New Broo directors terminate Ballarat land deal

The new board at ASX-listed Broo has already moved to make changes, telling the ASX this morning that it had terminated a long-standing deal to sell the company’s Ballarat land.

The land in the Ballarat West Employment Zone Industrial Park (BWEZ) was acquired for $2.2 million in 2017 and was earmarked for development into a $100 million brewery.

But the “world’s greenest brewery” dreams ended when, in 2021, Broo announced it had entered a contract to sell the land to Bentley Property Group, a privately-owned development company. The deal would have been worth $7.5 million, netting the beer brand a substantial profit.

The deal, however, was dependent upon approval from Development Victoria, which was responsible for the BWEZ, and an appropriate agreement being entered into by DV and potential new owners Bentley within a prescribed timeframe.

The approval period was initially extended by 60 days from the June 2021 contract, and was extended by mutual agreement on multiple occasions up to 21st April 2022 to ensure Bentley could obtain the approvals.

But Broo has recently been taken over by new management, after founder and CEO Kent Grogan stepped down along with fellow director Mathew Boyes.

The new board today announced the termination of the deal to the ASX “given the protracted nature of the Approvals process to date, and having assessed the likelihood of such Approvals being forthcoming in the short term”.

“Broo has determined that granting a further extension to the Approval Period would not be in the best interests of shareholders.

“The Board is, as part of a wider strategic review of the business, exploring alternative opportunities to realise value from the Ballarat property in a manner that provides certainty to shareholders, and will continue to progress communications with DV in this respect,” its statement to the ASX said.

New director Kobe Li told Brews News that it was early days for the new management team, but they were gathering information on all areas of the business.

“We just got involved literally a week or so ago… we had the sale contract extended a few times and this was coming up as of yesterday, obviously they were requesting an extension,” Li explained.

“We obtained some legal advice and we believe this issue with DV seems to be the blocking issue for the project to proceed.

“What the new board has decided as per our announcement to the ASX, [is that] we determined we would not continue granting the extension to Bentley and we wanted to write a strategic review of the group including the options with Ballarat land, so we’re trying to evaluate our options in the best interests of Broo shareholders and to a greater extent all stakeholders involved, including the government and industry.

“We’re still gathering information as we speak, trying to get an understanding of DV’s thinking on this matter, it’s a lot of information gathering from our perspective. I’m trying to get a good understanding of the situation and evaluate the options,” he said.

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