Nant distillery deal breaks down after due diligence reveals hundreds of barrels are missing

NEGOTIATIONS between Australian Whisky Holdings and former Nant owner Keith Batt have broken down with claims large discrepancies were uncovered during the due diligence process.

Due diligence on the stock at the Nant distillery has revealed more than 700 barrels sold to investors don’t exist. Picture: MATHEW FARRELL

NEGOTIATIONS between Australian Whisky Holdings and former Nant owner Keith Batt have broken down with claims large discrepancies were uncovered during the due diligence process.

AWH signed an agreement with the Nant Group to buy the Nant Distillery business and historic Nant Estate property for $3 million in October.

The company said it would take on $5.5 million worth of Nant debts and liabilities — after due diligence.

But it said a comprehensive audit by AWH of hundreds of whisky barrels at the centre of Mr Batt’s investor scheme found that hundreds of purchased barrels did not exist and a large number had been decanted and bottled with the proceeds sold — but barrel investors had not been paid.

In a letter sent to hundreds of investors, AWH chief executive Chris Malcolm said some barrels were filled with new-make whisky so that they were full but the whisky has not aged in line with the barrel investors’ purchase dates. There were also some barrels that were not refilled after they were decanted.

More than 700 barrels that were sold to barrel investors did not exist, Mr Malcolm said.

“We undertook the most extensive audit of whisky stock that has ever been done in the history of whisky distilling in Australia,” he told investors.

Whisky taster Mark Nicholson helped audit every barrel at the Nant Distillery, near Bothwell, as part of the due diligence process in preparation for Australian Whisky Holdings Limited taking possession. Picture: MATHEW FARRELL

Mr Malcolm said he had to tell one of the barrel owners that the barrels he thought he had bought had never been filled and did not exist.

“You can imagine how difficult this phone call was for both of us. There are many more of these conversations unfortunately yet to come.”

A large number of barrels had the owners’ names and barrel numbers sanded off and a number have been leaking and not repaired, he said.

After more than five months of “complex and difficult negotiations and discussions” with Mr and Mrs Batt, AWH terminated the Nant agreement 10 days ago, he said.

Keith and Margaret Batt and the former Nant group of companies have since changed their names to NAW. Mr Batt was contacted for comment.

Mr Malcolm said Mr Batt had failed to reach an agreement with secured creditors in regard to the business assets of the Nant distillery business.

On February 17, AWH became the registered proprietor of Nant Estate. AWH owns the homestead, 13 bond stores, distillery, equipment and intellectual property.