ASX company worth $1.8m collapses

Another casualty of this once popular sector has seen the company go under despite being worth millions just years ago.

An Australian brewer and spirits manufacturer, which was once worth $1.8 million, has collapsed after it scrambled to pull itself out of financial difficulty.

Mighty Craft was listed on the ASX just five years ago but in the past year it was been selling assets, seeking a merger and slashed its board and management. It has also seen its interest rates on a $20.9 million loan jump from 8.5 per cent to 11.5 per cent.

But the moves to save it weren’t enough with the brewer announcing on the ASX that it had fallen into administration with insolvency firm Ankura appointed.

Mighty Craft (MCL) owns 33 per cent of fast-growing Better Beer, which boasts high-profile comedians Jack Steele and Matt Ford from The Inspired Unemployed as shareholders.

Despite a slump in the craft beer market, Better Beer has been performing strongly with sales increasing by 32 per cent to $26.1 million in the six months to 31 December, accounts show.

The Inspired Unemployed hold a 46 per cent stake in Better Beers. Picture: Facebook

There had been a proposed merger between Mighty Craft and Better Beer but this appears to have now fallen over.

“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 and MCL, an arrangement that required the support of MCL’s senior

lenders and the shareholders of Better Beer,” the company announced on a statement to the ASX.

“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.”

Mighty Craft was first listed on the ASX in 2019 and its shares traded at 42 cents in late 2020.

But the share price plummeted as they last traded at 0.5c valuing the company at $1.8 million.

Better Beer has been performing strongly with sales increasing by 32 per cent to $26.1 million in the six months to 31 December, accounts show. Picture: Facebook

In June last year, the company revealed it’s business model required “urgent review”.

“The cost base is disproportionate to the earnings profile, debt levels are excessive and further simplification of the business model are necessary,” the chair at the time Chris Malcolm said.

It came after it splashed the cash in recent years including forking out $47 million in cash and shares for the Adelaide Hills Group, which consisted of the likes of Mismatch Brewing, Hills Cider and the Lot100 venue in the Adelaide Hills.

However, it has now sold off all of the investments with Lot100 the last to go as it is currently being offloaded for $1.5 million to a consortium of publicans.

Mismatch and spirits company 78 Degrees were sold last year to a group that included former Carlton & United Breweries boss Peter Filipovic for just $7.2 million.

Mighty Craft was listed on the ASX just five years ago but has now collapsed after it failed to pull itself out of financial difficuly. Picture: Facebook

An urgent assessment of Mighty Craft’s operations is now being undertaken by administrators.

“In the meantime, the administrators have confirmed that the operations of the company and its subsidiaries will continue on a business-as-usual basis,’’ Ankura said.

“The administrators will provide updates of any material events throughout the administration by way of announcements to the ASX.”

It has been a torrid time for the craft brewing industry with a number of companies collapsing or announcing closures.

Nick Boots, an industry consultant from The Business of Beer Consulting and Advisory and previously the general manager of popular Byron Bay brewery Stone & Wood, warned earlier this year that the recent collapse of Melbourne-based Deeds Brewery wouldn’t be the last to rock the sector.

His warnings continue to reverberate around the industry.

Mighty Craft was listed on the ASX just five years ago but has now collapsed after it failed to pull itself out of financial difficuly. Picture: Facebook

Just last month it was revealed popular Sydney outfit Malt Shovel Brewery will be shuttered at the end of August, impacting nine staff members.

Last week Lotus Beer Co, which runs Valhalla Brewing in Geelong, while in June Melbourne-based Alchemy Brewing Co posted on social media to say they’d “had a rough ride” and that “it’s time to call it quits” with its doors permanently shutting.

Award-winning Queensland brewer Black Hops was also placed into voluntary adminstration.

A number of other independent breweries have gone into administration in the past year including Brisbane-based Ballistic Beer Company, Adelaide business Big Shed Brewing, Melbourne-based Hawkers Brewery and the Wayward brand and Akasha Brewery, both from Sydney.

Originally published as ASX company worth $1.8m collapses