Australia’s Nant Distilling Enters Receivership

March 16, 2017 – Another day, and another new chapter in the ongoing soap opera surrounding Australia’s Nant Distillery, where a receiver has now been appointed to protect the interests of one of the distillery’s largest secured creditors. Eclipx Commercial holds an estimated $2.5 million AUD ($1.92 million USD) of outstanding loans to Nant Distilling secured by stills and other distilling equipment, and has named FTI Consulting as receivers and managers for the Tasmanian distillery. Eclipx specializes in providing industrial financing and equipment leasing to companies in Australia and New Zealand. In Australia, receivers are typically assigned to recover as much money for secured creditors as possible, either by selling the entire business outright or disposing of secured assets separately.

The equipment was not included in last month’s sale of the Nant Estate to Australian Whisky Holdings, nor was Nant’s inventory of maturing whisky – including a significant number of barrels purchased by investors over the last several years. The equipment and barrels were part of a separate deal between the two companies that fell apart earlier this month, leading to a series of accusations by both Australian Whisky Holdings and Nant’s founder Keith Batt, along with his wife, Nant director Margaret Batt. Keith Batt officially relinquished his position as Nant’s director at the end of 2015 when he filed for personal bankruptcy listing around $16 million AUD in outstanding debts, but has continued to act as a spokesman for the company.

In an email to WhiskyCast, FTI’s Quentin Olde declined our request for an interview at this time, noting that the firm “only went in yesterday so we are trying to work it all out.” However, he provided the following statement:

• Quentin Olde and Joseph Hansell of FTI Consulting have been appointed receivers and managers of Nant Distilling Pty Ltd by Eclipx Commercial Pty Ltd, a secured creditor.
• The appointment follows the ongoing dispute between Nant and Australian Whisky Holdings, and has been made in order to secure the commercial interests of Elcipx Commercial.
• Australian Whisky Holdings owns the property at Bothwell in Tasmania where the Nant Distillery is located, not Nant Distilling Pty Ltd or the assets of that business, including names and trademarks.
• The receivers will secure the assets of Nant Distilling Pty Ltd, including all barrels and their contents, and have them relocated to a secure bond store while ownership is determined. 
• It is too early to say what the status of the assets is, and the receivers are not in a position to make any definitive statements about ownership at this stage.

This is in direct contradiction to a claim made by Keith Batt today in an email to WhiskyCast. When asked to confirm reports that Nant Distilling had entered receivership, Batt replied:

“We deliberately placed Nant Distillery Pty ltd into receivership today as the only way to force AWY to give up the plant and equipment and the barrels. No other nant companies are affected. A drastic situation called for drastic action.”

It should be noted that Quentin Olde of FTI Consulting confirmed directly to WhiskyCast that the Batts had no role in engaging FTI as receivers. Keith Batt has not yet responded to our email noting Olde’s comment. The receivership comes as workers at one Nant’s whisky bars in Melbourne have walked off the job because they haven’t been paid, according to ABC News. Nant’s network of Australian whisky bars are part of a separate company within the Batt family’s Nant Parties holding company.

Australian Whisky Holdings issued a news release through the Australian Stock Exchange today, stating that it is open to negotiating with secured creditors to buy the distillery’s equipment and trademarks. The publicly-traded company had resumed distilling at the Estate, but that is now in question given the receiver’s move to take control of the equipment as well as the barrels. In the statement, the company expressed plans to “commission alternative plant and equipment” for its operations should it be unable to work out an agreement with Nant’s secured creditors. Chief Executive Chris Malcolm has not yet responded to our emailed request for an interview on the status of operations at the distillery or the fate of the barrel inventory.  The statement did not address the future of Nant’s maturing barrels, including those owned by individual investors.

That has created concern among some of the Nant barrel investors following word of the receiver’s move. In the public Facebook group created by barrel investors, it was noted that “the contents of the barrels belong to us, the investors” and that the investors signed contracts with yet another Nant company, “Nant Barrel Holdings Pty.” We have asked Quentin Olde about the decision to take control of the barrels, and received this response Friday morning (Australian time):

“We understand that the Company was in possession of whiskey stock some of which is subject to a variety of barrel investment offerings entered into with various barrel investors and various Nant related entities prior to our appointment.
It is the Receivers and Managers intention to endeavour to secure all of the barrels in the Company’s possession in order to protect it from any risk of immediate loss or sale or use by unauthorised parties.  Once secure the Receivers and Managers plan on undertaking a process to accurately determine the respective ownership and other interests both in the barrels and their contents.
The Receivers and Managers will not deal with the investor stock without notifying and making arrangements and obtaining consent of the respective barrel investor.
Given the ongoing dispute between AWH and Nant the Receivers and Mangers consider it is essential to secure the assets of the Company and the Investor Stock to ensure all creditors, owners and investors interests are protected whilst a proper investigation can be completed.” 

Until now, AWY (the ticker symbol for Australian Whisky Holdings on the Australian Stock Exchange) had claimed the right to manage the barrel inventory under one of the agreements that was terminated earlier this month. Chief Executive Chris Malcolm notified barrel investors earlier this month that an audit of the barrel inventory showed at least 700 barrels sold to investors have not yet been filled with new make spirit, and outlined other discrepancies with the inventory. Keith Batt, speaking on behalf of Nant director Margaret Batt, has denied those allegations and accused AWY of trying to drive Nant into the ground in order to acquire its assets at a lower price.

This story will be updated as more information becomes available.

Editor’s note: This story has been updated with additional details on the status of Nant’s inventory of maturing whisky.

Links: FTI Consulting | Eclipx Group | Nant Distilling | Australian Whisky Holdings