Accountants overseeing the collapse of BrewDog have confirmed that creditors owed approximately £190m are unlikely to see their investments returned. Administrators from AlixPartners stated there are insufficient funds to cover the company’s outstanding obligations, including unpaid wages, overdue business bills, and taxes owed to HM Revenue and Customs.
Earlier this year, the firm fell into administration, leading to a rescue deal where the US cannabis and drinks company Tilray acquired the brand, intellectual property, UK breweries, and 11 bars for roughly £33m. This agreement did not cover the majority of the bar chain, resulting in 38 closures and the loss of 440 jobs.
The financial fallout has hit 200,000 equity punks—the small-scale investors who supported the company via crowdfunding—whose stakes were rendered worthless. Further losses were sustained by major institutional players, including the private equity firm TSG, which saw its 2017 investment of £213m wiped out, including nearly £28m in recouped debts. Lender HSBC is currently expected to recover about £42m of the £61m it was owed.
AlixPartners reported that administrative costs have been inflated by the need to remove unauthorised occupiers from closed venues. Additionally, the sale of assets, such as vehicles of varying roadworthiness, yielded limited returns. Consequently, unsecured creditors, which include Manchester University, Lord’s Cricket Ground, and West Ham United FC, are expected to receive less than one penny for every pound owed.
Regarding tax and employment liabilities, while staff owed £489,000 in holiday pay and wages were covered by the government’s redundancy scheme, there are insufficient funds to reimburse the state or pay an outstanding £2.4m tax bill. A separate £3.6m tax debt, however, is slated for repayment.
BrewDog co-founder James Watt, who started the company with Martin Dickie in 2007, expressed his sorrow over the company’s failure. His tenure was often defined by controversy, ranging from criticism over marketing tactics to allegations of a toxic working culture, for which Watt issued apologies.
Since the collapse, Watt has launched new ventures, including the social media-focused business Social Tip. Following an unsuccessful attempt to buy back BrewDog, he established a new beer company called Second Best. He offered shares in this new venture to former BrewDog investors, though the move drew complaints to the Information Commissioner’s Office from recipients questioning the legality of how their contact details were obtained. The report also notes that which bought a 22% stake for £213m in 2017, had its investment wiped out and will not recoup debts of nearly £28m, private equity investor TSG. The report also notes that james Watt, who co-founded BrewDog with friend Martin Dickie in 2007, has previously said that he was left “heartbroken” by the brewer’s collapse.
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