Mighty Craft has entered voluntary administration so that a decision can be made about whether or not the business should continue as a going concern.
In an announcement to the ASX today, the business said they had appointed Liam Healey and Quentin Olde from specialist restructuring firm Ankura as joint administrators.
The announcement follows a period in which Mighty Craft has sold off their shares in a number of craft breweries and distilleries the "craft beverage accelerator" had invested in over the years. The shedding of brands left the business with little more than approximately one-third of Better Beer – a beer brand the ASX-listed operation founded in 2021 alongside Nick Cogger and the comedy group, The Inspired Unemployed.
In late April, Mighty Craft announced they were in early talks to buy the shares in Better Beer they didn't already own, adding that, if they were unable to, it would likely be difficult for the business to continue operating. In today's announcement, Mighty Craft stated the merger required the support of the business' senior lenders, stating: "It now appears unlikely that an agreement will be reached between MCL’s senior lenders, Better Beer and Mighty Craft that is acceptable to all parties.
"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."
At one point, the ASX-listed business owned or held stakes in Mismatch Brewing, Jetty Road, Slipstream, FogHorn, Sauce Brewing and Ballistic Beer Co and Sparkke Beverages.
Mighty Craft has since sold Mismatch and Jetty Road to a newly-formed publican group helmed by former CUB boss, Peter Filipovic, while Slipstream, FogHorn and Sauce's original founders have all bought back their stakes in their breweries.
Ballistic Beer has been under a new ownership structure since the Brisbane brewery emerged from voluntary administration in March last year, while Sparkke appears to have ceased operating as a brand some time ago and no longer has a working website.
Mighty Craft shares have been halted from trading on the ASX due to the announcement and were paused earlier in the day pending the news. At the time trading was paused, those shares were trading for just 0.005 cents.
he securities of Mighty Craft Limited (‘MCL’) will be suspended from quotation immediately under Listing Rule 17.3, having regard to the announcement today of the appointment of voluntary administrators of MCL and its subsidiaries. The securities will remain suspended until such time that ASX is satisfied with MCL’s compliance with the Listing Rules and that it is otherwise appropriate for MCL’s securities to be reinstated to quot
The full ASX announcement is below. We'll update this article if further information becomes available.
ASX Announcement: Appointment of Voluntary Administrators
Mighty Craft Limited (ASX:MCL) (“Mighty Craft”, “MCL” or the “Company”) wishes to advise that, at 10.15am on 22 July 2024, Liam Healey and Quentin Olde of specialist restructuring firm Ankura were appointed as Joint and Several Administrators of the Company pursuant to section 436A of the Corporations Act 2001 (“Administrators”) of the Company and its wholly owned subsidiaries. Table 1 contains a full list of entities impacted.
Background
The Company has been undergoing a divestment and restructuring program to reduce the Company’s debt. Fundamental to this program was a proposed merger between Better Beer Holdings Pty Ltd (“Better Beer”) and MCL, an arrangement that required the support of MCL’s senior lenders and the shareholders of Better Beer. A capital raise to support this process was also contemplated.
It now appears unlikely that an agreement will be reached between MCL’s senior lenders, Better Beer and Mighty Craft that is acceptable to all parties. 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.
Current status of the Company
The Administrators have assumed control of the Company’s business and assets and will be undertaking an urgent assessment of the Company, working closely with Management and the Board during the administration period to determine the appropriate way forward to maximise the outcome for all stakeholders of the Company. In the meantime, the Administrators have confirmed that the operations of the Company and its subsidiaries will continue on a business-as-usual basis.
Updates on the progress of the Administration
A first statutory meeting of creditors must be held within eight business days of the appointment of the Administrators. The purpose of the first meeting is administrative in nature and meeting notices setting out the time and location for the first meeting of creditors will be distributed to the Company's creditors over the coming days.
The Administrators will provide updates of any material events throughout the administration by way of announcements to the ASX.
We examined the spate of voluntary administrations in the local beer industry in a two-part mini-series, and explored the shifting landscape across Australia in this article on the start of the new financial year.
Will Ziebell is a history graduate who knows more about The Wire than he does about beer. He was awarded the AIBA Best Media trophy for 2018; HBO have told him to please send his fan mail elsewhere. He can be found on Instagram, Twitter and TikTok.
The beer(s) or moment(s) that turned you on to good beer:
Spending time living in the UK (and backpacking across Europe) when I was 21 certainly gave me a better understanding of the beer and different styles of the world. But I'd say it was a holiday to the High Country a little while later when lunch and a tasting paddle at Bridge Road Brewers created an obsession with Australian breweries and locally made beer.
You've got three beers to turn someone else on to good beer; what are they and why?
-
Boatrocker's Miss Pinky: It's a raspberry-packed Berliner Weisse that neither looks or tastes the way many people conceive of beer.
-
Bad Shepherd Hazelnut Brown: A luscious mix of chocolate and hazelnut that can appeal to the sweet tooth within us all.
-
Stone & Wood Pacific Ale: As the father of my oldest friend once said to me: "It's the perfect refreshing pint that smells like they've loaded it with the God's herb."
The last beer you enjoyed:
Garage Project's DFA while sitting at the bar at Miss Moses as the sounds of The Rolling Stone drifting in the background.
Three things that represent you:
- Bruce Springsteen
- Ken Burns
- The State Library of Victoria
