BlueBay takes hit on €7.8m loan to Rye River brewery
State-backed lender BlueBay Ireland Corporate Credit was forced to swallow a near €5m write-down last year on the holding value of a loan extended to Rye River, after the Kildare-based craft brewer encountered cashflow difficulties.
The accounting move does not imply any failure by the borrower, or strain in the borrower relationship.
However the recently filed annual accounts for BlueBay offer a rare insight into the nature and quality of the specialist lender's loans.
BlueBay's accounts detail 10 new borrowers signed up in 2016, but only the debt issued to DP Financial - the parent company of Rye River, which produces the craft beer McGargles - required an adjustment.
In its financial statements, the non-bank firm disclosed "it has written down its exposure by €4.71m to €3.12m" from a par, or face value, of €7.84m. BlueBay attributed the impairment to "cashflow issues caused principally by the reduction of trade credit from one of" Rye River's trade creditors.
BlueBay's Pat Walsh declined to comment on the loan write-down.
However Rye River's new boss, Tom Cronin, said the problem stemmed from a change in a distributor contract with Dutch brand Bavaria.
The Celbrdidge-based company had struck a partnership with Bavaria in 2014 but in 2016 the contract switched to a non-exclusive arrangement after the operator of the Netherland's second biggest brewery struck a distribution and marketing deal with Molson Coors.
Mr Cronin stressed Rye River was not in dispute with Bavaria and emphasised the Celbridge-based brewer is on course for one of its best growth years since its establishment in 2013.
Mr Cronin also praised the "support" shown by BlueBay over what had been a "tough" restructuring period.
BlueBay was formed in 2013 with the help of money drawn from the National Pension Reserve Fund, as part of an initiative to get credit to small to medium enterprises.