Troubled beer brand Cobra has been saved from its creditors after Carling owner Molson Coors bought a controlling stake through a pre-pack administration.
Cobra entered administration on Friday, paving the way for Molson Coors to instantly buy a 50.1% stake for £14m. Unsecured creditors, including Wells & Young’s, which brews Cobra under licence, will receive nothing.
Collectively, the brand’s creditors were owed around £75m. Secured creditors, primarily lending banks, will receive the full £20m owed.
Sales of Cobra are growing at 20% year-on-year but despite strong sales the company has never turned a profit. It had already cut its workforce from 150 to 50, with four directors departing in the lay-offs.
“We had no choice but to go down this route,” said Cobra owner Lord Bilimoria, who retains a stake in the company. “I feel terrible about that. I feel gutted that the unsecured creditors aren’t going to be able to be paid.”