The steps have been taken in order to support Britain’s oldest brewer, established in 1698, for the long term and to take advantage of new opportunities arising over the coming years.
‘Heartland’ development
The new structure provides Shepherd Neame with £107.5m of committed, long term, facilities and provides certainty of funding for the business’s growth plans, according to a statement from the brewer and operator.
It also provides a lower rate of interest than the debt being replaced, an improved debt maturity profile - with a revolving credit facility expiring in 2023, and private placement expiring in 2038 – and new debt partners who, according to Shepherd Neame, share and support their long-term focus and strategy.
The announcement comes as major infrastructure and housing development is forecast to take place across what Faversham, Kent, based Shepherd Neame describes as it’s “heartland” in Kent and the south-east before 2030, most notably the development of Ebbsfleet Garden City where Shepherd Neame acquired a site in early October 2018.
Moreover, it accompanies predictions that Kent’s population is to grow by 20% over the same period.
Key features
According to Shepherd Neame, net debt stood at £74.8m for the 53 weeks ended 30 June 2018.
A Shepherd Neame statement outlined a private placement raising £35m as a key feature of the brewer and operator’s new financing structure.
Moreover, BAE Systems Pension Funds Investment Management Ltd (“BAE Pension Fund”) will receive loan notes at a fixed interest rate of 3.99% for 20 years – an agreement replacing part of the current term loan expiring in 2026.
As a result of this, £37.5m of this loan has been cancelled and repaid.
Additionally, a new five-year revolving credit facility of £50m with Lloyds Bank and Santander UK – maturing in 2023 – replaces the existing facility of £45m that was due to expire in 2020.
Ensuring a strong position
As reported by The Morning Advertiser, Shepherd Neame revealed rising profits and turnover for the 53 weeks ended 30 June 2018.
Commenting, Jonathan Neame, chief executive of Shepherd Neame, explained: “Our new financial structure will ensure Shepherd Neame is in a strong position to take advantage of opportunities in the sector.
“We are a business focused on the long-term and the new extended arrangement, at a lower interest rate than our previous one, will ensure that we are well-positioned to capitalise on the major infrastructure and housing developments that we expect to be delivered across our heartland in the coming years.”