Hospitality chain collapses owing more than $20m, 200 jobs on the brink

A fine dining restaurant chain has collapsed with debts of around $23 million, leaving 200 jobs teetering on the brink.

A fine dining restaurant chain has collapsed with debts of about $23 million, leaving 200 jobs teetering on the brink.

Last month, hospitality business Good Group Australia, which operated a high-end string of steak restaurants and several other Asian venues across three Australian states, called in administrators.

Its Botswana Butchery chain sold steak for as much as $500 a piece and had restaurants in Sydney, Melbourne and Canberra. There are 200 staff employed across these three restaurants, which continue to trade, as well as head office staff.

But three other businesses also under the group’s banner, White and Wong’s, based in Martin Place in Sydney and Chadstone in Melbourne, and Wong Baby in Melbourne’s Chapel St, have all ceased trading.

In a report to creditors sent out this week and obtained by news.com.au, the appointed administrators, Andrew Sallway and Duncan Clubb of insolvency firm BDO Australia, revealed that Good Group Australia has a hefty debt hanging over its head.

Across the seven businesses, $9.7 million is owed to a bank in a secured debt.

A further $4.5 million is owed to other creditors, including landlords, suppliers and employees, while an additional $9.3 million is owed in inter-company loans.

Hospitality business Good Group Australia is in administration. Picture: @botswanabutcherysydney/Instagram

200 staff are employed through the group. Picture: @botswanabutcherysydney/Instagram

Of Good Group Australia’s large debt, the Commonwealth Bank is owed $9.7 million, but through secured facilities meaning it will likely get it all back.

A further $1.81 million is owed to landlords by way of unpaid rent.

In fact, the landlord of the company’s head office in Melbourne evicted the group over failure to pay up before the chain went bust.

The landlord is expected to recover some of the money through security bonds.

Staff cumulatively are among the largest creditors, as they are owed $523,804 from unpaid annual leave and long service leave entitlements. Workers are also owed a further $92,000 from superannuation that was never paid.

Other companies linked to the hospitality group lent $9.3 million in related party loans.

Good Group Australia also appears to owe a lot of money to the tax man — about $3.6 million.

However, administrators have not included that debt in the total amount because the tax department has not yet lodged any proof of debt claims.

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More than $20 million is owed, from the debt to the bank, other creditors, and inter-company loans. Tax debts have not been included in that figure. Picture: @botswanabutcherysydney/Instagram

The same report also noted that the company’s directors had failed to respond to the administrators’ requests for more information. As a result, they said they planned to make a report to the financial regulator, ASIC.

The Botswana Butchery chain originated from Queenstown, on New Zealand’s South Island, and all its directors are based in New Zealand.

The administrators say the group appeared to have been insolvent since last September.

It comes as the Canberra arm of Botswana Butchery only launched two months prior to administrators being called in, in January this year.

The report also said the White and Wongs and the Wong Baby Chapel arms of the business had been trading at a loss since their inception and money from the New Zealand group had been propping it up a lot.

“The venues have been unprofitable since their opening,” the administrators noted.

“The group owes $9.3 million in inter-company loans to New Zealand entities. The group has been reliant on the New Zealand entities to fund daily operations and trading losses.”

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Botswana Butchery and the Wong chain have both gone bust.

And the prospects for the butchery chain do not look bright.

While the Botswana Butchery restaurants continue to trade, the administrators have noted they have racked up operating losses of $207,000 and have recommended the group be placed into liquidation.

Administrators have determined that the hospitality group’s launch in Australia came at the worst possible time as it “coincided” with the Covid-19 pandemic.

The subsequent cost of living crisis was also another nail added to the coffin. Every month, its operating costs rose by 10 per cent, the administrators found.

The company had also been through a round of redundancies to try to turn its fortunes around.

When the administrators took over the restaurants, there was hundreds of thousands of dollars worth of food and alcohol at the venues.

The Canberra Botswana Butchery had $19,327 worth of food and $67,236 worth of drinks.

At its Sydney and Melbourne restaurant, the value was even higher. The Melbourne steakhouse had $58,906 worth of food and $168,493 of drinks.

Meanwhile, the Sydney one had food estimated at around $28,701 during a stock take, while its booze products totalled $119,181.

However, administrators noted “The majority of the food stock was perishable and therefore would be of very limited value in a liquidation scenario”.

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Originally published as Hospitality chain collapses owing more than $20m, 200 jobs on the brink