Australian company Mighty Craft, which used to be worth almost $2 million, collapsed after it was unable to meet its financial obligations.
The company had been struggling with its finances for some time, and it had been selling off assets to raise funds.
In addition, its interest rates on its loans had increased from 8.5 percent to 11.5 percent. Unfortunately, the company failed to find a solution to its financial problems, and it went into administration with Ankura appointed as its administrator.
It had 33 percent of the fast-growing company Better Beer, which features prominent comedians such as Matt Ford and Jack Steele.
In spite of the decline in the craft beer sector, Better Beer was able to grow its sales by 32 percent during the six-month period ended December 31.
It had also been rumored that it would merge with Mighty Craft, but this idea has since died. The company had been carrying out a restructuring and divestment program to reduce its debt.
The company noted that one of the main components of its restructuring program was the proposed merger between its subsidiary, Better Beer Holdings Pty Ltd, and MCL.
This arrangement would require the support of the latter’s creditors. In addition, a capital raise was also considered.
It now appears that the proposed merger between the two companies will not be able to be achieved due to the lack of support from its senior lenders. In late 2020, the shares of Mighty Craft had traded at 42 cents. However, the stock price of the company then dropped to around 0.5 cents.
Last year, the company announced that it was carrying out an urgent review of its business model. According to Chris Malcolm, the chair of the company, the cost base was disproportionate to its earnings profile, and its debt levels were excessive.
This was after it had spent a huge amount of money in recent years, including acquiring the assets of the Adelaide Hills Group. The group, which included the likes of Hills Cider and Mismatch Brewing, was made up of various businesses in the Adelaide Hills, such as the Lot100 venue.
The company had already sold off most of its assets, and it is currently in the process of unloading its remaining investments to a group of publicans for around $1.5 million. 78 Degrees, which was a spirits and Mismatch company, was also purchased by a group led by Peter Filipovic for $7.2 million last year.
Ankura said that the administrators of Mighty Craft had commenced an assessment of the company’s operations. They noted that the company’s subsidiaries and operations would continue as usual. They will also provide regular updates on the situation through announcements to the Australian Securities Exchange.