Chocolate shop chain Hotel Chocolat said it was set to repay £6.4million of its ‘chocolate’ mini-bonds it had issued in 2010 and 2014.
Mini-bonds are a special type of loan which sees investors being paid interest in the form of products made by the company, instead of hard cash.
In this case, Hotel Chocolat ‘issued two bonds which paid a return in the form of luxury boxes of chocolate or Hotel Chocolat Gift Cards’.
Chocolate bonds: Hotel Chocolat said the proceeds helped it develop sustainable cocoa projects
Mini-bonds, unlike retail bonds, are not listed on the London Stock Exchange’s Orb market.
This means that investors can’t sell their holding on, and instead need to wait until the maturity date to get their capital back.
They have become fashionable over the past decade, but investors have been warned that these products are high-risk.
Buying company debt via bonds like these means that the money investors make back depends on the firms issuing them not going bust.
Hotel Chocolat said it used the bonds proceeds to grow the company and develop sustainable cocoa projects in St Lucia and Ghana.
Hotel Chocolat shares were 1p higher at 275p.