Better Beer investor Mighty Craft appoints voluntary administrators

Another one bites the dust for Australia's heavily tax-burdened and struggling beer and spirits industries, with Mighty Craft (ASX: MCL) announcing it has called in voluntary administrators this morning.

Mighty Craft owns 33 per cent of the fast-growing brand Better Beer - an investment that accounts for the majority of its revenue, especially as it has sold off numerous brands and assets in an attempt to shore up capital to pay down debt.

These asset sales include the recent $1.5 million sale of Lot 100 in the Adelaide Hills to former CUB boss Peter Filipovic.

Better Beer's CEO and co-founder Nick Cogger says the administration is just "business as usual" for his company. 

After pausing its shares from trading this morning, Mighty Craft announced that at 10.15am it had appointed Liam Healey and Quentin Olde of specialist restructuring firm Ankura as joint and several administrators.

Mighty Craft notes that it has been undergoing a divestment and restructuring program to reduce debt, and had proposed a merger with Better Beer that required the support of senior lenders and Better Beer's shareholders, including its co-founders - Cogger and Inspired Unemployed comedians Matt Ford and Jack Steele.

"A capital raise to support this process was also contemplated," Mighty Craft said in this morning's release.

"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 directors therefore formed the opinion that the company 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."

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In a statement given to Business News Australia, Better Beer's CEO Nick Cogger says that while Mighty Craft is a distributor and minority shareholder, he expects to continue trading as normal.

"At some point in the future someone or a company will put forward a DOCA (deed of company arrangement) and we will likely have a new shareholder on our register," says Cogger.

"We are looking forward to officially separating from Mighty craft in the coming months."

Mighty Craft notes administrators have assumed control of the business and its assets, and will be undertaking an urgent assessment by working closely with management and the board "to determine the appropriate way forward to maximise the outcome for all stakeholders".

"In the meantime, the administrators have confirmed that the operations of the company and its subsidiaries will continue on a business-as-usual basis," the company stated.

Shortly before the pause in trading this morning, the company also announced that Sean Ebert had resigned from the board, effective 20 July.

Late last month it was also announced that the company's managing director Katie McNamara, would be stepping down on 12 July. Chairman Grant Peck stepped up to an executive chairman role at the start of July.