Botswana Butchery owes staff more than $500,000 as administrators recommend closure

The group behind undermanaged Botswana Butchery restaurants in Sydney, Melbourne and Canberra owes creditors $4.5 million, according to a report looking at one of the biggest shocks to the hospitality sector in 2024.

The financial risks of the restaurant industry are laid bare in a report from administrators to creditors. Details include unpaid “tax bills” across the group totaling $3.52 million; employee entitlements exceeding $500,000; and creditor debts that include $1.81 million in unpaid rent, although administrators say they will be partially offset by security bonds.

The New Zealand-owned steakhouse entered voluntary administration in early April with the appointment of administrators Duncan Clubb and Andrew Sallway of accountancy firm BDO. The latest report to creditors – which also details $9.7 million in bank-secured debt and $9 million in business-to-business loans – makes grim reading for an industry besieged by higher operating costs and lower consumer spending. consumers.

The administrator’s report said the group was “probably insolvent” since last September.

The Botswana Butchery restaurants continue to operate under the supervision of Clubb and Sallway, who declined to comment further. But the administrators’ recommendation is that “the best thing for the creditors would be to liquidate the companies.” With a meeting of creditors scheduled for Tuesday, May 7, the administrators have not yet received a full deed of agreement from the company offering an alternative path from its directors or shareholders.

It also highlights how much is at stake in restaurant investment. While the group’s warehouses have value to creditors, an investigation by administrators found the cost of removing kitchen equipment carried significant depreciation.

Parent hotel group Good Group’s arrival in Australia appeared timely, having opened during the post-pandemic dining boom. Botswana Sydney opened its doors at 25 Martin Place in December 2021, attracting experienced Sydney chefs. Melbourne followed in 2022 and Canberra earlier this year.

Good Group also opened sister restaurants in Sydney and Melbourne, White + Wongs, with some users on social media questioning the appropriateness of the name.

White + Wongs had even bigger problems behind the scenes. Both establishments were not profitable since their opening. White + Wongs and its Melbourne subsidiary, Wong Baby Chapel, ceased trading prior to BDO’s appointment. The Sydney branch closed last month.

Financial reports suggest there were some reasons for optimism. Botswana Butchery in Sydney and Melbourne reported profits during its short trading history. But the economic crisis and the group’s problems in general were putting pressure on the business.

What’s still unclear is where Good Group’s owners think they went wrong. According to the report, so far the company directors have not communicated to the administrators their opinion on the “reasons for the companies’ failure.”

In New Zealand, Good Group’s operations are not affected.