Potential buyers circle Beston Global Foods amid debt crunch
One of the Murraylands’ biggest employers, with dairy factories at Jervois and in Murray Bridge, has been placed in a trading halt pending news about its future.
Employees at one of the Murraylands’ biggest companies are waiting to find out whether it will be sold as it dices with significant debts.
The Beston Global Food Company employs hundreds of people at its dairy factories at Jervois and in Murray Bridge.
The company is listed on the Australian Stock Exchange, but its shares have been in a trading freeze for the past month pending an announcement about its future.
“Beston is currently in negotiations on alternative funding arrangements to refinance the existing debt and to provide working capital for the funding needs of the company,” the company said in a statement to the ASX on July 5.
“Interest has been provided from parties who are currently undertaking due diligence on the company to determine if a refinancing will be offered as indicated.
“Such a transaction is necessary for Beston’s continued financial viability.”
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On July 17, the company announced that it had eased the pressure by selling off a subsidiary, Provincial Food Group, for $4 million.
It followed that up this Wednesday with an announcement that its bankers had extended its debt facilities by three months, to September 30.
In the meantime, Beston had received interest from several parties who might consider taking over its assets, including the local dairy factories.
None of the offers were formal or binding as yet.
Beston made $170 million worth of net sales in 2023-24, having turned 165 megalitres of milk into products including 15,000 tons of mozzarella and 17t of lactoferrin.
It paid out $120 million to dairy farmers over that period.
The company blamed its predicament on challenging trading conditions, including higher costs, an influx of imported dairy products and inflexible government regulations.
Beston Global Foods has won a host of awards in its relatively short history, including the title of Australia’s best cheddar cheese at last year’s Australian Grand Dairy Awards.
The company took over the Murray Bridge and Jervois dairy factories after their previous owner, UDP, went into receivership in 2015.
- More information: bestonglobalfoods.com.au.
