A Fife distillery plans to sever its ties with Russian investors and move to 100% Scottish ownership.
Lindores Abbey Distillery in Newburgh is majority owned by a holding company controlled by four Russian nationals. It has loaned the Fife business more than £10 million pounds.
Following Russia’s invasion of Ukraine, Lindores’ Russian directors have agreed to resign their positions.
Negotiations are now under way to return the company to Scottish ownership.
The distillery’s opening in 2017 was the result of almost 20 years of planning by founder Drew McKenzie Smith, whose grandfather purchased Lindores Abbey Farm in 1913.
It returned distilling to the historic site after a break of 523 years.
His dream was made a reality after being introduced to Russian investors by Scottish Enterprise around eight years ago.
More than 75% of Lindores Distilling Co Ltd is owned by Spirex Ltd, a holding company owned by four Russian nationals – Anton Buslov, Sergey Fokin, Sergey Uryadov and Dmitry Morgunov.
Mr Buslov and Mr Fokin are currently listed as directors of Lindores Abbey Distilling Co at Companies House. They have been involved in the company since 2015.
Statement from Lindores Abbey Distillery
Mr and Mrs McKenzie Smith retain a minority shareholding and issued a statement in “response to the current situation and the many questions being asked of us”.
It said: “Lindores Abbey Distillery is a Scottish company based in Newburgh, Fife that produces single malt whisky utilising barley only from local farms.
“Our employees are Scottish based and their livelihoods and those of their families depend the company’s ability to continue to operate.
“We have never hidden the fact that we have Russian investors and indeed these investors were introduced to us by Business Gateway, a Scottish Government agency.
“They are certainly not oligarchs and certainly not on any sanctions list. They are first and foremost whisky lovers.”
“We at Lindores however, utterly deplore and condemn the current situation in Ukraine.
“We have been in frequent discussions with our Russian shareholders and today they are resigning as non-executive directors of the company.
“We’re currently also in negotiations with them to try and agree a situation whereby the McKenzie Smith family will acquire their shareholding thus moving the company to 100% Scottish ownership and control.
“The on-going support of our staff, members of the 1494, customers and suppliers at this time is hugely valued.
“These are more than trying times for very many people.
“First and foremost for those in the Ukraine but to a lesser extent for anybody who has been dragged into a situation not of their own making.
“We hope that everyone understands our immediate concern is to protect local jobs and the ongoing health of the company.”
£10.4m loans from Russian investors to Fife distillery
The most recent Lindores Abbey Distillery accounts show loans of £10.4 million due to Spirex Ltd.
£9.9m of loans are “interest free and repayable on demand”. A £500,000 loan carries an interest rate of 4.5%.
In a subsequent comment to The Courier, Mr McKenzie Smith said he would not comment on financial matters due to the business “being in the middle of negotiations”.
The managing director said the Russian investors came on board after being unable to find funders in Scotland.
He said: “We tried for many, many years to find investors from Scotland but none came forward.
“It was thanks to this introduction via the Government agency that we were able to preserve the spiritual home of Scotch whisky, build the distillery and become the largest employer in our community which suffers from high unemployment.
“We decided to make a public statement as false information was being reported about the company on social media.
“We wanted to reassure our customers, staff and members of our position and have been overwhelmed by their support following the statement.”
Last Spring the distillery’s first Scotch whisky, the 1494, was released.
