Australia’s Brownes Dairy has been put up for sale, the restructuring advisory firm hired to oversee the process has confirmed.
According to a statement issued by McGrathNicol Restructuring, the firm has been appointed receivers of the shares in Australian Zhiran Co. Pty Ltd, which is the ultimate holding company in the group that owns Brownes Dairy.
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“The appointment of the receivers is limited to the shares in AZC and does not affect the operations of Brownes Dairy, which continues to trade on a ‘business as usual’ basis,” the statement read.
“The receivers will shortly commence a process for the sale of Brownes Dairy via the AZC shareholding that is the subject of their appointment.”
According to The Australian Financial Review, Brownes Dairy was put on the block after its lender China’s Mengniu Dairy Co. called in a $200m loan.
Brownes was sold – by Archer Capital, which bought it in 2011 – to Australia Zhiran Co. in 2017, a vehicle backed by a consortium that also had investment firm Changchun Lianxin Investment Consulting Company as a member.
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By GlobalDataMengniu Dairy was one of the key lenders in that acquisition.
Speaking on ABC‘s Western Australia Country Hour earlier today, Brownes Dairy CEO Natalie Sarich-Dayton said: “On Monday 14 April McGrathNicol were appointed over the shares in our holding company Australian Zhiran Co by China Mengniu Dairy, one of the key lenders behind the original acquisition of Brownes Dairy.
“The process that unfolds is related solely to the shareholding level above Brownes Dairy. It has absolutely nothing to do with our day to day operations in Western Australia. It’s business as usual for Brownes Dairy.
She added: “I understand there was a default on the loan payment and as a result Mengniu are trying to recover the money. It’s absolutely nothing to do with our operation in Western Australia. This is purely at our parent ownership level back in China between two parties … it’s got nothing to do with Brownes. Brownes is a very profitable business, we are in cash positive. There is absolutely no risk to out operations here.”
Though complimentary of the current owners, Sarich-Dayton supported the idea of returning to Australian ownership. “We had an incredible ownership structure over the business over the last seven years … we don’t have debt at Brownes Dairy … If we end up back in Australian hands that would be absolutely wonderful for our brand and our business.”
Neither Brownes Dairy nor Mengniu Dairy immediately responded to a request for comment.
Founded in 1886, Brownes Dairy calls itself Western Australia’s oldest dairy company. It sells a range of yogurt, cheese and coffee nationally through Australian supermarkets Coles, Woolworths and IGA, according to Inside FMCG.
In February, Mengniu Dairy issued a profit warning for 2024, pointing to falling sales and impairments on business units.
The Hong Kong-listed group expects to record a profit of approximately 50m yuan ($6.9m) to 250m yuan for 2024, a significant drop from 4.8bn yuan in 2023.
According to a stock exchange filing, the slump stems from impairment provisions at its subsidiary Bellamy’s Australia and asset devaluation at China Modern Dairy.
In October, vice chairman and former CEO of Mengniu Dairy Jeffrey Minfang Lu stepped down.
