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Administrators appointed last month to Gold Coast craft beer company Black Hops Brewing, a company once estimated to be worth $65 million following a record-breaking crowdfunding campaign, have revealed they are working with potential buyers looking to secure a sale of the embattled business.
However, creditors will have to wait until the first week of May to learn how much of the debts they are will be clawed back by any rescue proposal that may be put forward.
The first meeting of creditors to Black Hops was held in Brisbane this morning in a largely procedural affair conducted by voluntary administrators David Mansfield and Tim Meehan, from Deloitte Turnaround & Restructuring.
Creditors were told that a sale campaign for the business is under way and that the administrators are working with a number of interested parties towards securing non-binding indicative offers.
Black Hops Brewing, which has its main production brewery at Biggera Waters on the Gold Coast and has three taphouses to its name in three locations including Burleigh Heads and East Brisbane, was placed into voluntary administration on 28 March.
The company employed about 70 people ahead of being placed into administration, but administrators made the early decision to close the East Brisbane taphouse for now, while keeping the company’s Gold Coast venues operating.
The administrators are expected to issue creditors with a report in the first week of May, detailing the findings of their investigations into the company’s affairs and any potential restructure put forward for the business, including a potential sale.
The creditors will vote on the proposals at their second meeting in the second week of May.
Black Hops was founded in 2014 by Michael McGovern, Eddie Oldfield and Dan Norris, making a splash with investors in 2022 when it set a record for crowdfunding after raising $2.2 million from almost 1,000 investors in 24 hours.
The company at the time was said to be worth $65 million and producing annual revenue of about $15 million.
A 2021 blog posted by Norris on the Black Hops website noted that the business was worth $18 million in 2015 following its first crowdfunding campaign. Annual revenue then was just $1.4 million, although the “extreme multiple” had taken into account the company’s exponential rate of growth.
Norris left Black Hops in February last year, replaced as CEO by former Yarra Valley Dairy boss Nathan Hyde.
Capital from the record-breaking 2022 crowdfunding campaign was used to boost the company’s production capacity amid solid demand for its products which largely comprises packaged craft beer sold through major channels such as Dan Murphy’s, BWS and Liquorland.
However, like many in the once booming craft beer industry, rising costs and alcohol taxes have put pressure on profitability.
The pressure was compounded by an aggressive collections approach by the Australian Taxation Office to recover tax debts, a key factor in many recent voluntary administrations reported by Australian businesses, including the likes of Gold Coast-based Artesian Hospitality Corp. Black Hops told investors last month that it had been left with no other choice but to seek a restructure.
The administration comes amid a round of industry accolades for Black Hops, with its G.O.A.T beer voted Australia’s favourite Hazy IPA for the fourth year running and the nation’s 12th most popular beer in the GABS Hottest 100 Craft Beer Countdown.
Despite the run of administrations across the industry, many have been resurrected through the restructuring process, among them Sydney craft beer company Wayward Brewing Co and its distribution business Local Drinks Collective earlier this year.
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