TIDMSHLP
RNS Number : 0602N
Shellproof PLC
03 September 2013
Shellproof PLC ("Shellproof" or the "Company")
Acquisition of Gusbourne Estate Business, placing to raise
GBP2.85 million and re-admission to AIM
Transaction Highlights
-- Acquisition of the Gusbourne Estate Business and related
Freehold Property for GBP7.0 million.
-- Andrew Weeber, the present owner and founder of the Gusbourne
Estate Business, to be appointed as Non-Executive Director and
Chairman and will work closely with the executive team.
-- The executive team of the Enlarged Group will comprise CEO
Ben Walgate, winemaker Charlie Holland and vineyard manager Jon
Pollard.
-- Enlarged Group to benefit from the established and award-winning Gusbourne brand.
-- Placing to raise GBP2.85 million, supported by new and
existing investors, at a significant premium to prevailing share
price, to help fund the further development of the Gusbourne Estate
Business, including the planting of a further 100 acres of
vineyards in Kent over the next two years.
-- Shellproof PLC will change its name to Gusbourne PLC.
Market highlights
-- 1,700 million bottles of wine sold annually in the UK of
which 109 million bottles are sparkling wine.
-- 2.6 million bottles of English wine (including sparkling) sold in the UK in 2011/12.
-- Growing markets both in the UK and overseas for English
sparkling and still wine, supported by numerous awards in recent
years for English sparkling wine at both national and international
levels.
Gusbourne Estate wines
Since the maiden vintage in 2006, which was released in 2010,
wines produced at Gusbourne Estate have won numerous national and
international accolades. The Brut Reserve 2008 most recently gained
a Gold Award at the highly acclaimed 2013 International Wine and
Spirits Challenge. Other recent global successes include a Gold
Award for the Gusbourne Estate's Blanc de Blancs 2008 at the
International Wine Challenge in 2013 and the Estate's first still
white, Guinevere 2011, was crowned Regional Trophy Winner at the
2013 Decanter World Wine Awards.
Gusbourne Estate wines are found in leading wine merchants,
luxury London department stores, specialist retailers and
restaurants including a significant number of Michelin starred
restaurants. At full production maturity, Gusbourne Estate will
produce over 500,000 bottles of wine. There will be a minimum of 16
full time employees and over 100 pickers will be employed
seasonally.
Andrew Weeber, the proposed Non-Executive Chairman,
commented:
"Our recent successes demonstrate the huge potential of the
Gusbourne brand and I am very excited to be embarking on a new
phase of business development and expansion. I look forward to
working with an experienced and dynamic management team. I believe
the prospects for the Gusbourne Estate product range in the context
of the growing market for English sparkling and still wines are
excellent".
Ben Walgate, Chief Executive Officer of Shellproof, commented:
"I am delighted to lead such a talented executive team as we expand
and grow the Gusbourne brand. We see great opportunities for a
brand of such premium quality. I am also very much looking forward
to working closely with our Chairman, Andrew Weeber who has
achieved great success with the business over the past 10 years. We
will retain and continue the best practices that have been
instilled from the very beginning at Gusbourne Estate.
For further information contact:
Shellproof PLC
Andrew Weeber /Ben Walgate +44 (0)12 3375 8666
Cenkos Securities plc
Adrian Hargrave/ Nicholas Wells +44 (0)20 7397 8900
Note: This announcement, the admission document in relation to
the Enlarged Group and other press releases are available to view
at the Company's website: www.shellproofplc.com
INTRODUCTION
The Directors today announce that Shellproof has entered into
Acquisition Agreements to acquire the Gusbourne Estate Business and
a related Freehold Property. In addition, the Company has raised
GBP2.85 million from existing and new investors at a price of 54
pence per ordinary shares, a significant premium to the prevailing
share price. On Admission it is proposed that the name of
Shellproof PLC will be changed to Gusbourne PLC and the name of
Shellproof Wines will be changed to Gusbourne Estate Limited.
Andrew Weeber, the current owner and founder of the Gusbourne
Estate Business about whom further information can be found below,
will become non-executive chairman of the Enlarged Group and play a
key role in the on-going development of the Enlarged Group's
Business.
The Enlarged Group intends to invest in, and further develop,
the Gusbourne Estate Business including, in particular, its award
winning Gusbourne brand to take advantage of further anticipated
market growth in this sector of the wine industry. The Board's
intention is to plant a further 100 acres of vineyards on the
Freehold Property in Kent, resulting in over 200 acres of prime
vineyards in Kent and Sussex in the Enlarged Group. The Enlarged
Group's winery operations and administration will be based at the
Freehold Property in Kent.
THE ACQUISITION
Shellproof Wines has entered into the Acquisition Agreements.
The Acquisition is for a purchase price of GBP7.0 million
consisting of GBP4.2 million in cash, plus an adjustment for
certain net operating and capital expenditures since 31 March 2013,
the issue of the Vendor Shares and the entering into of the Vendor
Bond. Of the GBP7.0 million, GBP5,287,000 (being GBP2,487,000 in
cash, the issue of the Vendor Shares and the entering into of the
Vendor Bond) is for the Freehold Property and GBP1,713,000 (plus an
adjustment for certain net operating and capital expenditures since
31 March 2013) in cash is for the Gusbourne Estate Business. The
Acquisition will, subject to the passing of the Resolutions, be
completed on Admission. Under the terms of the Acquisition
Agreements it is proposed that Shellproof Wines acquires the
Gusbourne Estate Business and the related Freehold Property.
The Acquisition is being funded by a combination of the
Company's existing cash resources, the Placing, the Bank Debt, the
Vendor Shares and the Vendor Bond. The Vendor Shares will rank pari
passu in all respects with the Existing Ordinary Shares including
the right to receive all dividends and other distributions
declared, paid or made after the date of issue.
The Acquisition is conditional on, inter alia, Admission taking
place by 30 September 2013 (or such other date as agreed by
Shellproof Wines and Andrew Carl Vincent Weeber ("AW")).
As the Vendor Shares are being issued for non-cash consideration
(namely the Freehold Property), the Act requires that consideration
to be independently valued and a copy of the valuation report to be
provided to the proposed recipient of the Vendor Shares (the
Vendors). In accordance with the Act, that report has been prepared
by Chavereys Chartered Accountants and sent to the Vendors, and a
copy of the valuation report will be filed with Companies House
when the return of the allotment of the Vendor Shares is filed.
THE VENDOR BOND
The Vendor Bond has a subscription price of GBP1,750,000 and a
nominal price of GBP2,337,518, which will be the price for which
the Vendor Bond will be redeemed if it is redeemed at its final
redemption date, which is the date that falls on the fourth
anniversary of completion of the Acquisition. The Vendor Bond may
be redeemed early if the Company raises a further GBP7,000,000 (by
way of share placings or debt that ranks behind the debt owed by
the Company to Barclays) in the 3 years after completion of the
Acquisition or, if Barclays consents, at the request of the Vendors
at any time (subject to a period of notice) from 30 months after
completion of the Acquisition.
From the second anniversary of completion of the Acquisition
until the third anniversary, the holders from time to time of the
Vendor Bond have the option to convert some or all of the Vendor
Bond into Shellproof PLC Shares, at a price of 66 pence per
share.
For as long as the Vendors hold GBP1,000,000 or more of the
nominal amount of the Vendor Bond, they will be entitled to appoint
one person as a director of the Company. That person will be AW or,
should AW die, another individual to be agreed by the Company.
The Vendor Bond is transferable by the Vendors (in whole or
part), at any time after the second anniversary of completion of
the Acquisition, provided that the Company has given its prior
consent to the transfer. Any transferee of the Vendor Bond will not
have the right to appoint a director of the Company described
above.
The Vendor Bond is to be secured by debentures to be granted to
the Vendors by the Company and Shellproof Wines and a legal charge
to be granted to the Vendors by Shellproof Wines.
THE PLACING
The Placing comprises the placing of 5,280,367 Shellproof PLC
Shares at 54 pence per Placing Share to be issued by the Company,
raising proceeds of GBP2.85 million before expenses.
The Placing Shares will be placed with certain existing
Shareholders, including Lord Ashcroft KCMG PC and other investors
known to the Company, including Paul Gerald Bentham ("PB"). PB will
become a non-executive director of the Company on Admission. Ian
Robinson, Andrew Wilson and Benjamin Walgate have agreed to
subscribe for, in aggregate, 100,000 of the Placing Shares
amounting to a total value of approximately GBP54,000 and Lord
Ashcroft KCMG PC has agreed to underwrite the Placing.
The Placing is conditional upon the Resolutions being passed and
Admission becoming effective by 30 September 2013.
The Placing Shares will rank pari passu in all respects with the
Existing Ordinary Shares including the right to receive all
dividends and other distributions declared, paid or made after the
date of issue.
GBP49,999.50 of the proceeds of the Placing will be used to
redeem the 99,999 redeemable shares of 50 pence each in the capital
of the Company. At the same time as the redemption, it is proposed
that the debt of GBP49,999.50 owed to the Company by the holder of
the redeemable shares will be repaid.
THE ENLARGED GROUP'S BUSINESS
Business strategy
The Enlarged Group intends to invest in, and further develop,
the Gusbourne Estate Business including in particular its award
winning Gusbourne brand to take advantage of further anticipated
market growth in this sector of the wine industry. The Gusbourne
Estate Business is one of the most prestigious English sparkling
wine businesses in the UK and has won numerous awards for its
products. The Board intends to plant a further 100 acres of
vineyards on the Freehold Property, resulting in over 200 acres of
vineyards in Kent and Sussex in the Enlarged Group, producing, at
full maturity, grapes sufficient for around 500,000 bottles of wine
per annum. The Enlarged Group's winery operations and
administration will be based at the Freehold Property.
Market Overview
The HMRC Alcohol Bulletin has reported that, in the year to
March 2012, total wine sales in the UK amounted to 1,715 million
bottles. Sparkling wine accounts for 109 million bottles of this
representing 6.4 per cent of all wine bought in the UK. English
wine (including sparkling) accounted for 2.6 million bottles (only
0.15 per cent of total wine sales in the UK).
Of the 2.6 million bottles of English wine sold in the UK during
the year to 31 March 2012, the Directors believe that English
sparkling wine accounts for approximately 60 per cent of this at
1.6 million bottles. This represents approximately 1.5 per cent of
the sparkling wine sold in the UK during this period. However, the
109 million bottles of sparkling wine sold in the UK during that
time include a number of categories, such as Cava and Prosecco, as
well as Champagne and other sparkling wines, which the Directors
believe are sold in retail price brackets from just under GBP5 to
over GBP100 per bottle. Champagne accounts for approximately 35
million bottles of sparkling wine sold in the UK during this
period, but even within this sub sector it is estimated that only a
proportion (perhaps around two-thirds) will have been at price
levels competitive with English sparkling wine. The Directors
therefore estimate that English sparkling wine might already
represent approximately 6 per cent of the equivalent Champagne
market. Given current production trends, the Directors believe that
this percentage could potentially double in the coming years.
English sparkling wines have won a number of awards recently
against competition from Champagne and other sparkling wines. Wines
produced by the Gusbourne Estate Business have won a number of
prestigious awards including most recently its Brut Reserve 2008
with a Gold Award in 2013 at the International Wine & Spirits
Challenge, and its Blanc de Blancs 2008 with a Gold Award in 2013
at the International Wine Challenge. The Guinevere 2011, the
Gusbourne Estate Business' still wine, was a Regional Trophy Winner
at the 2013 Decanter World Wine Awards.
The English sparkling wine sector has also enjoyed significant
and positive media coverage in recent years. It is understood that
English sparkling wines were drunk at the Royal Wedding (in 2011)
and by the Royal Family as part of the Diamond Jubilee celebrations
(in 2012) and it was reported that Waitrose sales of English
sparkling wine increased five-fold over the Diamond Jubilee
period.
Based on historic production volumes, the production of UK
vineyards has doubled over the last ten years. This growth in
production has also been reflected in UK vineyard growth with
planting in the UK up by around 75 per cent in 2009 to 2011
(inclusive) to approximately 1,400 hectares (equivalent to 3,460
acres) from the previous level of around 800 hectares (equivalent
to 1,980 acres). The Directors believe that sparkling wine grape
varieties form the bulk of new plantings.
In terms of competition, there are currently relatively few
large producers of English sparkling wine and the Directors
estimate that there are only a few companies producing more than
400,000 bottles of English sparkling wine per year. Availability of
English sparkling wine throughout the UK is currently restricted to
a few national retailers such as Waitrose and more recently Tesco,
with retail price points in the range of GBP15 - GBP30 with some
examples in excess of that. The Directors believe that direct
retail sales via farm shop, online and mail order represent a
significant proportion of distribution in the English sparkling
wine market and for smaller producers this is likely to be their
only outlet.
Enlarged Group's Business Description
The three principal components of the Enlarged Group's Business
will be the vineyards, the winery and sales and marketing
operations.
i. The Vineyards
These already contain, will contain or will be planted with
grape varieties suitable for English sparkling wine such as Pinot
Noir, Pinot Meunier and Chardonnay.
The Enlarged Group intends to operate approximately 205 acres of
vineyards. The 205 acres include 58.5 acres of mature vineyards and
a further 46.3 acres of new plantings in West Sussex, of which a 2
further acres were planted at the Halnaker site. A further 100
acres have been identified for planting on the Freehold Property in
May 2014 and May 2015. A further expansion of vineyards at the
Freehold Property should be possible in due course. The overall mix
of vineyards will be predominantly freehold, split between the
Freehold Property and the sites in Sussex.
The Directors envisage that the Enlarged Group will have full
control over the properties that produce its grape supply for the
long term, which the Directors believe is important to the success
of the Enlarged Group.
Extensive site assessments, including soil testing, have been
carried out in all new planting areas.
It should be noted that it takes up to four years for newly
planted vines to reach commercial maturity after which they may be
expected to have a commercial life of at least 30 years.
ii. The Winery
The Enlarged Group's winery operations will, subject to
completion of the Acquisition, be based at the Freehold Property
and will process all grapes grown on the Enlarged Group's vineyards
in both Kent and Sussex with effect from the October 2013
harvest.
Planning consent has been obtained for the construction of a new
winery building, storage facilities and a visitor centre on the
Freehold Property, which will, when developed, have sufficient
capacity to process all grapes from the Enlarged Group's Kent and
Sussex sites when they are at full production maturity. It is
expected that funding for this new winery will be raised separately
ahead of construction, which is currently expected to commence in
around two years' time.
In the meantime, the Gusbourne Estate Business is developing an
initial winery facility on the Freehold Property that will process
the grapes of the Gusbourne Estate Business and the Existing
Business from the 2013 harvest until the new winery has been built.
Shellproof Wines has made a loan facility of up to GBP60,000
available to AW to help fund the development of this initial
winery, such loan to be repaid on completion of the Acquisition
(or, if the Acquisition doesn't complete, on 30 September
2014).
iii. Sales & Marketing
This will be a key component of the Enlarged Group's Business,
and will include:
-- The further development and promotion of the established and
award winning Gusbourne brand. This will include entering Gusbourne
wines for national and international awards.
-- The further and selective development of the established
sales and distribution network within the Gusbourne Estate Business
to accommodate the increase in volumes over the coming years.
-- Export, UK wholesale and direct sales, including a visitor
centre at the Freehold Property, online and mail-order sales.
Fund Raising
It is proposed that funding will be raised in tranches to fit in
with the Enlarged Group's cash flow requirements with initial
funding of GBP7.65 million comprising the Bank Debt, Vendor Bond,
Vendor Shares, Placing and the GBP3.1 million of existing cash in
the Company as at 31 March 2013.
Further Costs of Developing the Enlarged Group's Business
In addition to the initial funding listed above, the Directors
estimate that additional funding of approximately GBP9.5 million
will be required over the coming years to provide sufficient
capital to fully develop the Enlarged Group's strategic plan. This
estimate comprises:
-- Further vineyard establishment costs - GBP0.7 million.
-- The construction of the new winery, storage area and visitor centre - GBP3.4 million.
-- Working capital for stocks and overheads - GBP3.4 million.
-- Repayment of the Vendor Bond - GBP2.0 million.
CURRENT TRADING AND PROSPECTS
The results of Shellproof PLC for the year ended 31 March 2013
have been announced to Shareholders and the report and financial
statements are being posted to Shareholders with the admission
document. The Company remains at the early stages of its
development as an English sparkling wine business and currently
owns 13.4 acres of freehold land at Halnaker, West Sussex and holds
a further 65.8 acres of other land in West Sussex on long term farm
business tenancies. At the end of July 2013 the Company had 9.7
acres of planted vineyards at the Halnaker site, of which 7.7 acres
were mature vines, and a further 44.3 acres of vineyards on the
long term farm business tenancy sites, which were planted in May
2013. The development of the new vineyards remains in line with
expectations and the 2013 grape yield prospects for the mature
vineyard at the Halnaker site are currently ahead of original
expectations as a result of favourable weather conditions.
The Company has recently recruited additional staff to support
its ongoing development activities.
The Gusbourne Estate Business commenced wine sales during the
year ended 31 March 2011 and has grown these revenues steadily
since then, partly reflecting the increased maturity profile of
staged vine plantings from 2004 onwards. Some grapes have been sold
but this component of sales has diminished significantly in the
last two years and the Enlarged Group plans to use all grapes for
its own production purposes. There is a small amount of arable crop
income from land at the Freehold Property not currently used for
vineyards. Current trading of the Gusbourne Estate Business remains
in line with expectations and the 2013 grape yield prospects for
the existing Gusbourne vineyards are currently ahead of original
expectations as a result of favourable weather conditions.
In evaluating prospects it should be noted that the Enlarged
Group's Business is not expected to reach its planned mature
production volumes for approximately 11 years. This extended time
period reflects:
-- The planting of vines over the next 3 years.
-- The time taken for vines to reach peak grape production of approximately 4 years.
-- The time taken for premier tier sparkling wine production and
maturity of approximately 4 years from the time that the vines have
reached maturity.
The Directors believe that it will take approximately 6 years
for the Company to become cash flow positive and have estimated
that the internal rate of return on invested funds will be in the
range of 15 per cent to 20 per cent. Some of the key operational
assumptions impacting these estimates include grape production
yield per acre, the juice yield from those grapes, the product
pricing and the retail/wholesale mix. The Directors believe the
assumptions they have used are reasonable based on knowledge of
similar operations but it should be noted that such comparable data
is limited and comes from an industry which is still in the
relatively early stages of growth in the UK.
THE BOARD
The Directors and Proposed Directors are as follows:
Benjamin James Walgate BSc, Chief Executive
Since university, Ben's career has been focused on the wine
industry. After a summer spent working in vineyards and cellars in
Western Europe, Ben returned to England to study Viticulture (grape
growing) and Oenology (winemaking) for two years at Plumpton
College.
After Plumpton College, Ben ran his own business, involving the
importation and sale of rare and unusual wines into the UK. This
provided him with direct experience of the wine wholesale and
retail market in the UK. Following the disposal of this business,
Ben took over the management of one of the UK's oldest vineyards,
replanting and rejuvenating 40 plus year old vineyards. The
refurbishment of the winery and winemaking procedures increased
both quantity and quality of wine produced.
From his time at Plumpton and throughout his career in the wine
trade, Ben has developed a network of peers, contacts and
organisations, both in the UK wine industry and abroad, that is
expected to provide additional support for Ben in his role as Chief
Executive and for the Enlarged Group.
Ben advised Shellproof Limited and Shellproof Wines on the
establishment of an English sparkling wine business between
February 2011 and October 2012 prior to his appointment as Chief
Executive Officer of Shellproof PLC.
Andrew Weeber BSc, MB ChB, FCS, Non-Executive Chairman
After graduating from the University of Stellenbosch in 1968
with a BSC in Biochemistry & Physiology, Andrew continued to a
Bachelor of Medicine and Surgery. He specialised at the University
of Cape Town, and was awarded his FCS in Trauma and Orthopaedic
Surgery in 1984.
Andrew went on to pursue a career spanning more than 20 years
practising as a consultant orthopaedic surgeon in South Africa and
the United Kingdom, whilst simultaneously pursuing his
entrepreneurial interests. In 1986 he co-founded, and successfully
exited, the 247-bed private Vergelegen Mediclinic Hospital, near
Cape Town. In 1988 Andrew's interest in wine and biochemistry led
him to acquire a 50% stake in a 7,400 acre Robertson wine estate, a
portion of which was planted with wine grapes. He sold the Estate
in 1991 and moved to the United Kingdom in 1992.
In the United Kingdom, he developed an orthopaedic unit within
the Friarage Hospital in North Yorkshire. He oversaw its growth to
a regional specialisation centre, employing 21 surgeons. During
this time, Andrew was appointed to the Medical Committee of the
Football Association of England. Andrew retired from medicine in
2004 and focused on his personal business interests, primarily the
development of the Gusbourne Estate; a project which he had
established a year earlier on his 500 acre Estate in Kent. The
first vintage was released in 2010 to critical acclaim and received
numerous awards. This firmly established Gusbourne Estate's
position at the forefront of premium English wine. Andrew is a key
opinion leader in the English wine industry, and is closely
involved with the English Wine Producers Association.
Andrew has held several board memberships, including 6 years at
the 15,000 acre Alpheus Williams & Son Timber Corporation,
until its successful acquisition by the SAPP I Group and is
currently a director of Paul Wake Service Centre Limited.
Ian George Robinson BA FCA, Non-Executive Director
Ian is currently a director of Anne Street Partners Limited and
non-executive director of a number of privately owned businesses.
Previously he was Chief Financial Officer of Carlisle Group's UK
staffing and facilities services operations.
Ian has held other senior financial appointments in UK service
group companies and has spent several years overseas in both chief
executive and chief financial officer roles of a quoted
international services group.
Andrew Stephen Wilson MA, Non-Executive Director
Andrew is currently Chairman of the Impellam Group plc and a
non-executive director of a number of AIM-listed companies,
including Dods (Group) plc, Restore plc, Jaywing plc and TLA
Worldwide plc. He is also currently a non-executive director of a
number of privately owned businesses. Previously he was an
investment banker with UBS Warburg specialising in mergers and
acquisitions.
Paul Gerald Bentham, Non-Executive Director
Paul is the founder and currently the Non-Executive Chairman of
Retail Merchant Group Ltd, having previously been a director. With
a background in card payment services and retail banking projects
he was the founder and previously the Executive Chairman of
Cardsave UK Ltd. He is also engaged in various commercial and
residential property projects, including investment-grade office
and warehouse sites.
After completion of the Acquisition the executive management
team of the Enlarged Group's Business will comprise Ben Walgate as
chief executive together with the existing vineyard manager of the
Gusbourne Estate Business and existing wine maker employed by
Shellproof Wines. The other key roles of sales and marketing and
finance will be covered by existing resources available to the
Enlarged Group. Andrew Weeber, in his role as chairman, will
provide a key role in the further development of the Enlarged
Group.
Further information on Board shareholdings is provided below and
save as disclosed in that paragraph and above, there is no further
information to be disclosed pursuant to schedule 2 (g) of the AIM
Rules.
MANAGEMENT AND MANAGEMENT INCENTIVES
The executive management team of the Enlarged Group will
initially comprise Ben Walgate as Chief Executive, Jon Pollard as
vineyard manager and Charles Holland as winemaker. The finance and
sales and marketing functions will continue to be supported for the
time being by existing outsourced arrangements.
Brief details of Jon Pollard and Charles Holland are as
follows:
Vineyard manager - Jon Pollard
Jon Pollard holds an honours degree in general agriculture from
the University of Aberdeen and is also a graduate in wine studies
from Plumpton College. He has been at Gusbourne since its first
vines were planted in 2004 and has worked closely with AW over the
past nine years to establish the vineyards at Gusbourne. Jon will
supervise the establishment of the new vineyards in Kent and West
Sussex as well as the on-going maintenance of the existing mature
vineyards.
The vineyard manager will have a close working relationship with
the winemaker, to ensure the quality and consistency of the final
product.
Winemaker - Charles Holland
Charles Holland holds a BSc in Viticulture and Oenology from
Plumpton College. He has held a number of overseas wine making
positions including positions in New Zealand and California and in
recent years he has been winemaker at one of England's best known
wine producers which has itself won a number of high profile
international awards.
The Directors propose to adopt an appropriate long term
incentive scheme, which would enable management to acquire up to a
maximum 10 per cent. of the issued share capital of the Company
(inclusive of this incentive stake), in the form of market price
options that would not vest for at least three years and be subject
to key performance criteria satisfactory to the Company. Those
criteria are expected to include the achievement of an agreed
compound annual growth rate in the Company's share price with a
linear scale starting at an agreed minimum level of achievement,
with the maximum payout based on the agreed high end of the
achievement scale.
DIVIDEND POLICY
For the foreseeable future, it is anticipated by the Directors
that the Company will not pay dividends but will preserve any
surplus cash for business development purposes. This policy will be
reviewed on an at least annual basis.
ADMISSION
It is expected that on or about 27 September 2013, Admission
will take place and that dealings will commence on that date. The
Shellproof PLC Shares are issued in registered form and may be held
either in certificated or uncertificated form.
BANK DEBT
Barclays have agreed to lend Shellproof Wines GBP2,000,000 to
fund the Acquisition. The facility is repayable after 5 years, is
subject to interest at a rate of 3% above Barclays' base rate and
is to be secured by a cross guarantee and debenture to be granted
by Shellproof Wines and the Company, a legal charge to be granted
by Shellproof Wines and a charge over a cash deposit to be granted
by the Company.
RELATED PARTY TRANSACTION
As at 2 September 2013, being the latest practicable date prior
to the publication of the admission document, posted to
Shareholders today, Lord Ashcroft KCMG PC, a substantial
shareholder in Shellproof PLC, was interested in 6,093,617
Shellproof PLC Shares, representing approximately 76.2 per cent of
the Existing Ordinary Shares. Due to the extent of Lord Ashcroft's
beneficial shareholding in Shellproof PLC, his participation in the
Placing is classified as a related party transaction as defined by
the AIM Rules. The Directors, having consulted with Cenkos, the
Company's nominated adviser, consider that Lord Ashcroft's
participation in the Placing is fair and reasonable insofar as
Shareholders are concerned.
ENLARGED SHAREHOLDINGS POST ADMISSION
Shareholder Number of Ordinary Shareholding as a percentage
Shares in the Enlarged in the Enlarged Group
Group
Lord Ashcroft KCMG
PC 9,798,801 64.4%
------------------------ -----------------------------
Andrew Weeber* 1,944,444 12.8%
------------------------ -----------------------------
Paul Bentham 610,740 4.0%
------------------------ -----------------------------
Ian Robinson 66,442 0.4%
------------------------ -----------------------------
Benjamin Walgate 60,000 0.4%
------------------------ -----------------------------
Andrew Wilson 20,000 0.1%
------------------------ -----------------------------
*Held jointly with his wife, Caroline Mary Weeber.
CORPORATE GOVERNANCE
The Company intends following Admission, so far as is
practicable and appropriate for a company of its size and nature,
to comply with the provisions of the UK Corporate Governance
Code.
The Board is responsible for formulating, reviewing and
approving the Enlarged Group's strategy, budgets and corporate
actions. The Directors intend to hold meetings of the Board at
least 4 times per annum, and at other times as and when required.
The Company has established audit and remuneration committees with
formally delegated duties and responsibilities.
CHANGES OF NAME
To reflect the proposed changes to the Company as a result of
the Acquisition, it is proposed that Shellproof PLC will change its
name to Gusbourne PLC pursuant to Resolution 5 in the Notice and
Shellproof Wines Limited will change its name to Gusbourne Estate
Limited by way of separate written resolution.
ACTION TO BE TAKEN BY SHAREHOLDERS
Enclosed with the admission document, posted to Shareholders
today and available on the Company's website www.shellproofplc.com,
you will find a form of proxy for use by Shareholders in connection
with the General Meeting. Whether or not you intend to be present
at the General Meeting, Shareholders are asked to complete, sign
and return the form of proxy to the Registrar as soon as possible
but in any event so as to arrive no later than 11.30 a.m. on 24
September 2013. The completion and return of a form of proxy will
not preclude Shareholders from attending at the General Meeting and
voting in person should they wish to do so. Accordingly, whether or
not Shareholders intend to attend the General Meeting, they are
urged to complete and return the form of proxy as soon as
possible.
Shareholders should note that there is a separate form of proxy
for use by Shareholders in connection with the AGM. This can be
found in the notice of AGM, which is enclosed with the admission
document.
IRREVOCABLE UNDERTAKINGS
The Company has received irrevocable undertakings in relation to
6,140,059 Existing Ordinary Shares, representing approximately
76.8% of the Existing Ordinary Shares, to vote in favour of the
Resolutions.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this admission 3 September 2013
document
Latest time and date for receipt 11.30 a.m. on 24 September 2013
of completed forms of proxy to
be valid at the General Meeting
--------------------------------
AGM 11.00 am on 26 September 2013
--------------------------------
General Meeting 11.30 a.m. on 26 September 2013
--------------------------------
Completion of Acquisition and 8.00 a.m. on 27 September 2013
Admission
--------------------------------
Despatch of definitive share by 11 October 2013
certificates, where applicable
--------------------------------
PLACING STATISTICS
Placing Price 54 pence
Number of Shellproof PLC Shares
prior to Admission 8,000,003
----------------
Number of Placing Shares 5,280,367
----------------
Number of Vendor Shares 1,944,444
----------------
Enlarged Share Capital on Admission 15,224,814
----------------
Market capitalisation of the GBP8.2 million
Company on Admission at the Placing
Price
----------------
Gross proceeds of the Placing GBP2.85 million
----------------
New AIM 'ticker' on Admission GUS
----------------
DEFINITIONS
Acquisition the acquisition by Shellproof
Wines of the Gusbourne Estate
Business and Freehold Property
pursuant to the Acquisition Agreements;
Acquisition Agreements (a) the asset purchase agreement
relating to the Gusbourne Estate
Business between (1) AW and (2)
Shellproof Wines dated 2 September
2013; and
(b) the contract for sale of
the Freehold Property between
(1) the Vendors and (2) Shellproof
Wines dated 2 September 2013;
-----------------------------------------
Admission admission of all of the Shellproof
PLC Shares, the Placing Shares
and the Vendor Shares to trading
on AIM;
-----------------------------------------
AGM the annual general meeting of
the Company to be held at the
offices of Cenkos Securities
plc, 6.7.8 Tokenhouse Yard, London
EC2R 7AS at 11.00 a.m. on 26
September 2013;
-----------------------------------------
AIM a market operated by the London
Stock Exchange plc;
-----------------------------------------
AIM Rules the rules of AIM as published
by the London Stock Exchange
plc from time to
time;
-----------------------------------------
AW Andrew Carl Vincent Weeber;
-----------------------------------------
Bank Debt the debt to be granted by Barclays
to Shellproof Wines;
-----------------------------------------
Barclays Barclays Bank plc;
-----------------------------------------
Business Day any day (other than a Saturday
or Sunday) on which banks are
open in London for normal banking
business;
-----------------------------------------
CREST the relevant system (as defined
in the Uncertificated Securities
Regulations) for the paperless
settlement of share transfers
and the holding of shares in
uncertificated form in respect
of which CRESTCo Limited is the
operator (as defined in those
Regulations);
-----------------------------------------
Directors or Board the directors of Shellproof PLC;
-----------------------------------------
Enlarged Group the Company and its subsidiaries
following completion of the Acquisition
and any subsidiaries or businesses
it may acquire following Admission;
-----------------------------------------
Enlarged Group's Business the business of the Enlarged
Group;
-----------------------------------------
Enlarged Share Capital the enlarged share capital of
the Company following Admission
comprising (i) Existing Ordinary
Shares; (ii) the Placing Shares;
and (iii) the Vendor Shares;
-----------------------------------------
Existing Business the business of the Company and
its subsidiaries prior to completion
of the Acquisition;
-----------------------------------------
Existing Ordinary Shares the existing share capital of
Shellproof PLC comprising 8,000,003
ordinary shares of 50 pence each;
-----------------------------------------
Freehold Property 352 acres of freehold land and
buildings including 50.8 acres
of mature vineyards as well as
over 100 acres of additional
land suitable for further vineyards
at the Gusbourne Estate, Kennardington
Road, Ashford, Kent;
-----------------------------------------
FBT Sites two fields, comprising approximately
65.9 acres, near Chichester,
West Sussex, over each of which
the Company has a 50 year farm
business tenancy agreement and
each of which were planted in
May 2013 with 44.3 acres of vines
suitable for the production of
English sparkling wine;
-----------------------------------------
General Meeting the general meeting of the Company
to be held after the AGM at the
offices
of Cenkos Securities plc 6.7.8
Tokenhouse Yard, London EC2R
7AS at 11.30 a.m. on 26 September
2013 in relation to the approval
of the Acquisition, authority
to allot the Placing Shares and
the Vendor Shares, the change
of name of the Company and to
adopt new articles of association;
-----------------------------------------
Group Shellproof PLC and its 100% owned
subsidiary Shellproof Wines;
-----------------------------------------
Gusbourne Estate the Gusbourne estate, near Ashford,
Kent, from which the Gusbourne
Estate Business is operated and
of which the Freehold Property
forms part;
-----------------------------------------
Gusbourne Estate Business the grape cultivation wine production
and distribution business currently
owned by AW including the related
Gusbourne brand and goodwill
of that business together with
all wine stocks and plant and
machinery;
-----------------------------------------
Notice the notice convening the General
Meeting, which is set out at
the end of the admission document;
-----------------------------------------
Official List the Official List of the UK Listing
Authority;
-----------------------------------------
PB Paul Gerald Bentham;
-----------------------------------------
Placees those persons subscribing for
or purchasing the Placing Shares
in the Placing at the Placing
Price;
-----------------------------------------
Placing the placing by Shellproof PLC
of the Placing Shares with Placees;
-----------------------------------------
Placing Price the issue price of 54 pence for
each Placing Share;
-----------------------------------------
Placing Shares the 5,280,367 Shellproof PLC
Shares to be issued pursuant
to the Placing;
-----------------------------------------
Proposed Directors AW and PB;
-----------------------------------------
Resolutions the resolutions set out in the
Notice which is contained at
the end of the admission document;
-----------------------------------------
Shareholders the shareholders of the Company
from time to time;
-----------------------------------------
Shellproof PLC or the Company Shellproof PLC, a company incorporated
in England and Wales with registered
number 08225727, proposed to
be re-named Gusbourne PLC;
-----------------------------------------
Shellproof PLC Shares ordinary shares of 50 pence each
in the capital of Shellproof
PLC;
-----------------------------------------
Shellproof Wines Shellproof Wines Limited, a wholly
owned subsidiary of Shellproof
PLC being a company incorporated
in England and Wales with registered
number 07665948, proposed to
be re-named Gusbourne Estate
Limited;
-----------------------------------------
Vendor Bond the deep discount bond to be
issued to the Vendors pursuant
to the terms of
the Acquisition;
-----------------------------------------
Vendor Shares the 1,944,444 Shellproof PLC
Shares (with a subscription value
of GBP1,050,000, calculated by
reference to the Placing Price)
to be issued to the Vendors pursuant
to the terms of the Acquisition;
-----------------------------------------
Vendors AW and Caroline Mary Weeber.
-----------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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