GlenWyvis is a gin and whisky distillery – but one with a significant difference. Established as a Community Benefit Society, GlenWyvis has been largely crowd funded by over 3,000 ‘investors’ who share the vision of owning part of a new Scottish distillery. With the rejuvenation of the local community as a central objective, the aim is to develop Dingwall into the leading craft distillery town of Scotland with GlenWyvis providing a quality visitor destination on the North Coast 500 tourist route.
High quality whisky and gin production relies heavily on steam, and the team at GlenWyvis were determined that any boiler should be both energy efficient and environmentally sound, but for this they needed additional funding beyond that already secured.
The GlenWyvis team urgently needed to find the right funder to work with the installers to get the all-important boiler and distillation plant up and running on time for their opening in November 2017. However, being quite a new company, with only one year of craft gin sales behind them at the point of needing finance – they knew that many traditional lenders would reject their applications outright. Their business model was also dependant on additional rounds of future funding, so they needed a funder with the flexibility to think outside of the usual parameters and see the community project for the great opportunity it is.
With the GlenWyvis team working closely with James Waterson and Mark Banks from Close Brothers, it was agreed that to meet both environmental and funding ambitions, the most suitable option was an eco-friendly Binder biomass boiler generating steam to the distillation plant that had been supplied by Forsyths of Rothes.
The funding solution agreed was a Sale and Hire Purchase Back agreement, which would protect GlenWyvis’s cashflow until the Renewable Heat Incentive payments commenced and the distillery started to earn additional revenue income from on-site distilling and increased sales.
The payment structure for the steam boiler is a simple and flexible one - two quarters of ‘low start’ repayments, with an increase at a later time to suit the business.
This was an unusual transaction, needing a funder that:
- Had local knowledge and understood the importance of this business to the community
- Could make quick credit decisions
- Had the flexibility to lend to a fairly new company
- Understood the whisky and drinks sector along with having the requisite specialised asset knowledge
James Waterson, Renewable Energy & Intermediaries, Close Brothers Asset Finance: “This relationship was a natural fit for Close Brothers as it relates to both the renewable energy sector and the drinks industry, two areas we have specialist knowledge of and actively involved in. Our interest in supporting GlenWyvis to build their business, coupled with the very special Highland community involvement in this project, made this a unique opportunity that Close Brothers is very proud to be a part of.”
John McKenzie, Managing Director and Founder, GlenWyvis Distillery: “Our Finance Director here at GlenWyvis, Hazel Allen, worked closely with James from an early point to ensure that the lending was available at the right time. Their planning focused around the commissioning of the distilling equipment – as this provided the tangible and necessary security for all parties. As we now move into the production phase, this finance package will prove to be a key element in the business planning for the early operational years at GlenWyvis.”