Dartington Hall Estate Bond plc - Offer Overview
- Company : Dartington Hall Estate Bond plc
- Listing: NEX Growth Market
- Offer Type: Property-Backed Secured Retail Bond Offering
- Coupon Rate: 4.3% paid 6 monthly
- Term: 10 years
- Raising: Minimum raise £7.5m and £20m maximum
- Closing: 29th March 2019
- The Trust intends to issue £36m in bonds. This will be in up to three tranches as follows:
→This first phase of the Bonds - £15m targeted, with a minimum of £7.5m and a maximum of £20m, issued in FY19 (2018/19).
→£10m issued in FY20 (2019/20)
→£11m in FY21 (2020/21)
- The Dartington Hall Trust can offer investors the opportunity to participate in the retail issue, and potentially in the future issuance programme.
- The bonds will be issued by a plc formed as a wholly-owned subsidiary of the Dartington Hall Trust, itself a Company Limited by Guarantee. Funds raised in the plc as an issuance vehicle will be lent on to the Trust.
- The bonds are to be property backed: the loan from the plc to the Trust will be secured against unencumbered freehold property owned by the Trust. The bonds, through the auspices of a security trustee, will be secured against the intercompany loan to the trust.
Use of Proceeds
- The anticipated proceeds of the proposed fundraisings are intended to cover a range of capital expenditure projects across Dartington’s estate. Of the total fundraising targeted, the Bond proceeds, together with proposed Senior Debt, an £8.3m planned development loan and £10m of proposed fundraising in 2019 are intended to be applied as follows:
→ Capital expenditure £26,900,000
→ Operating investment in key capacity building new posts, IT and digital infrastructure and estate maintenance over the first two years after the issue £800,000
→ Interest and bank and related finance charges for first 3 years £2,800,000
→ Contingency or carried forward to future project elements £3,800,000
→ Total = £34,300,000
- The trust has been loss-making, clearly any new strategy/turn-around is not guaranteed and presents risk.
- Any changes to the property market present risk.
- Legal risk exists should the government change laws/taxation relating to charitable trusts.
- Negative publicity could adversely affect the Group’s brand, business, and revenue.
- Key person risk exists in that the loss of members of the management team could impact on the business.
- Assumed growth figures and future business is not guaranteed and could impact on profit assumptions.
- Usual risks relating to initial retail bond offerings.
- There is liquidity risk in that the bond may not trade frequently or in volume.
*Please note that these risks represent the judgement of Cornhill Capital, there may be additional risks represented in the prospectus
Conflict of Interest
- Cornhill Capital are receiving remuneration for their participation in this fundraise