentham and shareholder Lord Ashcroft.

For example, £0.8m of the loan will be used to part repay a short-term loan of £1.25m received on 23 December 2019 from Franove Holdings Limited, a company owned by Bentham. An additional £0.5m will be used to part repay a short-term loan of £2m received on 31 May 2019 from a company controlled by Lord Ashcroft.

However, Gusbourne’s directors said the loan will be mostly used to provide working capital for the business. They said that asset-based lending is a facility “used by vineyards across the world”, and that given the current environment, it is “an important milestone for the maturity of the Gusbourne business and reflects the growth of the company over the past five years.”

Charlie Holland, head winemaker and CEO, 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.”