Beston Global Food struggles as milk prices rise

Beston, which makes cheese and butter, has also been trying to sell its Provincial Food Group brand, which sells meat, but has not been able to find a buyer.

The future of Beston Global Food appears to be hanging in the balance after NAB tried to sell $55m worth of debt owed by the company to credit funds but failed to reach a deal.

Beston, which makes cheese and butter, has also been trying to sell its Provincial Food Group brand, which sells meat, but has not been able to find a buyer.

Ankura Capital Advisory has been working with Beston to find a restructuring solution.

The Australian reported earlier this month that the company’s debt has blown out to almost $70m, including the $55m NAB loan.

At a time of the highest milk flows on record, Beston has to pay its contracted farmers for the milk they supply.

Farmgate milk prices are the highest on record, rising 35 per cent in two years. This has coincided with a 25 to 30 per cent fall in the prices received for dairy products in global markets. Beston says this has put strain on its cash resources.

Beston conducted a $28.2m capital raising in late 2022, with $16m of that going towards paying down debts and the rest towards projects designed to turn the company’s fortunes around.

The debt has continued to blow out, however, with it now owing $69.1m to its financiers.

This is up from about $45m at the end of last financial year, not including trade and other payables of $20.6m at the time.

The company had just $143,000 in cash at the end of the March quarter and undrawn debt facilities of $1.02m. It delivered a pre-tax loss from continuing operations of $11.6m.

Beston, chaired by Roger Sexton, listed in mid-2015, valued at about $127m but has never turned a profit. Its share price is now less than 1c.