After months of a divestment strategy and restructuring program to reduce debt, Mighty Craft has gone into voluntary administration after the collapse of a proposed merger with Better Beer. Liam Healey and Quintin Olde from restructuring company, Ankura, have been appointed administrators.
Mighty Craft also had a debt repayment deadline looming, having reached an agreement with the ATO in February to pay its outstanding liability of just over $8.8 million on 31 July. And a $2.5 million extension of a bridging loan from its lenders and creditors due on 17 August.
The proposed merger between Mighty Craft and Better Beer required the support of Mighty Craft's senior lenders and Better Beer’s shareholders, but an agreement couldn’t be reached.
In a statement to the ASX, Mighty Craft say, “The directors therefore formed the opinion that the company should be placed into voluntary administration to evaluate options for the company to continue as a going concern, or if this is not possible, that an administration will result in a better return for the creditors and members of the company than would otherwise result from an immediate winding up of the company.”
The administrators have confirmed the company, and its subsidiaries will continue on a business-as-usual basis.
In 2021, Mighty Craft acquired the South Australia’s Adelaide Hills Group – Adelaide Hills Distillery, Mismatch Brewing Co and Hills Cider – for $47 million.
The acquisition consists of a $27 million cash payment and $20 million in Mighty Craft’s shares and was set to transform the company into a scaled alcohol producer, wholesaler, and retailer, as well as create one of the largest craft spirit producers in Australia.
That year it also signed a heads of agreement with Torquay Beverage Co (TBC) regarding The Inspired Unemployed’s low carb beer, Better Beer, to acquire a stake in the company and participate in a rights issue for TBC to fund the working capital given the scale of the launch.
At the end of 2023, the company has listed eight brands as held for sale, resulting in a $40.7 million non-cash impairment presented as discontinued operations. Slipstream Brewing Company, Mighty Hunter Valley, Kangaroo Island Spirits, Hills Distillery, Mismatch Brewery, Lot. 100, and Foghorn Brewery were all listed as held for sale.
This year, it sold Hills Cider, Mismatch Brewing, 78 Degrees, and other assets to a pub and investor consortium led by Former CEO of Carlton & United Breweries (CUB), Peter Filipovic.
