Dozens of Scottish businesses and public bodies are facing heavy losses following the collapse of BrewDog, with administrators confirming creditors owed hundreds of millions of pounds are likely to recover little or nothing.
Unsecured creditors of BrewDog’s former retail business are expected to receive nothing at all, while unsecured creditors of BrewDog PLC are currently expected to recover less than one penny for every £1 they are owed.
The Ellon-based brewer fell into administration in March with debts running to more than £500 million before its brand, breweries and selected bars were acquired by US drinks group Tilray in a £33m rescue deal.
A new progress report from administrators AlixPartners has now revealed the scale of the losses facing the companies and organisations left behind by the deal.
Around £207.7m of unsecured creditor claims have been received against BrewDog’s former retail business, with administrators saying there is not expected to be enough money available to pay a dividend to those creditors.
Around £190m of unsecured claims have meanwhile been received against BrewDog PLC. Administrators currently estimate those creditors will receive a dividend of less than one penny in the pound.
The collapse has left a long list of Scottish companies and organisations out of pocket, ranging from major logistics and packaging businesses to councils, accountants, engineering companies, food producers and small independent firms.
Around 59 businesses and organisations in Aberdeen and the north and north-east of Scotland alone were listed as being owed a combined £2.38m in the administrators’ earlier statement of proposals.
The largest identified local creditor is Dyce-based logistics company ARR Craib Transport, which was listed as being owed more than £1.56m.
Aberdeenshire Council was owed £238,252, while Aberdeen City Council was listed as a creditor for £23,559.
Packaging company Pitreavie Packaging was owed £115,636, while Udny-based Sinclair Agricultural and Recycling Services was owed £115,591.
Other north-east businesses on the creditor list include Star Innovations, owed £32,317; MCL Medics, owed £28,699; Scots Bearings in Dyce, owed £19,476; Newmech Services, owed £15,699; and Aberdeen accountants Johnston Carmichael, owed £15,234.
The effects reach down to considerably smaller businesses.
The Coffee Apothecary in Ellon was listed as being owed £4,421, while Ewan Morrice Quality Butcher in Peterhead was owed £1,702.
The Ythan Bakery in Ellon appeared on the list for just £106.
Other Scottish creditors identified in administration documents include Glasgow-based Tennent Caledonian, listed as being owed £128,327, and North Lanarkshire Council, owed £86,950.
BrewDog Retail also had £489,000 of liabilities relating to employee wage arrears and accrued holiday pay.
HM Revenue and Customs is owed another £2.4m in VAT, PAYE and National Insurance.
Administrators said there was expected to be insufficient money available to make a distribution even to preferential creditors in the retail business. Former employees have instead been able to make claims through the UK Government’s redundancy payments scheme.
The scale of the financial fallout contrasts with the £33m paid by Tilray for selected BrewDog assets.
The deal included the BrewDog brand and intellectual property, its brewing operations at Ellon, plant and machinery and a selection of its bars.
The administration resulted in the closure of dozens of BrewDog venues and hundreds of redundancies, while the core brewing operation and a smaller bar estate continued under new ownership.
BrewDog had grown from its beginnings in Fraserburgh in 2007 into one of Scotland’s most internationally recognisable drinks businesses.
Founded by James Watt and Martin Dickie, it expanded through its Equity for Punks crowdfunding programme, a global bar estate and the development of its large brewery at Ellon.
Its collapse also effectively wiped out the investment of Equity for Punks shareholders who had collectively put tens of millions of pounds into the business.
The latest report shows the administration process itself is continuing to generate significant costs.
AlixPartners charged just over £2.8m for work during the first six months of the administration, according to the progress report, with the process potentially continuing until 2028.
Administrators have said the £33m Tilray transaction represented the best available outcome from an accelerated sale process in which six indicative offers were received.
For many of the Scottish companies that supplied and supported BrewDog during its rise, however, the collapse has left unpaid bills that are now unlikely to be recovered.