Distil Share Price (DIS)

Lets have Don as a non exec as he's done such an amazing job at distil....

For sure it's a great deal for DIS shareholders. The market needs to price it in, maybe once we get to June that's what will happen.

DIS will be getting massive free publicity in June too.

To clarify from RNS 20th July 2021

Interest rate : 5% per annum, paid quarterly in arrears.

Duration : 10 years.

Conversion Terms: At any time during the term of the Loan at a valuation of £30 million, which, assuming the loan outstanding is £5 million, equates to approximately 14.28% of Ardgowan's fully diluted issued share capital.

Security: With effect from Ardgowan issuing the first capital call and during the term of the Loan until the earlier of (i) repayment of the Loan in full, or (ii) conversion of the Loan into Ardgowan equity Ardgowan shall procure that a sum, such being the lower of (a) £250,000 and (b) an amount equal to the total interest payable on the Loan by Ardgowan during the then current 'year' (being each period of 12 months from the date of signature of the loan agreement) of the Loan term, is deposited and maintained in a GBP denominated bank account in the Company's name.

Ardgowan will pledge 10% of its annual production of malt whisky (or other product at the discretion of Distil) to Distil during the term of the Loan. In addition, Ardgowan has granted to Distil a floating charge over 10% of its annual production of malt whisky (or other product at the discretion of Distil) until the above pledge takes effect.

Change of control: Distil can require early repayment or conversion of the Loan if a change of control event occurs.

Under the Loan Agreement, Distil will be allowed to appoint an observer at all Ardgowan board meetings and, once it has a shareholding of over 10 per cent. (which would be the case once the Loan conversion into shares in Ardgowan has occurred) it will be allowed to appoint one Distil director to the Ardgowan board. It is expected that Distil's Executive Chairman, Don Goulding, will fulfil these roles.

The pledge of 10% of whisky or other products to Distil from Ardgowan and the yearly payback of £250000 plus interest is the most interesting part of that loan. Those that are arguing over the £30 million asset value need to read into this RNS a bit more. This is on top of any sales and distribuition that Global Brands and the US market prevails to.

£1.05 m market cap is far too low and time will tell whether the long wait for Ardgowan is finally worthwhile. To me it adds a lot of extras to Distil in the on site store, Blackwoods Gin made on site, and the rest of the extra promotions having Distil products at Ardgowan will offer.

I think this looks a great investment, but that is what it is on the balance sheet and a revaluation (up or down) doesnt impact the cash outflow on the "core" business from the very poor channel decisions, complete lack of brand development, lack of operational execution etc which needs to turnaround.

All in all its a good business.