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Keybridge Capital (ASX:KBC) has called in administrators after chocolate and toy play Yowie Group (ASX: YOW) asked for $4.6 million in lingering debt to be repaid from the already troubled company.
KBC has appointed Gideon Rathner from Lowe Lippmann Chartered Accountants as voluntary administrator of the company.
It comes amid a battle in the Supreme Court of NSW instigated by Keybridge shareholder, listed investment company WAM Active (ASX:WAA), which has included an investigation of KBC’s solvency and blocked its ability to raise capital – a move planned since last October – which KBC claims was key to it obtaining critical debt financing.
It would seem Yowie’s demand for loan repayment could have been the last straw.
Yowie last week announced “immediate steps to shift its chocolate sourcing to the U.S.” to avoid 65% of the tariffs it’s set to cop on its chocolate. Perhaps it’s not surprising then, that off the back of that, it’s now calling in its cash.
Pay up! Yowie gives one day’s notice
In an announcement to the market yesterday, Keybridge advised that (through an independent sub-committee), Yowie Group had formally demanded the repayment of the
outstanding loan balance last Thursday.
The chocolate and toy company had demanded it be paid by 5pm last Friday, February 7. The amount with interest and balance came to about $4.6m.
The loan, which was provided under an agreement in May last year, had a three-year term unless terminated earlier.
Keybridge said YOW exercised its rights under the loan agreement to demand full and immediate repayment.
Thanks a lot, Mr Trump
This all comes in the wake of President Trump’s announcement he’d impose a 25% tariff on all imports from Canada as well as a 10% tariff on all imports from China, slamming Yowie in both directions.
Yowie imports a portion of its chocolate and packaging from Canada and its toys
from China, prior to production of its Yowie product in its U.S. facility.
So, if Yowie doesn’t mitigate tariffs by updating its supply arrangements, it says it will incur about US$0.8m a year of additional costs.
Keybridge couldn’t raise capital
Keybridge says Yowie’s claim for repayment cited – amongst other things – “delays in Keybridge’s proposed capital raising, which was understood to repay a material portion of the loan, causing a consequential knock-on effect to its business.”
Keybridge is an investment and financial services group with a portfolio of listed and unlisted investment/loan assets including life insurance (New Zealand), property and funds management sectors, and substantial holdings in Yowie; Benjamin Hornigold (ASX: BHD); HHY Fund, Molopo Energy and RNY Property Trust.
Keybridge blames court action for preventing it from raising capital. One of WAM Active’s top 20 holdings is in Keybridge.
“The most recent injunctive relief obtained by WAM preventing shareholders from approving a capital raising (including raising money from WAM), is supported by an undertaking as to damages from WAM,” Keybridge told the market yesterday.
“The company was unable to reach a formal agreement regarding an extension or restructuring of the loan given the restrictions around its future capital raising capability.”
KBC shares are now suspended, it last traded at 4.7c; WAM last traded at 87.5c, and YOW last traded at 2c.
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