BrewDog Retail Limited, which operated the brewer’s bar estate before the business was acquired by Tilray Brands, entered administration alongside BrewDog PLC and BrewDog International Limited in March.
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A new progress report from administrators AlixPartners showed the retail company had around £207m in unsecured creditor claims, with those owed money expected to receive nothing.
Separately, the business owed £489,000 in employee wage arrears and accrued holiday pay, while HMRC was owed £2.4m for VAT, PAYE and National Insurance.
However, the report showed employees and HMRC, which were given priority as “preferential creditors”, were not expected to receive money from the administration.
Administration difficulties
AlixPartners said there was not enough money available because administrators had recovered less than expected from BrewDog Retail’s assets, while the costs of handling the administration had increased.
Redundant employees were provided with details on how to claim statutory payments through the Redundancy Payments Service.
The report also revealed some leasehold properties were included in the initial sale, while other sites were subsequently acquired by the purchaser and third parties.
However, some proposed deals fell through despite reaching an advanced stage, resulting in additional legal and property management costs before the sites were returned to landlords.
Administrators said the additional costs, combined with less money being raised from the properties than anticipated, meant the amount recovered from the bar estate was “substantially” below initial expectations.
Unpaid bills
Further costs were found to have incurred after “unauthorised occupiers” gained access to some properties, with administrators working alongside landlords, agents and legal advisers to regain control of the sites.
BrewDog had more than £500m in debts when Tilray acquired the business in a £33m deal earlier this year.
It included the BrewDog brand, intellectual property, UK brewing operations and 11 brewpubs in the UK and Ireland, plus international sites in Australia and the US.
The collapse also left around £20m in unpaid bills owed to hundreds of UK businesses, while 38 bars closed following the takeover.
In addition, some 440 employees were made redundant and 736 transferred to Tilray.
The US drinks firm has since invested around £50m in BrewDog, with the business contributing $51.1m (£38.5m) to Tilray’s fourth-quarter revenue.
AlixPartners expects the administrations of BrewDog Retail and BrewDog International to conclude during the next six-month reporting period.
The Scottish craft beer giant was originally founded by James Watt and Martin Dickie in 2007.
