Mackmyra: A Journey into Administration
Mackmyra: A Journey into Administration
Introduction
Mackmyra, the renowned Swedish whisky distillery, has recently entered administration, a move that has sent ripples through the spirits industry. Known for its innovative approach to whisky production and its commitment to sustainability, Mackmyra’s financial troubles have come as a surprise to many. This blog explores the reasons behind this development, the administration process, and what the future might hold for this iconic brand.
The Rise of Mackmyra
Founded in 1999, Mackmyra quickly gained a reputation for its unique Swedish whisky, crafted using local ingredients and innovative techniques. The distillery’s commitment to sustainability, including the use of gravity-fed production processes, set it apart in the industry. Over the years, Mackmyra expanded its product range and gained a loyal following both in Sweden and internationally.
Financial Troubles and Administration
Despite its success, Mackmyra has faced financial challenges in recent years. The whisky industry is highly competitive, and the economic impact of the COVID-19 pandemic has further strained the company’s finances. In response to mounting debts and cash flow issues, primarily arising from its bank not renewing its overdraft in March 2024, Mackmyra’s directors decided to enter administration, a legal process designed to protect the company from creditors while a solution is sought.
What Does Administration Mean?
When a company goes into administration, an independent insolvency practitioner is appointed to take control of the business. The administrator’s role is to assess the company’s financial situation and determine the best course of action. This could involve restructuring the business, selling assets, or even winding up the company if no viable alternatives are found.
What about private casks held at Mackmyra?
There is already debate on social media about the status of the customer owned casks that are maturing in storage at Mackmyra. These casks have previously been bought by customers who wanted to support the distillery and be the owners of their very own casks of the excellent Mackmyra Whisky. With prices varying from £2500 to £5000 these represent substantial investments for many owners.
Under normal circumstances the property of any company that goes into administration is taken by the administrators as collateral to settle the outstanding debts. These private casks are no longer owned by Mackmyra, but may be held under the administration process with cask owners unable to retrieve them. With administration taking many years to resolve in most cases this could mean owners are not able to retrieve their liquid or having to wait years to be able to do so. As Mackmyra casks tend to be small and age very quickly, there could be instances where the liquid “over ages” due to the delays in getting access to them.
The Future of Mackmyra
The administration process offers a glimmer of hope for Mackmyra. If the administrators can devise a successful recovery plan, the company may emerge stronger and more resilient. This could involve finding new investors, restructuring operations, or focusing on core products. However, the outcome is uncertain, and much will depend on the administrators’ findings and the support of creditors and stakeholders.
Conclusion
Mackmyra’s journey into administration is a stark reminder of the challenges faced by even the most innovative and beloved brands. While the future remains uncertain, the administration process provides an opportunity for Mackmyra to regroup and potentially return to its former glory. Whisky enthusiasts and industry watchers will be keenly following developments, hoping for a positive outcome for this pioneering distillery and to quickly and successfully getting access to their private casks.
Official Notice by Mackmyra (Source https://mfn.se/cis/a/mackmyra-svensk-whisky/mackmyra-svensk-whisky-ab-beslutar-att-ansoka-om-konkurs-8809d8c7)
“The board of Mackmyra Svensk Whiskey AB (publ) has today decided to file for bankruptcy of Mackmyra Svensk Whiskey AB (publ). The bankruptcy application will be filed at the Gävle district court.
The reason for the decision to file for bankruptcy is that Mackmyra Swedish Whiskey has not managed to secure sufficient liquid funds to continue operating the business mainly in the short term. In the longer term, there is great value in the company's products, large maturing warehouses and production facility.
During the past year, the company has carried out a major restructuring project, including significant staff reductions, better conditions in selected balance sheet items, revisions to the concept and sales structure, the effects of which are now beginning to be seen in the company's results. The company's shareholders have for several years assumed a large financial responsibility and supported the company in several rounds. At the end of 2023 at the latest, a new issue was carried out with the aim, in combination with our overdraft, to ensure the company's ongoing change work back to a stable and profitable company. When the company's transaction bank SEB, without any justification, chose not to extend the company's overdraft after 2024-03-31, the company's liquidity situation deteriorated drastically.
In May, the company received a shareholder loan from some of the company's larger owners in order to hold discussions with several industry players about in-depth collaborations and part ownership during the spring and summer. Although these discussions and negotiations had progressed very far, intensive efforts by the company's management and board, during the time available, were not enough to reach an agreement or otherwise ensure sufficient short-term financing of the company. It is also not considered possible to obtain additional financing required within the framework of a restructuring procedure.
The company, with a 25-year history as pioneers in artisanal spirit production, continues to have great assets in its strong brand, maturation warehouse and production facility, and not least in its committed customers and ambassadors.
"It is with great sadness that we have to state that, unfortunately, it is not possible to continue the company's operations. The company's management and board have struggled hard to come to terms with the company's profitability and liquidity. Despite a fantastic work by both staff and management, it is still possible not to continue. Since I took over as chairman of the board a little over a year ago, my focus, together with the newly appointed management and the board, has been to find a long-term solution for Mackmyra, but I am forced to state that time has not been enough The bankruptcy trustee now gets the chance to do something constructive with the values that exist in the company and secure the Mackmyra brand and its 25-year history." says chairman of the board Petter Ski.
" This is a sad decision, especially for our staff, our incredibly loyal customers and ambassadors. The feeling is of course reinforced by the fact that this occurs in the middle of the company's 25th anniversary and at a time when we were really on the way to turning the company's development towards profitability and a bright future," says acting CEO Patrick Björsjö.
Emma Berglund Uväng, Advokatfirman Schjødt, has been proposed as bankruptcy trustee.
The information in this press release is information that Mackmyra Svensk Whiskey AB is obliged to make public according to the EU's market abuse regulation (EU no. 596/2014). The information was submitted, through the provision of the specified contact person, for publication on 2024-08-19 08:30 CET.”
Posted on Mackmyra Website (https://www.mackmyra.se/en-US/)
The Board of Directors of Mackmyra Svensk Whisky AB (publ) has, on August 19th, decided to file Mackmyra Svensk Whisky AB (publ) for bankruptcy. The bankruptcy petition has been filed at Gävle District Court.
Read the full press release here.
We will shortly be assigned a bankruptcy trustee, to whom we refer all questions. You will find the contact details on our website as soon as a trustee has been appointed by the district court. The ownership and management of Mackmyra Svensk Whisky AB is now in the hands of the bankruptcy trustee, therefore Mackmyras staff will not be able to provide further information at this time.
It is with great sadness that we must state that it is unfortunately not possible to continue the company's operations. The company management and board have struggled hard to come to terms with the company profitability and cash flow. Despite the fantastic work of both staff and management, it is still not possible to continue. Since I took over as Chairman of the Board just over a year ago, my focus, together with the newly appointed management and the Board, has been to find a long-term solution for Mackmyra, but I am forced to conclude that time has not been enough. I sincerely hope that the bankruptcy trustee now has the chance to do something constructive with the values in the company and secure the Mackmyra brand and its 25-year history. says Chairman Petter Ski.
This is a regrettable decision, especially for our staff, our incredibly loyal customers, and ambassadors. The sentiment is naturally heightened by the fact that this is happening during the company's 25th anniversary and at a time when we were truly on track to steer the company's trajectory towards profitability and a bright future.” says acting CEO Patrick Björsjö.
Update from Mackmyra 26th Aug 2024
2024-08-26- THE BANKRUPTCY ESTATE OF MACKMYRA SVENSK WHISKY AB MAKES THE ASSESSMENT THAT PRIVATE CASK CUSTOMERS HAVE THE RIGHT OF SEPARATION:
The bankruptcy estate has investigated the issue of what shall apply to private customers who have reserved and paid for whisky/gin that has been bottled in casks for storage and later bottling and delivery via Systembolaget or the company's delivery points in Denmark and Germany.
The question is far from simple, but the bankruptcy estate has landed in the assessment that these private customers have the right of separation, which means that the stored whisky/gin shall not be considered part of the bankruptcy estate and therefore cannot be sold to pay the bankrupt company's debts.
However, this does not mean that private customers can pick up the casks. With some exceptions, the casks themselves are owned by the bankruptcy estate and not by the customers.
The payment made by the customers relates only to the whisky/gin itself, but not to the alcohol tax and VAT that is added. In addition, the provisions of the Alcohol Act prevent the customer to just pick up the casks. It is therefore necessary to find a practical solution to the problem.
Against this background, when the bankrupt company's business now is offered for sale, the bankruptcy estate will make it a condition that a buyer will respect the right of separation by honouring the vouchers issued and ensuring that the whisky/gin is bottled and that delivery can take place.
The sale process is expected to take a number of weeks and it will not be possible to give more precise information about the practical handling until an agreement has been entered into with a buyer of the business.
The bankruptcy estate also understands that there are customers whose whisky/gin has already been bottled and in some cases also been prepared for delivery to customers.
Exactly what applies to all such cases will be assessed continuously and information will be provided here via the website when the assessment is finalized.
There is therefore no point in contacting the bankruptcy estate with questions about the assessment of individual cases in this situation.
In the case of corporate customers, on the other hand, the assessment is that there is no right of separation. No special requirements will therefore be imposed on the buyer of the business in relation to those agreements.
The corporate customers who have reserved and paid whisky/gin will be listed as creditors in the bankruptcy.
NB: The ownership and management of Mackmyra Svensk Whisky AB is now in the hands of the bankruptcy trustee, therefore Mackmyra staff will not be able to provide further information at this time.
We sincerely appreciate the trust you have placed in Mackmyra Swedish Whisky over the years.