(Alliance News) - English sparkling wine maker Gusbourne PLC on Monday unveiled funding plans worth more than GBP5 million to bolster its balance sheet and sales growth prospects.
Gusbourne said its largest shareholder, Belize Finance Ltd, has agreed to exercise all its outstanding warrants to subscribe for 1.3 million shares at 75 pence each. This will provide GBP983,638 in cash to Gusbourne.
Shares in Gusbourne were down 11% at 110.0p in London on Monday morning.
The company also said Belize will convert its interest in Gusbourne's deep discount bonds issued in 2020 into 2.8 million shares and into 2.3 million shares for the 2016 bonds.
Franove Holdings Ltd has agreed to convert its short-term loan amounting to GBP610,445 into 813,926 shares.
Further, Gusbourne plans to raise GBP2.1 million through a share placing priced at 75p per share, and also will make an open offer to raise GBP2.0 million. A share subscription by Chair Jim Ormonde and another existing investor will raise a further GBP375,000, also at 75p per share.
The placing is being led by Panmure Gordon (UK) Ltd as bookrunner. The 3.3 million shares being placed would represent 6.7% of Gusbourne's enlarged share capital. It had a GBP57.2 million market capitalisation, based on Friday's closing price.
The funding will be used to support business growth, such as by boosting visitor capacity at the company's cellar door operations, lifting marketing expenditure to promote sales growth and investing in digital promotion.
Following all these efforts, Gusbourne expects that all remaining short-term debt on the balance sheet will be "eliminated".
"We are delighted to announce our funding plans, which will include a broadening of our shareholder base and the conversion of most of our short-term debt into equity. This will provide significant support for the company's ambitious plans to grow sales of our expanding range of luxury wines," said Chief Executive & Chief Winemaker Charlie Holland.
"We also look forward to welcoming new investors to join us on this exciting journey, as we remain focused on building a lighthouse brand at the forefront of English winemaking."
By Lucy Heming;Â lucyheming@alliancenews.com
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Gusbourne (GUS)