Wednesday 22nd November 2017
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Renaissance Brewing has attracted 10 parties interested enough to undertake due diligence on buying the craft beer maker with bids due at the end of the week.
The Blenheim-based boutique brewer was put up for sale by voluntary administrators Iain Shephard and Jessica Kellow of Shephard Dunphy, who were appointed last month when Renaissance was caught short by cash flow difficulties while operating too many product lines. That attracted 37 expressions of interest in either investing in or buying the business, and 10 parties taking a deeper look at the business.
"Ten parties are going through a due diligence process and we have requested offers by this Friday. We will know much more after this," Shephard told BusinessDesk in an email. "It is business as usual and we remain supremely confident of a sale or investment into the business so that it may continue as a going concern."
Renaissance was the first company to raise money under the country's three-year-old equity crowdfunding regime in August 2014, securing its $700,000 target in just a week and a half, a quarter of the time the offer was open. Since then, craft beer makers have enjoyed a boom, growing at a faster pace than regular beer brewers and prompting big liquor companies to buy some of their boutique rivals.
The administrators successfully sought an extension to holding a watershed meeting of Renaissance's 88 creditors, where substantial decisions are made by creditors, saying they wouldn't be able to make a recommendation with sale negotiations at such an early stage.
Associate Judge Warwick Smith granted the extension, saying it "will provide the best chance of an increased return for the creditors". He also took into account that Renaissance is in its peak annual selling period. In the Nov. 9 ruling refers to an affidavit from Shephard saying Renaissance can cover its weekly and monthly costs while ether was an effective moratorium on historical creditor payments and that ANZ Bank New Zealand had extended its facility to cover any shortfall in trading during the administration.
The beer maker operated at a loss in 2016 and 2017, but narrowed that loss in the 12 months ended Aug. 31, 2017, and the administrators estimated the value of Renaissance's assets to be about $1.02 million, the ruling said. ANZ and NZ Hops were the company's only secured creditors, owed $895,000 and $5,000 respectively, while preferential creditors were owed $88,000 and unsecured creditors $317,000. It had seven staff working across two leased brewery sites.
"The administrators also consider that continuing to trade will give RBL the best possible chance of a successful sale, thus maximising the return to creditors," the judgment said. "To that end, it will be important to keep creditor and customer relationships intact, and keep staff employed."
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