Gusbourne Regulatory News (GUS)

This announcement contains inside information.

Gusbourne Plc

(London - AIM: GUS) (Gusbourne or the "Company")

Placing of up to £10,000,000 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 £8,000,000 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 £10,000,000.

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; £600,000; and

Ian Robinson; £100,000; and

Lord Arbuthnot PC; £10,000; and

Matthew Clapp; £10,000.

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 £8,000,000, Lord Ashcroft would intend to apply for £5,152,000 of this amount. As noted above, the Company may increase the total amount raised to a limit of £10,000,000 and Lord Ashcroft may increase his intended application by an amount equivalent to up to 64.4% of any such additional amount raised above £8,000,000.

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 £10,000 would be repayable at the end of the five-year term at the Bond's nominal value of £15,386, representing a 9% per annum compound discount of £5,386. 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 £2.4 million. The Company will covenant not to increase these Barclays facilities, or any other preferred security ahead of the Bonds beyond a maximum of £5 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 £2 of the Bonds for which the Bond holder subscribes. For illustration, a subscription of £10,000 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 £3,750 (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 £1,750. This illustrative gain would provide an additional 2.37% annual yield on the original £10,000 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