Restructuring firm Ankura has been appointed to operate ASX-listed Mighty Craft which called in administrators after failing to repay sizeable amounts of debt.

The company, which recently sold Adelaide Hills venue and brewery Lot 100 as well as Adelaide craft beer and spirits brands Mismatch and 78 Degrees, said it was undertaking a divestment and restructuring program to reduce its debt before appointing administrators.

The quarterly cash flow report for Q3 FY24 showed Mighty Craft had debts of $27 million, of which $22.7 million was loans.

As of the end of Q3, Mighty Craft said it repaid $2.98 million towards borrowings during the quarter.

It now appears that Mighty Craft’s divestment process has failed, as did a proposed merger between Better Beer and Mighty Craft which the listed firm said was “fundamental” to its future prospects.

Mighty Craft said today that the proposed merger “required the support of MCL’s senior lenders and the shareholders of Better Beer” and an injection of cash.

“It now appears unlikely that an agreement will be reached between MCL’s senior lenders, Better Beer and Mighty Craft that is acceptable to all parties,” Mighty Craft said.

“The directors therefore formed the opinion that the company should be placed into voluntary administration to evaluate options for the company to continue as a going concern, or if this is not possible, that an administration will result in a better return for the creditors and members of the company than would otherwise result from an immediate winding up of the company.”

Administrators Liam Healey and Quentin Olde have now assumed control of Mighty Craft and will be “undertaking an urgent assessment of the company…to determine the appropriate way forward to maximise the outcome for all stakeholders of the company”.

“In the meantime, the administrators have confirmed that the operations of the company and its subsidiaries will continue on a business-as-usual basis.”

Mighty Craft said a first meeting of creditors will be held within eight business days, and trading of MCL shares on the ASX has been suspended.

Also announced today, AML3D managing director Sean Ebert resigned as director of Mighty Craft just prior to the announcement regarding the appointment of administrators.

In its most recent quarterly update, Mighty Craft said it had repaid $2.3 million of debt during the third quarter of FY24.

Proceeds from the sale of 78 Degrees and Mismatch – totalling $5.2 million – also went towards repayment of debts.

Both brands were acquired by former Carlton & United Breweries CEO Peter Filipovic, who also bought Lot 100 earlier this month for “no less than $1.5 million”. Proceeds of the venue sale also went directly to MCL’s senior lenders.

The company has been in choppy waters this year, with its most recent half-year results described as “mixed” by managing director Katie McNamara. Mighty Craft said revenue was up by 25 per cent and its loss was reduced from $2.4 million to $1.6 million.

In February, the company reached an agreement with its lenders and creditors which involved extending a $5 million bridging loan with a Swiss family office.

The company was also in debt to the tax office at the time to the tune of $8.8 million. Mighty Craft went on a payment plan for full settlement of the outstanding liability to be paid by 31 July.

Further, the company said it was in ongoing discussions with Pure Asset Management about repayment of a $20 million loan with the firm.