‘Stupidity’: Fury at ASX company Halo Food Co’s collapse as investors accuse company of lies, poor decisions

Investors have been left fuming from the collapse of an ASX-listed company, with a zero per cent chance of recovering any of their missing money.

EXCLUSIVE

Investors have been left fuming from the collapse of an ASX-listed company, with some left hundreds of thousands of dollars out of pocket with no recourse in sight.

In late August, food, beverage and nutrition retailer Halo Food Co, trading as HLF on the Australian Stock Exchange, went into voluntary administration.

The next day, receivers were also appointed while trading ground to a permanent halt.

Now months after the company went bust owing $13 million, investors are staring at the prospect of a total loss thanks to the defunct venture.

Shareholders have not been included in the list of unsecured creditors which means if money is recovered, it will not be going to them.

Nick Gibbons, 52, invested $240,000 into Halo Food several years ago, when it was called Keytone Dairy Corporation Limited.

But he said he could see the writing on the wall and was able to de-vest half his portfolio before the firm went bust.

“$120,00 I just saw turn to zero,” the Perth resident lamented.

He says the company was poorly managed and that at times investors were kept in the dark in the months leading up to Halo’s collapse.

The Healthy Mummy brand was sold weeks before the administration appointment.

Halo boasted a range of big name food products, including health and nutrition brand The Healthy Mummy, beverage brand Tonik and milk manufacturer Key Dairy, among others.

But Halo appeared to be in trouble for some time, after back-to-back capital raises and buying brands and then selling them off at much less than the original purchase price.

In a stark example, Halo Foods bought The Healthy Mummy brand for an eye-watering $17 million in early 2022.

But in August, they sold it to another business called Mosh, for just $588,000.

Two weeks later, Halo went bust.

In the time Mr Gibbons has been a shareholder, Halo underwent multiple capital raising rounds, making him doubt its solvency.

“They used the ASX as a crowd fund me page,” he alleged.

“Within 12 months they did four capital raises. That’s just next level stupidity.

“Every time they did anything they would give more and more shares. They were diluting the value of everything while spending a crazy amount of money.”

By the time Halo collapsed, it had a market capitalisation of $2.8 million – money investors like Mr Gibbons will never recover.

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Halo Food Co collapsed in August.

Mr Gibbons said he was left with a bad taste in his mouth over another incident involving the sale of one of Halo Food Co’s properties.

Many investors have taken to an online forum called HotCopper to vent their frustrations.

In February, one eagle-eyed investor spotted an advertisement selling up the land Halo’s New Zealand factory was located on and shared it to the forum.

But when shareholders sent off a query to Halo, they denied this.

In the response to the official ASX query sent their way, the company said in February “HLF is not aware of information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities.”

Just three months later, Halo then made an announcement that it had sold off its New Zealand factory for $3.5 million, months after the ‘for sale’ sign first went up.

Mr Gibbons also claims that the company forecasted multiple millions of dollars in profit even as red flags continued to pile up.

“How can you claim this, then within months be delisted and broke?” he said.

Even in Halo’s final report, lodged just 24 days before it went under, the business stated “the company announced that the board has formed an opinion that the value of the underlying businesses (sic) units within Halo, may be worth substantially more than the implied values based on the current listed market value of the company”.

The Tonik brand has also been sold.

Mr Gibbons’ brother Mark also invested into Halo and has also now been left at a loss.

Mark poured $20,000 into the venture while his partner put in just under $10,000.

He now regrets doing so.

“At least two years ago I thought this doesn't look good,” he said.

The company directors were contacted for comment.

Documents submitted to the corporate regulator and obtained by news.com.au show that Halo went bust owing $13 million, but $11 million of that is to one creditor – Arrow Point Finance.

As a result of the hefty debt, Arrow Point appointed its own receivers, David Hardy, Ryan Eagle and Emily Seeckts of KPMG, to recoup some of its money.

In a statement, a KPMG spokesperson told news.com.au that they had sold the remaining assets of Halo Group, including its Tonik brand, Halo’s Powders, its bottling facility in Victoria and the Halo Bar Line.

The spokesperson would not disclose the sales amount.

Meanwhile, the Federal Court extended the deadline for the decision-making regarding the second meeting of creditors to 22 January.

The extension was sought by KordaMentha, the appointed administrators, to allow the receivers to sell the business.

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