Valhalla creditors to meet as earlier crowd-funding efforts emerge

Creditors of a well-known Geelong craft brewer are set to meet as it emerges the company put the call out for cash in recent months.

Valhalla director Scott Hunt at the company’s Federal Mills brewhouse. Picture: Brad Fleet.

An embattled Geelong craft brewer launched a crowd-funding effort just months before it fell into administration with debts well in excess of $1m.

Valhalla Brewing put the call out for cash in a “crowdsourced funding offer document” that it issued on April 17 this year.

Less than three months later, Valhalla, which was registered as Lotus Beer Co, collapsed because of what director Scott Hunt said was a massive downturn in trade in the past 12 months.

Mr Hunt declined to comment when asked about the crowd-funding, which sought to raise a minimum of $100,000 at $1 a share.

The offer closed May 8 and it is unclear exactly how much money was raised.

The document carried multiple warnings and highlighted the company’s precarious financial position.

“You may lose your entire investment, and you should be in a position to bear this risk

without undue hardship,” it said.

“Even if the company is successful, the value of your investment and any return on the

investment could be reduced if the company issues more shares.

“Your investment is unlikely to be liquid.

“This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you.”

Valhalla conducted an earlier crowd-funding round that raised $411,504, according to Australian Securities and Investments Commission documents.

Valhalla, which launched in 2016, operated two Geelong sites.

Its CBD outlet in Union St closed in the weeks leading up to its administration, while a modern taproom at Federal Mills in North Geelong opened in October last year.

The Union St venue has since reopened under the administration, while the Federal Mills site is still trading.

Scott Andersen and Matthew Kucianski of Worrells were appointed administrators last week.

The pair said an urgent assessment of the business would be conducted to determine whether it was feasible to continue trading.

Scott Hunt in the new Valhalla Brewhouse at Federal Mills in North Geelong. Picture: Brad Fleet

An initial meeting of creditors is scheduled for Wednesday afternoon.

Mr Hunt said he had received support from customers and investors “who understand the environment we are operating in at the moment”.

“We always believed that we had a great business model and the financial environment is difficult,” he said.

“We believed we could find a way through this and unfortunately in the last three to four weeks it became really apparent that forces outside of our control have had a hand in this.

“I can’t say exactly who or what, but our hand has been forced.”

Valhalla owes money to employees, suppliers, government bodies, landlords, banks and the tax office, a report into the company’s activities states.

Scott Hunt in the Valhalla Brewhouse at Federal Mills in North Geelong. Picture: Brad Fleet

Documents also show it has debts of $1.33m, and assets worth $1.3m.

“We opened a brewery which we invested a lot of money into, it was a big project for us, and we opened in the middle of what is essentially a recession and people are just not spending money,” Mr Hunt said.

“They’re not going out like they were and we have seen a 50 per cent reduction in our income for our Union St Tap Brew as opposed to last year, and we are trading 50 per cent of what we budgeted for when we planned on opening that brewery.”

Mr Hunt said the hospitality industry as a whole was struggling.

“I think it’s been decimated largely by the legacy of the extended (Covid) lockdowns we’ve had and sending people out of the office and to work from home and not having them return again,” he said.

A detailed report from Worrells is expected to be made public next month.

Originally published as Valhalla creditors to meet as earlier crowd-funding efforts emerge