Following months of speculation surrounding Mighty Craft’s debt, divestment and restructuring efforts, the brakes have been put on the craft industry accelerator as it enters voluntary administration.
Over the past year Mighty Craft has sold its Mismatch and 78 Degrees brands, appointed a new Managing Director, who has subsequently stood down, and also appointed a new Non-Executive Chair. In addition the company has reported revenue declines, unsustainable levels of debt and a focus on merging with Better Beer.
Today, in a statement to the ASX Mighty Craft said the proposed merger with Better Beer was fundamental to its ongoing divestment and restructuring program. Mighty Craft’s senior lenders and the shareholders of Better Beer had been working on an agreement, with a capital raise to support the process also considered.
However, Mighty Craft said in its statement today that, “it now appears unlikely that an agreement will be reached between MCL’s senior lenders, Better Beer and Mighty Craft that is acceptable to all parties.”
The statement added: “The Directors therefore formed the opinion that [Mighty Craft] should be placed into voluntary administration to evaluate options for the Company to continue as a going concern, or if this is not possible, that an administration will result in a better return for the creditors and members of the Company than would otherwise result from an immediate winding up of the Company.”
The Liam Healey and Quentin Olde of specialist restructuring firm Ankura were appointed as Joint and Several Administrators of the Company, and the Administrators have assumed control of the Company’s business and assets and will be undertaking an urgent assessment of the Company.
Mighty Craft said the administrators will now work closely with Management and the Board during the administration period to determine the appropriate way forward to maximise the outcome for all stakeholders of the Company. In the meantime, the Administrators have confirmed that the operations of the Company and its subsidiaries will continue on a business-as-usual basis.
Mighty Craft also reported to the ASX this morning that one of its Directors and Board members, Sean Ebert has resigned from his position.
The Shout has contacted the administrators for further comment.
