Black Sheep Brewery shareholders 'in the dark' over build-up to firm's pre-pack administration

Former Black Sheep Brewery shareholders “remain completely in the dark” about multiple issues regarding the firm’s controversial sale into new ownership via a pre-pack administration deal, it has been claimed.

Steve Taylor was among the original shareholders in Black Sheep Brewery after the company was set up in 1992.

He was one of around 1,000 shareholders whose shares were wiped out by last year’s sale of the business, which was restructured from a public listed company to a new private limited company.

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The Masham-based company was sold in May 2023 to London investment firm Breal Capital for £5m 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.

Black Sheep Brewery in Masham, North Yorkshire.Black Sheep Brewery in Masham, North Yorkshire.
Black Sheep Brewery in Masham, North Yorkshire.

A progress report by administrators Teneo has recently been published and revealed that taxpayers and creditors owed money by the previous iteration of Black Sheep are likely to lose out on around £4m they were owed.

Mr Taylor, a recently retired chartered compliance professional who has been in contact with other former shareholders about the situation, said the report does not provide detailed information about the lead-up to the administration.

Mr Taylor has previously written to Teneo to highlight that the last Black Sheep accounts published in September 2022 stated the company was a going concern and that “the directors have prepared forecasts for the 12 months from the date of signing which show that the group is able to meet its obligations as they fall due”.

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He asked Teneo to investigate why those statements contradict the decision to put the firm into administration and sell it just a few months later.

He said today: “The progress report doesn’t tell us what happened between the AGM of September 2022 through to May 2023 when the brewery was declared insolvent. I have tried to get information from the administrators and despite a code of ethics which requires transparency, they refused to disclose any company documents from that period.

"Shareholders remain completely in the dark.”

Teneo did not wish to comment. A further progress report is expected to be issued by the administrators in June.

Mr Taylor believes greater efforts should have been to raise funds from shareholders before the company was placed into administration.

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A previous report produced by Teneo said an equity raise process “focused on high net worth individuals” had taken place prior to administration but had been unsuccessful.

Mr Taylor said he wants local shareholders who have lost out to contact their local MPs, including Prime Minister Rishi Sunak who represents the Richmond constituency.

"Thirty years ago Black Sheep was a UK plc start up. The Prime Minister has recently urged individuals and pension funds to invest in such companies - and yet the government appears to be happy to see shareholders deprived of their assets without any information or say whatsoever.”