Wayward Brewing and the Local Drinks Collective (LDC) distribution company they launched with Batch Brewing Co in 2022 have exited a period of voluntary administration with the existing owners still in charge.
The news comes just over three weeks after they entered administration, looking to return the two operations to a cash flow positive state, and describing the move as the last stage of restructuring the business. After a creditors' meeting today (January 24), the owners of the Camperdown-based brewing company agreed to pay ten cents on the dollar to creditors.
Peter Philip, director of both companies, told The Crafty Pint that today's decision secures the jobs of his employees, and said it was very much business as usual for Wayward and LDC.
"We struggled with the decision," he says of the move to enter administration. "It wasn't an easy one to come to. I explored all other options, tried to raise some capital, but there was no other option."
He says that, as sole director, he is funding the DOCA, and remortgaging his house to do so, adding: "This was to protect the company and protect 40 jobs. Forty people are still employed. The ATO and other creditors have lost out; I'm sorry but that's what I had to do as a director."
In an article published on the site earlier today, we touched upon the ripple effect the spate of VAs over the past year and more can have on the industry, not just directly on the suppliers and other creditors who take a financial hit, but on peers in the industry who can find new conditions imposed on them by suppliers and the ATO as a result.
Peter says that, from the perspective of a business that's been through administration: "What a lot of people don't understand is that, going through the process, you kind of become a pariah: everybody just cracks down on you."
The result of changed conditions on his companies, he says, is that working capital requirements "have gone through the roof", describing the situation as akin to "being back at the beginning when you're starting a business."
"I understand that there can be a lot of sour grapes, and if people are solvent and doing the right thing I appreciate that and applaud what they are doing. But we had no choice," he says, adding: "It's not an easy process, and I wouldn't wish it on my worst enemy."
Looking ahead, he said Wayward will continue to operate as beforehand, continuing to explore other sectors of the drinks market. They recently launched a hop water and have also introduced a citrusy drink inspired by the likes of Suntory 196.
"If independent craft beer is in a bit of a slump – and it is, but that's not going to last forever," he says, "then if 20-year-olds want to drink a citrusy, Sochu-based drink we'll make them."
He also says there are ongoing discussions with other breweries that he expects will lead to more joining the Local Drinks Collective.
As for the experience of recent weeks, he says: "The support from customers and the community has been amazing. We've seen a bump in trade at the taproom; everybody has been coming in asking how they can help. I'm sure that's a short-term thing but it has been very appreciated. The outpouring from independent brewers has been great.
"I believe in the industry and want it to succeed. I want the IBA [Independent Brewers Association] and [CEO] Kylie [Lethbridge] to succeed. We need to stick together."
You can read a media release on today's news below. The announcement comes a year to the day after Ballistic Beer Co entered voluntary administration; The Crafty Pint has put together a timeline documenting the turbulent 12 months that followed. You can read The Year Of Living Precariously here.
Media Release (24/1/24): Wayward Brewing Co. and Local Drinks Collective emerge from administration after a financial restructuring
Wayward Brewing Company Pty Ltd (Wayward) and Local Drinks Collective Pty Ltd (LDC), have successfully emerged from voluntary administration after creditors today approved a financial restructuring of the companies.
Peter Philip, as sole director of both companies, appointed DBA Reconstruction & Advisory as Administrator on 2 January 2024. This was a necessary step to deal with financial losses from a difficult period for the business.
Peter and his team have worked with the Administrator to develop a compelling Deed of Company Arrangement (DOCA) proposal to financially restructure the business, to ensure a stronger and more resilient operation moving forward. The Administrator recommended that creditors accept the DOCA proposal to provide the best outcome to creditors.
The DOCA was signed after the meeting of creditors today, so control of the business has reverted to Peter and the companies’ management.
Peter noted that under administration it’s been business as usual: “Beer production, sales and distribution and taproom operations have not missed a beat since we entered administration.”
Looking forward, Peter added: “We are grateful that our restructuring proposal has been approved by the creditors and we thank the administrator, our business partners and our employees for their support during the restructuring process, which has been the most stressful time of Wayward’s 10+ year history. It is a great result that nearly 40 jobs have been saved in the process.
“This has been a very challenging time, but we have been overwhelmed by the outpouring of support from our customers and business partners. Our team are more determined than ever to make the business a success by producing great independent craft beverages for our loyal customer base.
“I am looking forward to putting this difficult period behind us and I look forward to a great future for Wayward and LDC.”