Administrators to BrewDog have confirmed that HSBC will recover £42.5m of the £59.7m it was owed across its lending, equipment finance and invoice finance arms, leaving a shortfall of about £17.2m. Former staff are owed £489,000 in unpaid wages and holiday pay, and HMRC will lose £2.4m.
The figures, filed by AlixPartners on Thursday, set out the creditor waterfall following the collapse of the Scottish brewer that once carried a £1bn valuation.
HSBC, a secured creditor, was owed £31.2m and will recoup £14.5m, a shortfall of £16.8m. Its Equipment Finance arm was owed £12.3m and will recover £11.8m, leaving £523,486 outstanding. HSBC Invoice Finance, owed £16.2m, is being repaid in full — the ordering of the security, rather than the size of the exposure, determining who gets made whole.
BrewDog was founded in 2007 by James Watt and his school friend Martin Dickie, and built much of its early balance sheet through Equity for Punks, the crowdfunding programme that sold small stakes to tens of thousands of retail investors in exchange for beer-related perks. That shareholder base became the company's defining feature and, in the end, the group with the weakest claim.
The brewer was sold out of administration in March to Tilray Brands, the American cannabis and craft beer group, for £30m. Tilray acquired part of the bar estate and several brewing sites; everything else was left in the administration. The transaction cost 484 employees their jobs.
Equity punks received nothing from the transaction. Watt has since offered them free stakes in his subsequent ventures, an attempt to make good on a cap table that delivered no exit for the retail shareholders who financed the company's expansion.
The sequence is a familiar one at the end of a crowdfunded scale-up. Secured lenders sit at the top of the waterfall and recover most of their money; preferential claims from staff and HMRC rank behind them and are met only partially; ordinary shareholders, whatever their number, rank last and receive the residual, which in this case was nothing.
For the UK's crowdfunding market, BrewDog remains the largest test case of the model at scale: a business built on successive Equity for Punks rounds, sold for £30m, and wound down with its ordinary equity extinguished. The administrators' figures now put a number on what was left for each class of creditor.
BrewDog declined to comment on the filings. HSBC had not commented at the time of publication.
Original source: City AM — https://www.cityam.com/hsbc-to-lose-17m-in-brewdog-collapse/
