Beston Global Foods will update market on its massive debt...

Beston Global Foods will update market on its massive debt pile

By CAMERON ENGLAND

Almost twomonths after failing toflog$55mworthofNAB debt, Beston GlobalFood Company is poised to make an announcement on its funding position, with its liabilities sittingat more thanten times itsmarket value onmost recent figures.

The SouthAustralian dairy company, mostlyfocused on cheese andlactoferrin ,has beentrying to shore upthe balancesheet ona numberof fronts withlimited success to date.

The company’s loss-making Provincial Food Group meat division has been on the sale block for sometime,with a sale originallyexpected to befinalised by theend of 2023,howeverthisisstilldraggingon.

The company ’said in its March quarterly that the business was “in the advanced stages ofnegotiation for divestment andall proceeds willbe used tofurther pay down debt’’.

The Australian revealed in May that Beston had been trying to offload $55m in debtheld by the NAB, but had not been successful in seeking a buyer.

The company’sMarch quarterly showed Beston had drawn down $69.1m of an available $70.2m infinance facilities, and operating cash flow was still strongly negative to the tune of $3.4m.

During the past half year the company wrote to its milk suppliers telling them they’dhave to split their paymentsinto an initial 85 percent payment followed by the residual due to the company’s cash flow crunch.

Beston experienced its highest milk flows on record over the first nine months of the past financial year ,and given the company is obligated to pay for all the milk it isdelivered, this put pressure on the company’s working capital.

There are hopes among company watchers that a reset in the milk price paid tofarmers will take some pressure off, and thepending market announcement also says there will be a milk supplyupdate.

Beston lost two board members in late Maywith deputy chairman Kevin Reid andnon-executive director Cheryl Hayman departing, leaving the company with just three board members-founding directors Roger Sexton and Stephen Gerlach, as well asNeil Longstaff.

Late last week former KeyInvest managing director Ian Campbell joined the board.

Dr Sexton has chaired KeyInvest since 2003, and was chair for all of the14 years Mr Campbell was in the top job.

Beston shares last traded at 0.3c, valuing the company at just $6m. It has not turned a profit since listing in late 2015 and last year turned in a record loss of $48.8m, even as revenue surged to a record $169.6m.

The trading halt is expected to stay in place until Wednesdaymorning.