Black Sheep Brewery CEO Charlene Lyons leaving firm in wake of controversial administration deal

A spokesperson for the Masham-based company said Ms Lyons “is stepping down to pursue other interests”.

It follows the firm’s controversial sale to London investment firm Breal Capital for £5m last summer in a pre-pack administration deal – a process that effectively allows businesses to continue trading seamlessly as before with the same name but can cause controversy because of its impact on creditors owed money.

The move meant taxpayers and creditors are expected to lose out on around £4m while an associated change in company structure meant around 1,000 shareholders had the value of their shares wiped out. Three of the four pubs Black Sheep ran in Yorkshire also closed their doors.

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The move secured the future of the business after Black Sheep made a £1.6m loss in 2022/23 as it struggled with the fallout from the pandemic and rising costs.

Ms Lyons and fellow directors Robert Theakston and Jonathan Theakston all became directors and minority shareholders in the new company set up by Breal to continue running the Black Sheep operation.

It has now been announced she is leaving the business and Mark Williams, CEO of Keystone Brewing Group (formerly Breal Group), which owns Black Sheep alongside a number of other breweries, will assume CEO duties.

He will be assisted by John Hunt, former MD of Purity Brewing Co, in the newly created position of Group CFO.

Mr Williams said: “We wish Charlene all the best in the future.”

Earlier this year, a £1m investment in Black Sheep Brewery’s Masham site was announced. The investment entails an entirely new tank farm and brewhouse at its Wellgarth site, and the complete transformation of the capability and capacity at its Fearby road packaging facility.

Earlier this month, it was announced that Breal Group would rebrand to Keystone Brewing Group “in a move to solidify the group’s commitment to the future of each brand within its portfolio”.

At the time of the sale of the business last summer, creditors were owed around £6m. This included a large proportion of two Government-backed Covid loans taken out by the brewery.

In August 2020, it took out a £3.125m Coronavirus Business Interruption Loan Scheme (CBILS) and in July 2022, took out a further £1.6m from the Recovery Loan Scheme (RLS) initiative.

At the time of administration, £2.5m of the CBILS loan and all £1.6m of the RLS loan remained outstanding.

A recent progress report published by administrators Teneo Financial Advisory stated that £2.26m has been repaid towards the loans from lender Close – leaving £1.84m outstanding.

Both loans are backed by the Government, meaning 80 per cent of the outstanding CBILS money and 70 per cent of the RLS loan will be covered by the state.

Dozens of unsecured creditors collectively owed more than £1.5m have been told they are “unlikely” to receive any money back.

There will also be no return of money to a company called Dewscope, which had provided £500,000 in loan notes.

Some money has been repaid. Close, which was owed £6.3m including the Covid loans, has had £4.46m returned.

A £1.5m asset finance arrangement with Lombard is not expected to be adversely affected.