SMWS owner secures £15m financing
The owner of the Scotch Malt Whisky Society (SMWS) has agreed a new financing facility worth £15 million (US$18.7m).
The agreement is with new partner Ferovinum. As part of the initial agreement, Ferovinum has extended to The Artisanal Spirits Company, owner of the SMWS, £2.6m (US$3.2m) in cash through a cask spirit parcel valuation of £3.8m (US$4.7m) at a 70% loan-to-value ratio, for a maximum of two years with the same headline interest as The ASC’s current RBS banking facility.
Ferovinum will enable The ASC to convert maturing whisky stock into a just-in-time asset at a truer market valuation.
The casks that form the initial transaction hold a net book value on the balance sheet of £0.8m (US$994,764). The current bank valuation is £1.3m (US$1.6m) and Ferovinum’s valuation, using market, external and internally generated intelligence, is £3.8m – a 380% and 191% incremental valuation on the net book value and bank value respectively.
Andrew Dane, CEO of The ASC, 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 spirits 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.”
The funding allows The ASC to draw money from a ‘larger financial pool’ as opposed to increasing its overall debt level. The company’s debt position remains the same as previously guided.
The second quarter of The ASC’s 2023 fiscal year was an improvement on the group’s first quarter, when sales were flat.
In October, Edinburgh-based SMWS set a world record for the biggest online whisky tasting, with drams shared in more than 15 countries.