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French producer turns to crowdfunding
A Burgundy producer is hoping to raise at least £1.9 million by offering shares through a campaign hosted by UK-based crowdfunding platform Seedrs.
Domaine Chanzy, which owns more than 32 hectares of vineyard across Burgundy, is offering the public a chance to invest from £10 upwards in what is thought to be the first example of a company using crowdfunding to conduct its Initial Public Offering (IPO).
Rescued from bankruptcy in 2012 by private equity firm Olma Invest, last year the Bouzeron-based producer expressed its ambition to become the first French vineyard to be listed on the London Stock Exchange.
Its crowdfunding approach opens up the producer’s offer to a wider range of investors, whose shares will be held by Seedrs meaning that they will not need to set up a trading account. Investors will then be able to sell their shares on AIM, a branch of the London Stock Exchange that caters for smaller businesses.
Investors who purchase at least 1,000 shares, which are priced at 120 pence each, will be offered discounts of up to 55% on Domaine Chanzy wines. These range from its entry level offerings right up to grand cru expressions including Echezeaux, Clos de Vougeot, Chambertin and Bonnes Mares.
The funds raised will be used to expand the producer’s distribution network and create “a new Burgundy wine brand targeted primarily at overseas consumers”.
Philippe Der Megreditchian, CEO of Domaine Chanzy, confirmed that the producer “will be unique in being the only French wine specialist listed in London as well as the only French company listed on AIM.”
Explaining the move, he commented: “We have ambitions to be one of the top wine producers in Burgundy and this unique approach to listing on AIM via crowdfunding will enable us to reach a wide investor base and deliver on our strategy.”
Jeff Lynn, CEO & co-founder of Seedrs, said: “Seedrs is developing a reputation for achieving ‘firsts’ in the financial services industry for crowdfunding. Investors and companies trust us to provide a secure and transparent platform for their transactions, so it was a natural next step for us to work with Domaine Chanzy to enable this unique IPO.”
Highlighting the appeal of its offer, he added: “with the great potential that Domaine Chanzy’s business has, combined with the extensive wine discounts on offer, we think this is going to be a very popular opportunity among investors.”
The move echoes a similar initiative by English wine and beer producer Chapel Down, which last year raised £2.9m towards its own expansion plans in just 10 days by offering shares through Seedrs.
Be aware that many of the wines offered under the name “Domaine” are in fact coming from purchased grapes and offered under the name Maison Chanzy which a negoce house.
Just have a look at their website, they do not own any vineyards in the Grands Crus Cote de Nuits. Their only holding there is a small plot in Vosne Romanee village which every one in Burgundy talked about recently as their pickers in 2014 harvested the neighbour’s vineyard!!!!!
The potential investor should not go further without receiving satisfactory answers to the following questions:
Why do the british Burgundy specialists (A. Hanson, C. Coates, J. Morris et al.) unananimously steer clear of this estate, as well as the major French guides (Revue du Vin de France, Bettane & Desseauve etc.) not to mention the US ones?
What is the current reputation of these wines and do they feature on the wine list of any respected restaurant, wine merchant, retailer…?
Why did the estate go bankrupt and what means (apart from crowfunding) are taken to avoid another bankrupcy?
What are the exact holdings of the estate in such illustrious grans crus as chambertin, clos vougeot etc., how many grand crus bottles are produced to be made available to the lucky owners of 1000 shares at “discounts of up to 55%”?
Why target “primarily overseas consumers”? Is it the best way to build a reputation and image?
Sounds like great idea however a real shame that they’ve chosen to claim that they are the first company to IPO using crowdfunding equity when they are not. That accolade goes to Mill Residential REIT plc – already successfully trading on AIM since 2014 with ticker MRR. Whoops!