Edinburgh-based Artisanal Spirits Company plc (ASC), owner of The Scotch Malt Whisky Society (SMWS), announce that it has agreed a new financing facility of £15 million through a new partner, Ferovinum.
Artisanal said the facility gives the group “further financial flexibility and optionality to develop its business via recognition of the significant appreciating cask spirit asset base.”
Ferovinum said it is a “first-of-its-kind funding platform, backed by international clearing banks and financial institutions, designed exclusively for the wine and spirits industry.”
It said: “Ferovinum has created a ring-fenced platform that holds assets during production, storage and distribution, allowing companies to convert their maturing stock into a just-in-time asset.
“This flexibility allows businesses to access capital when they need it, reducing their liquidity risk and reliance on payment terms, as well as protecting profitability should supply chain disruptions occur.
“Ferovinum clients can also take advantage of supply chain and inventory management tools to access automation and reduce the operational burden of getting their products into the hands of consumers.”
Artisanal added: “As part of the initial agreement, Ferovinum have extended to ASC £2.6m in cash, through a cask spirit parcel valuation of £3.8m at 70% loan to value ratio, for a maximum period of two years with the same headline interest margin as ASC’s existing RBS banking facility.
“The Ferovinum platform allows ASC to convert their maturing stock into a just-in-time asset at a truer market valuation.
“Of the casks within the initial transaction, the Net Book Value held on the balance sheet is £0.8m, the current bank valuation is £1.3m and Ferovinum’s valuation, using market, external and internally generated intelligence is £3.8m, representing a 380% and 191% incremental valuation on the net book value (NBV) and bank value respectively.
“The facility allows the group additional financial headroom and a larger financial pool from which to draw, rather than an increase in the overall debt level, as we balance this new facility and the existing RCF facility.
“The group’s debt position therefore remains as previously guided.”
Artisanal Spirits Company CEO Andrew Dane said: “This is an exciting development giving the group further financial flexibility without increasing gross debt whilst demonstrating the value of the group’s assets.
“ASC has two value streams: the core trading business and its inventory where the value of our spirit casks has been proven by Ferovinum extending capital at retail valuations underpinning the worth of our inventory, providing financial flexibility and giving us further confidence in the Company’s investment strategy and asset base.”