Pure Asset Management the winner from Mighty Craft collapse

Mighty Craft conducted a fire sale of all of its other assets over the past year. Picture: David Geraghty

Mighty Craft has turned out to be a mighty garbage fire for shareholders who were recently wiped out by the beer and spirits company’s failure, and creditors didn’t fare much better despite the tax office trying to hold out for a better deal.

The only real winner in the process has been Pure Asset Management, which has picked up Mighty Craft’s 25.5 per cent stake in Better Beer, adding to 7.5 per cent it acquired in a debt for equity swap in June.

That didn’t come for free of course, with Mighty Craft indebted to Pure to the tune of $23.1m.

Better Beer, which is also part owned by comedians Jack Steele and Matt Ford from The Inspired Unemployed, was reportedly valued at about $80m under the Pure equity swap, which if still current would value its now 33 per cent stake at $26.2m.

Not a bad outcome for a stake in one of the few bright lights in the beer sector, with Pure also picking up Kangaroo Island Spirits out of the Mighty Craft collapse.

For other creditors, however, it’s been pretty much a wipe-out.

When you’re on the wrong side of a deed of company arrangement it might be considered splitting hairs as to whether you’re getting a pittance or slightly more than a pittance, but the Australian Taxation Office at least tried to eke out an improved outcome for creditors, but to no avail.

Administrators Ankura took a DOCA to creditors late last month under which they’d receive the princely sum of 0.5c-0.9c on the dollar for what they were owed, under a deal struck with Pure.

The ATO’s representative pushed back against this proposal, putting up a resolution to have the meeting adjourned while a better outcome for creditors could be devised, but ended up being the sole creditor in support of that idea.

Minutes from the meeting say that the ATO’s representative “acknowledged that a DOCA would enable a better return to creditors in some circumstances, however, in these circumstances where the amount offered to unsecured creditors appears to be more of a token amount equating to less than 1c per dollar (it) is not something that the ATO can support’’.

“On that basis, (the representative) indicated the ATO’s preference to table the adjournment resolution put forward.’’

Mighty Craft conducted a fire sale of all of its other assets over the past year or so.