Naked Wines issues bonds to fund blends2nd September, 2013 by Patrick Schmitt
Naked Wines is hoping to raise between £3-5m to support fine wine making in California, Australia and South Africa using bonds which pay interest in cash or wine.
The online retailer founded by former Virgin Wines MD Rowan Gormley is renowned for its novel approach to funding winemakers, and currently has 120,000 “angels” – customers who subscribe £20 a month to invest in winemakers, in return for lower prices.
However, this new initiative is focused on top end wines and will see customers invest between £500 and £10,000 to receive annual gross interest of 7% in cash, or 10% in wine credits to spend at Naked Wines.
Called “The Fine Wine Bond”, it has a maturity of three years, at which point bondholders can either receive the total original investment in cash or receive an additional 10% premium if they choose to have the investment credited to a Naked Wines UK account for purchasing wine.
The bond offer opens today (2 September) with a minimum investment of £500 and maximum of £10,000. It will remain open for four weeks, although the company has said that it reserves the right to scale back applications if the issue is subscribed over the maximum subscription of £5 million.
Defining a fine wine as one that needs more than a year to mature and develop from harvesting to reaching the consumer, Gormley said: “Ultimately fine wines require more time to mature, meaning we also need a longer-term source of funding in order to give the winemakers the financial assistance they need.”
Continuing he explained, “Doing it this way means the winemakers can focus on what we want them to do – make great wines – rather than spend their time and money selling.”
Having chosen to invest in top end wines in California, Australia and South Africa, Naked Wines stressed that regions other than Bordeaux and Burgundy, “are capable of producing wines that blind taste tests rate as equivalent or even better than the classic regions”.
Naked Wines will be investing in several winemakers, but three examples of those lined up to take part in the initiative can be viewed over the following pages. Meanwhile, for more about the Fine Wine Bond click here.