Australian Arm of Prime Energy Drink Enters Voluntary Administration
Synopsis
The local company behind the influencer-backed beverage has entered voluntary administration, with reports suggesting it had only $85,000 remaining in the bank.
A Sydney-based prime beverage distributor has placed the fate of its local company under a cloud with its cash position and liabilities both shrinking, as it entered voluntary administration.
The company’s liabilities stood at $7.92 million at the end of last financial year, and cash held was just $84,855, according to ASIC figures.
Alice Fay Ruhe of The Ruhe Group was appointed voluntary administrator, with the first creditors meeting scheduled for July 17.
The administration comes following an application to wind up the company made by packaging supplier Orora Group in Federal Court, scheduled for July 31.
Financial pressures deepen
The latest financials show a sharp slide in the company’s financial performance in FY2024. The business suffered a net loss of $1.42 million, against a loss of $14.5 million in the previous year. Revenue dropped $31 million from a year earlier to $14.5 million.
Furthermore, inventory reduced substantially from the prior year’s $28.9 million to current $1.7 million after an inventory write down of $4.57 million.
The directors’ statement of financial position declared that the Australian operation would be unable to meet its obligations without financial assistance from its US parent company.
The administration is unfolding shortly after rapid growth of the Prime brand, launched in 2022 in major YouTube creators' channels such as Logan Paul and KSI and subsequently becoming established in Australian and several global markets like the United States, Canada, United Kingdom and New Zealand and South Africa.
Court action adds to uncertainty
Orora’s application to wind up the company in Federal Court, alleging an unpaid debt, is separate from the voluntary administration proceedings and is due to be heard later this month.
Australia's soft drink manufacturing industry is valued at approximately $5.7 billion, with the well-known multinational drink manufacturers holding the largest share of market revenue and new players competing in the growing market segment of sports and energy drinks.
The administrator will then investigate CBA’s financial situation and report the findings to creditors, as set out in the voluntary administration framework.
Source: Smart Company
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
