Top Shelf International (TSI) has received both foreign and domestic offers of interest after announcing it is exploring potential sale opportunities.
The rumour mill surrounding TSI has gained momentum since the company requested a suspension from trading on the ASX on 27 September this year.
At the time TSI’s statement to the ASX said: “The Company is in the process of negotiating with its senior lender and its largest creditors, but as a result of those continuing negotiations will not be in a position to release audited financial statements on Monday, 30 September 2024 as required by ASX LR 4.5.1.
“The Company continues to progress discussions with a number of parties regarding the provision of funding and potential transactions to address its short- to medium-term operating needs and the repayment of outstanding creditors.
“The Company will continue to closely review its operating strategy while it is suspended from trading to ensure that efficiency and profitability is optimised and a robust and appropriate funding structure is in place.”
In addition several Non-Executive Directors have resigned from the TSI Board since August 2024, including John Selak, Stephen Grove and Philip Baldock. In October this year Chief Financial Office Ben Kennare finished in his role, with Dimitrious Argyriou stepping in as Kennare’s interim replacement.
In October Top Shelf International announced it was open to offers, stating in an update for the first quarter of FY25, its intention to “explore other potential transactions to address its operating needs and repayment of creditors”.
That update also set out the strong performance by brands within the TSI portfolio, which should make the business an attractive proposition for buyers.
This included a 36 per cent growth in sales volume within the Endeavour Group, compared to the first quarter of FY24, plus positive reactions in the trade to new products from TSI, particularly with NED Golden Bickie, the NED 12 per cent RTD range and the Act of Treason agave spirit.
Despite the strong performances of TSI’s brands in the industry, the company’s debt levels are a continued concern, particularly with the ATO undertaking recovery actions over an outstanding excise debt obligation of $4.7m.
In an ASX announcement on 31 October 2024, TSI said: “The Company continues to explore options to address the outstanding excise tax liability with the ATO.
“The Company is seeking resolution through an agreed payment plan with the ATO, which is intended to be aligned with and dependent on the outcome of discussions with parties regarding the Company’s funding along with potential transactions.”
A spokesperson for TSI told The Shout that the sale process has begun with some parties already showing interest.
The spokesperson said: “Top Shelf International has engaged EY as its advisor for a potential sale of its business or assets.
“Given the Company has received both domestic and international interest, the Board has formalised a process to engage the broader wines and spirits community.”
The Shout will continue to monitor the situation at TSI and keep you up-to-date with what is happening.