Keith Batt talks to TheShout about Nant and AWH
TheShout has spoken to Keith Batt, the founder of the Nant Distillery, about the proposed takeover of the business by Australian Whisky Holdings (AWH).
Earlier this week AWH said that 700 barrels in the Nant Barrel Investment Scheme had not been filled and many of those that had been filled had whisky that was much younger than investors would have anticipated.
Batt has responded to these comments, and others from AWH, and in a series of articles, TheShout will publish what he has to say.
Keith Batt: "It’s an interesting and very complicated situation that has developed and we are trying to understand where it is all supposed to lead as well.
"Just to put everything in to perspective and go from the beginning, on 15 October last year we signed various agreements with Australian Whisky Holdings. One was a Business Management Agreement, another was a Barrel Management Agreement and a Transactional Implementation Agreement. So all these agreements were signed and the idea was that AWH was going to start managing the business and doing their due diligence from 17 October.
"So we said ‘OK, but under the Business Management Agreement it says that you have to take on the operational costs of the business and fill the barrels going forward’, that was the agreement. So attached to those agreements was a full Barrel Register; in that Barrel Register we had every single barrel that we had ever sold, every single investor’s name and every single barrel that was to be filled with our forward production slots. That’s what we gave them.
"So they have now come out saying ‘we’ve done our due diligence and we found all this’ but no, AWH had all that information before they took possession of the business; they had all that information already. Also under the agreement they were also supposed to pay about $140,000 in agreed creditors, pay the staff who were distilling, pay the leases, pay the interest on the loans – all the things to operate a business.
"They haven’t paid any of the agreed creditors, they shut the Cellar Door, they stopped bottling, they stopped dispatching, and they wrote to all the staff and told them they weren’t to speak to the Director of the business any more. They denied the Director access to the Distillery, so Margaret (Keith’s wife) wasn’t able to go and look at the Bonded Stores or see what they were doing with the barrels or anything. We basically haven’t been there, into the distillery for five months."
SETTLING THE BUSINESS
"So it’s a bit weird for us, because we thought we were doing the right thing by letting them take over the operation of the business to really get a good understanding of the business and a good understanding of things like the barrel stock and what’s involved because it is quite a complicated business, it’s not just straight-forward.
"And then we kept writing to them asking them to tell us how much they were producing because they were distilling it under our licence, we were asking for updates on what accounts they had paid, but we got nothing.
"So, then we get to the point where we were supposed to settle in January, they couldn’t settle on 31 January. We have now given them three extensions to settle. And then they said ‘we’ve got complications, we’ll have to settle the land first and then we’ll settle the business’, that’s what they said. They settled on the land, paid the $3.85m, we paid off the bank loans etc, thinking that three days later they are going to settle on the business – they didn’t settle. Then they wrote to us on the Friday to say ‘we are terminating the Business Sale Agreement’. We asked ‘what do you mean’ and they said ‘we’ve terminated it’. So I asked them ‘aren’t you buying the business’ and they said ‘we’ve got the business’.
"‘We are not paying for it’ is basically their attitude.
"So what they’ve now done is created an absolute shit-storm around me, to deflect away from the real situation of what they are doing, which is denying us access to go and get our plant and equipment. They are denying the barrel owners their rights to go and get their barrels if they want to go and get them – after all they have paid for them. And so we are sitting here going ‘what the fuck? This is ridiculous’."
BARREL INVESTMENT SCHEME
"They are also distorting things with this 700 empty barrels claim. When we signed our terms and conditions with our barrel investors it was always on the basis that the return [on investment] starts on the date we receive the funds from the investor and then we produce in our normal forward production slot. We don’t give a guarantee when the barrel will be filled, because we can’t fill that many barrels all at once. So we can only look after the quality of the whisky and we will fill them as we go along, but the investor is not going to be disadvantaged because the return starts on the day that we receive the funds. That’s quite clear.
"What happened is that we bought 600 new, empty barrels for our forward production that were sitting in the shed. We had bought four more stills from Scotland and the whole idea was that they (AWH) were going to commission those stills and get those barrels filled. Now you can fill 600 barrels in six months, they have been there for five months now and I don’t know what they have done. Quite frankly I have got no idea what they have done in terms of how much whisky they have produced, if they have decanted any barrels, I have got no idea. Margaret has got no idea as the Director. I am helping her in an operational capacity, because she is running the business and she just does not know what to do, because they haven’t paid any of the bills.
"They’ve made out that it was never our intent to fill the barrels, that we’ve just taken the investment and then pissed off, but that’s just not true. We bought the four new stills, we had 600 new barrels in the shed, a new mash tun, we spent hundreds of thousands of dollars getting ready for expansion to meet our back-orders because the barrel program has just been so successful.
"They are trying to spook everyone, me included. They want me to buckle, to just take it. But I can’t do that because I have got an obligation to the barrel investors to buy those barrels back, because I don’t believe that AWH have any intentions of buying all the barrels back at all. I think they will cherry pick they barrels and then leave everyone high and dry.
"It is incredibly complicated and the thing is that they have no experience whatsoever in making whisky, but we do and we want our plant and equipment and we want our barrels back. But they won’t give them to us. Why not? If they don’t think the whisky is any good and they think that the brand is that shit, well just give it back to us.
"We don’t have the money to go suing a public company."
Batt also talked to TheShout about his bankruptcy and why he filled some barrels with 45 per cent ABV spirit, and we will further publish those comments.
TheShout has contacted AWH for its comments but they have yet to respond to enquiries.