AUSTRALIA – Australia’s Mighty Craft has announced it has entered into a Share Sale Agreement to sell Lot 100 Pty Ltd to a third-party buyer-led by a consortium of experienced publicans in the Australian hospitality industry.
According to a statement to the Australian Securities Exchange, the shares in Lot 100 will be sold to the buyer for a cash consideration of no less than US$1.5 million.
The sale includes all of Lot 100’s business and assets, such as the leasehold for the Lot 100 cellar door venue in South Australia, branding, intellectual property, trading names, contracting arrangements, inventory, plant and equipment, and licenses.
The Lot 100 venue houses notable brands such as Hills Cider Co., Mismatch Brewing Co., Vinteloper, Adelaide Hills Distillery, Ashton Valley Fresh, and a restaurant.
The proceeds from the sale will be directed to the drinks group’s senior lenders and will fund the ongoing operations of the business, as stated by Mighty Craft.
This divestment comes shortly after Managing Director Katie McNamara revealed her decision to step down from the group at the end of her fixed-term contract.
Concurrently, the company announced that Grant Peck, the group’s chairman, will replace McNamara.
The leadership change occurs amidst Mighty Craft’s financial difficulties. The company has been grappling with debt issues and recently secured an agreement with senior lender Pure Asset Management to reduce its liabilities.
As part of this agreement, Mighty Craft sold 7.5 percent of its business to Pure Asset Management.
McNamara commented on the financial restructuring: “The royalty swap represents further meaningful debt reduction, which is a key focus of the MCL board.
This, combined with the A$2.3 million (US$1.57M) debt reduction announced in Q3 FY24 and the proposed flow of funds from the settlement of the 78 Degrees and Mismatch sale, will represent over A$10 million (US$16.77M) of debt reduction across H2 FY24.”
During its third quarter, the company reported a revenue of A$19.8 million (US$13.18M), marking a 22 percent decline year-on-year, and a net operating cash flow loss of A$2.4 million (US$1.6M).
In response to these challenges, Mighty Craft initiated a strategic review in May last year, which included the sale of smaller brands such as Jetty Road and Foghorn Breweries, raising A$10 million (US$16.77M).
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