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Creditors to embattled craft brewing group Mighty Craft have voted to accept a deed of company arrangement (DOCA) that will see the business taken over by Bangalow-based funds manager and senior lender Pure Asset Management.
Following the second meeting of creditors earlier week, creditors have agreed to accept the terms of the DOCA put forward by the Pure Asset Management which will see Mighty Craft swallowed by the funds manager – leaving shareholders of the listed company out of pocket.
“The DOCA for the company proposes a compromise of the liabilities of the company to its creditors,” says a joint statement by administrators Quentin Olde and Liam Healey, of restructuring specialist Ankura.
“The DOCA includes a condition precedent that requires all of the issued share capital in the company be transferred by the administrators (in their capacity as administrators of the DOCA) to the proponent for a nil consideration to the existing shareholders in accordance with section 444GA of the Corporations Act 2001.”
The administrators have provided no further information on the DOCA proposal.
Related story: Better Beer investor Mighty Craft appoints voluntary administrators
Business News Australia has sought comment from Pure Asset Management on its plans for the Mighty Craft business once it assumes control.
The directors of Mighty Craft appointed voluntary administrators to the company on 22 July 2024 after failing to secure a merger agreement with Better Beer – a fast-growing craft brewing company in which Mighty Craft has a 33 per cent stake.
Better Beer accounts for most of Mighty Craft’s revenue after a string of business divestments over the past year aimed at paying down debt.
The Melbourne-based Mighty Craft revealed in April that it was in breach of its loan covenants and that it was negotiating with Pure Asset Management to "pursue a path to material debt reduction" in the short to medium term.
A merger with Better Beer – which was founded by Nick Cogger, Jack Steele and Matt Ford – was seen as the best option for Mighty Craft’s survival when it was announced earlier this year. However, a deal failed to eventuate.
Prior to its collapse, Mighty Craft had a market capitalisation of $1.8 million with its shares last trading at 0.05c prior to their suspension from the ASX on 22 August 2024. The company listed on the ASX in 2019 for an initial public offering price of 50c per share.
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