Street Talk

Top Shelf International Holdings in $40m recap, Salter Brothers in

Sarah Thompson, Kanika Sood and Emma Rapaport

May 22, 2023 – 10.27am

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Listed liquor producer and marketer Top Shelf International Holdings was drumming up interest in a $35 million to $40 million recapitalisation over the weekend, with blessings from its substantial shareholder Salter Brothers.

Blue agave plants at the plantation owned by Top Shelf International, in the Whitsundays, Queensland. Bloomberg

Terms shown to prospective investors said the company would split the raising into an entitlement offer and a placement. Salter Brothers, which owns 7.24 per cent of Top Shelf via its emerging companies fund, was also leading the charge on the bookbuild.

The recapitalisation comes a month after the board installed former Moët Hennessy Louis Vuitton executive Trent Fraser, who has been running Top Shelf’s agave project, as its boss. The company had been studying up a potential sale and leaseback of its agave farm as a way to whittle down its debt.

Potential backers were told Top Shelf ran a process for the sale and leaseback but had decided to retain the agave farm in lieu of an equity injection. The agave farm, they were told, could add greater value for shareholders down the line.

The business owns liquor production, manufacturing and maturation assets. It has a 430 hectare agave farm in the Whitsundays, and a facility in Somerton in Victoria. Its brands include NED whisky and Grainshaker vodka, and it has been working on an Australian-produced agave brand.

The business swelled brand revenue by 90 per cent to $24.8 million in the March quarter and had $6.5 million normalised EBITDA. It had $12.3 million cash, and had drawn down $35 million of a $45 million debt facility with Longreach Credit.

The shares were halted Monday, just after market close. Top Shelf had a $22 million market capitalisation before the raising. It last raised in early March.