English wine producer Chapel Down is to launch a fundraising of up to £6.876m, through a combination of the placing of new ordinary shares and a crowdfunding campaign.

The business said the fundraising was conditional upon the company receiving binding applications form subscribers for ordinary shares, including the placing and crowdfunding campaign, in which it is looking to raise approximately £1.42m and £5.45m from, respectively.

The crowdfunding campaign opens today (4 June), in partnership with Seedrs.

Chapel Down, which published its financial results for the year to 31 December 2020 today, said the proceeds of the fundraising would be used in a number of areas including the scaling up of its winery operations, increasing brand awareness, and meeting the changing needs of consumers by extending its e-commerce platform to be capable of international expansion.

Last year saw the business’s beer and cider business – with around 90% of its sales in the hospitality sector – badly impacted by the lockdowns, with beer and cider sales in Curious Drinks – recently acquired by a new company under the direction of Risk Capital Partners – down 52% to £2.26m, and gross profit down 63% to £0.45m.

However its wine sales volumes were up by 38%, reflecting the growing demand for its products despite losing approximately a third of its business in the on licensed trade and own retail shop sales due to the restrictions, it said.

Frazer Thompson, chief executive, Chapel Down, said: “As we start to emerge from the crisis, Chapel Down’s wine business is now in much better shape. There is a great deal of excitement around English wine. In Chapel Down we have the leading brand with a growing reputation, the broadest distribution, a rapidly growing on-line business and huge potential for growth as the quality of our wines improve every year.

“It was also a heart-breaking year for the Curious Brewery which was hamstrung by the closure of the hospitality business for most of 2020. With the need to support the rapid growth of our core wine business and the need to transform the sales towards e-commerce and off sales successfully and quickly, the beer business became unsustainable for us. I am pleased that we were able to dispose of it without further redundancies and to new owners who will invest.”

The business also announced that it had entered into a master facilities agreement with PNC Business Credit for the provision of up to £15m asset-based lending facilities, comprising a £3m property term loan facility and up to £12m revolving inventory and receivables finance facilities.