East Imperial halts trading in cashflow woes

Upmarket tonic maker East Imperial has ceased trading and is in the process of appointing a liquidator after struggling to manage ongoing cashflow issues.

The Auckland-based beverage exporter is listed on the London Stock Exchange, and suspended trading in its shares on Tuesday. East Imperial is now preparing to appoint liquidators or administrators.

The company is understood to employ fewer than 10 staff in New Zealand.

East Imperial was founded by Tony Burt, formerly chief executive of M&C Saatchi, in 2012, and grew quickly to become a global maker and supplier of premium mixers such as tonic waters and sodas for spirits, exporting to 30 countries throughout the Asia- Pacific region, the United States, Europe and the Middle East.

Last year East Imperial partnered with Air New Zealand to serve craft drinks, using products made in New Zealand, on its flights. In recent years the company has found itself running out of cash, relying on outside financing, securing loans and raking up debt to fund its operations, following a challenging period navigating disruption from the Covid-19 pandemic.

Despite winning multiple awards and being sold in luxury bars and hotels, including the Ritz-Carlton, East Imperial has never been profitable.

In a statement to the London Stock Exchange on Tuesday, East Imperial advised that it had ceased trading, and that its board would update shareholders with its next steps. “The board has resolved to seek the appointment of an administrator or a liquidator to the company,” East Imperial said in a market update.

East Imperial listed on the London Stock Exchange in 2021, and at that time was valued at £30 million. Despite being listed on the LSE, it has no presence in Britain, and is not listed on the NZX.

The company was due to post its annual financial figures for the 2023 financial year this month, with the expectation that revenues have fallen to £2.4m, compared to £3.2m in 2022. East Imperial secured a loan from INL Investment to strengthen its finances last year, then raised another £325k in January. Last Friday, East Imperial was issued an immediate redemption notice of £2m from INL Investment, connected to a loan agreed last year. It said it was unable to meet the liability.