In a Christmas Eve announcement, brewer Broo revealed that it was raising $500,000 in a share placing, as well as hiring a new CFO.
At the same time, executive director and founder Kent Grogan announced in the flurry of statements that he would be selling a large proportion of his own shares in the beleaguered business.
Through his Groges Holdings Pty company, he divested just over 61 million of his shares in an off market deal at $0.016 per share, valuing the transaction at $980,000.
Grogan’s decreases his shares in the company from nearly 403.5 million to just under 342.2 million. It follows another share sale by him in November last year which saw him realise $160,000.
This also decreases the company’s voting power from a comfortable 63 per cent to 53 per cent, although Grogan also has an additional 1 million shares under his own name.
Broo also announced the hiring of chief financial officer Adrian Siah. Broo said Siah was an “experienced finance executive who has previously worked in senior roles in commercial management and investment banking”.
Brews News has approached Broo for more information about Mr Siah, but had not received a comment at time of publication.
In a separate transaction, the beleaguered Victorian brewery also advised the stock market that it had received “firm commitments” to issue 50 million ordinary shares to unnamed “professional and sophisticated investors”.
It was placing the shares at $0.01 per share to raise the capital, in contrast to the $0.016 at which Grogan’s own shares were sold.
The company said that funds raised in the placement will be used for “general working capital purposes” as it develops its portfolio of beer brands.
Broo has completed a number of share placings in the past two years to keep the company afloat as it returns consistently poor quarterly results. Last year the company reported losses of $3.2 million on revenues of $3.7 million, and a $290,000 loss in its last quarter.
Later in the year confusion also arose over the fate of Broo’s Mildura Brewery. An announcement to the ASX indicated that the company would be selling it, but later executive director Grogan backtracked on this and told Brews News that it was not for sale.
The company has been bullish about its prospects, saying it expects to return to profitability based on domestic sales alone, bringing in a Queensland distribution network with a sales target of 2 million litres annually. It currently sells 500,000 litres a year in Queensland, according to Grogan.
Broo is also expecting to see payments from a Chinese distribution deal signed in 2017 to start this year, in December. Over the seven-year deal, Broo valued the agreement at $120 million.
Shares in Broo are currently listed at $0.023 (8th January).