Friday 16th February 2018
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Renaissance Brewing's creditors face a $611,000 shortfall after the craft beer maker was sold for $620,000 following a slump in sales and an "ill-fated" distribution agreement that pushed it into administration.
The Nelson-based brewer's creditors were owed about $1.2 million, of which lender ANZ Bank New Zealand was owed $812,000 as a secured creditor, the first liquidator's report by Jessica Kellow of Shephard Dunphy shows. The boutique beer brewer was sold by voluntary administrators last month to Sahara New Zealand, trading as Brandhouse, after it faced cash flow problems while operating too many product lines.
The administrators kept the brewery operating since their appointment in October last year in the hopes of finding a buyer, which the liquidator's report shows generated wage, tax and creditor costs of about $59,000, and was advanced another $150,000 by ANZ through the period.
"The company was suffering from cash flow difficulties as a consequence of significantly reduced sales revenue," Kellow said in her report. "Approximately 12 months prior the company had entered into a new distribution agreement which, in hindsight, was ill-fated."
Renaissance was the first company to raise money under the country's equity crowdfunding regime, securing its $700,000 target in just a week and a half. Since then, craft beer has grown at a faster pace than regular beer brewers, prompting the big liquor companies to buy some of their boutique rivals.
The sale to Brandhouse settles on Feb. 19, and included fixed assets, inventory and intangible assets, and combined with $23,000 of cash on hand and $140,000 of accounts receivable, raised estimated funds for repaying creditors of about $783,000.
Preferential creditors include employee entitlements of $30,000 for seven staff, $17,000 in excise tax and another $12,000 to the Inland Revenue Department, with unsecured creditors made up of a further $2,000 to IRD, $182,000 to trade creditors, and $129,000 in the shareholder beer allocation, which was part of the equity crowdfunding offer pitching a selection of special brews to investors who bought 1,000 shares. Some 52 of those shareholders didn't consent to waive the beer allocation.
Kellow also said $12,000 in the current account won't be recovered on the basis that it would to the secured creditor.
Brandhouse supplies liquor and wine to the hospitality industry and has exclusive distribution of Croizet Cognac. The company is owned by members of the Dellaca family, which founded clothing retailer Postie Plus.
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