[ad_1]
Supplied
Good Spirits Hospitality is selling Auckland bar Danny Doolan’s and eight other venues after racking up $41m in accumulated losses.
Unprofitable pub owner Good Spirits Hospitality has agreed to sell its nine bars, including the Cav and Danny Doolan’s, for $20.7 million and plans to delist from the sharemarket.
The hospitality group reported accumulated losses of $41m in its latest accounts after Covid-19 lockdowns and border closures hurt trading. An earlier plan to merge with restaurant owner Nourish Group, which would have given it better economies of scale and seen it expand to other centres, fell through last year and Nourish was later sold.
In a statement to the NZX on Wednesday, Good Spirits Hospitality said it had reached a conditional sale agreement with Brew on Quay, which owns and operates three venues in Auckland and Waiheke Island.
Brew On Quay’s owners include Good Spirits Hospitality’s chief executive Geoff Tuttle and chairperson Matt Adams, as well as industry veteran Richard Sigley, who owned Auckland’s Euro restaurant and founded the Nourish Group, and Jaime Dutton.
Good Spirits Hospitality said the deal was conducted at arm’s length.
Chairperson of the hospitality group’s independent transaction committee, John Seton, said the sale process was independent and robust and the price was at the was at the upper end of its expectations.
“We are satisfied that it is the best outcome for all our stakeholders,” Seton said.
The pub group had been struggling to stay afloat and came under pressure from its lender Pacific Dawn to improve its finances. Pacific Dawn has a 24.99% stake in the company and supported its sale.
Proceeds from the sale would be used to part repay loans to Pacific Dawn. The hospitality company’s 2022 annual report showed it owed Pacific Dawn $32m.
Good Spirits Hospitality plans to seek shareholder approval for the sale at a special meeting in the fourth quarter of this year.
The sale is also subject to key supplier approvals from liquor companies Lion NZ and DB Breweries related to pourage agreements.
Good Spirits Hospitality expects to complete the sale this year, which will see it delist from the NZX.
Shares in Good Spirits last traded at 2.4 cents, giving it a market capitalisation of $1.4m. The shares have halved over the past year and have lost 71% over the past three years.
[ad_2]