Beston had a juicy stake in Scorpio but now it owns the whole cow
Beston Global found its stake in a purveyor of fine meats so tasty, it’s swallowing the whole beast.
The sustainable food maker is buying ready-to-eat-meat business Scorpio Food by converting existing loans into equity.
Beston (ASX:BFC) took control at the start of January but effectively bought the original 40 per cent stake via a convertible note in 2015. The takeover was flagged in the annual general meeting last year.
The full investment in Scorpio amounts to $6 million.
Beston is deep into a restructure of Scorpio, shutting all its Colac operations and shifting everything to Shepparton.
Beston will buy Scorpio’s Shepparton building and lease it back to them at commercial terms.
“[This] will enable the Scorpio business to retire existing debt, repay creditors and refocus its working capital commitments on expanding production to meet the increasing demand for its products,” Beston said.
“Scorpio earns rental income on its extensive cold storage facilities from independent parties which provides substantial income to the business, quite separately from its own trading activities, which will readily facilitate the lease payments to BFC.”
Beston has been contacted for comment.
The company’s shares were flat on Friday morning at 20.5c.