Enviro-brewers Broo, who have plans for a $100 million brewery, museum and entertainment complex on a 15-hectare site in the Ballarat West Employment Zone (BWEZ), had a temporary halt placed on trading in company shares after an unexplained spike in value on Monday.
The Australian Stock Exchange (ASX) placed a pause on trading in Broo Ltd (listed as BEE on the ASX) shares after the price rose from .027 cents per share on February 11 to a high of .071 cents per share on February 18. The price settled at .065 cents yesterday afternoon.
The ASX also noted a significant increase in the volume of Broo Ltd securities traded, with 430,000 shares traded on Friday February 15 and a further 1,614,650 on Monday February 18.
After the rise in value and trade volume, ASX Melbourne principal adviser for listings and compliance Kate Kidson issued a notice to Broo Ltd, asking:
‘Is BEE (Broo Ltd) aware of any information concerning it that has not been announced to the market which, if known to some in the market, could explain the recent trading in its securities?’
The ASX requested that unless there were extenuating circumstances requiring confidentiality, Broo should issue a statement regarding the unexpected trade shifts or expect to have trade in their shares suspended.
Company secretary Justyn Stedwell responded in a statement to the ASX:
‘The Company is not aware of any information that has not been announced to the market which, if known to some in the market, could explain the recent trading in its securities’; and
‘The Company does not have any other explanation of the recent trading in its securities.’
These conditions indicate a significant or material uncertainty about the consolidated entity’s ability to continue as a going concern.ShineWing Australia auditors
A spokesperson for the ASX told The Courier that, given the company’s explanation, trading has been allowed to resume. However, the spokesperson said the onus was upon the company and not the ASX to provide factual and correct information, and a failure to provide information or to provide misleading information by a company would be referred to the Australian Securities and Investments Commission (ASIC) and could be subject to heavy penalties.
Broo first listed on October 14, 2016 with shares at 20c. They rose to a peak of 61c the following week, although the company has consistently operated at a loss.
Reports of a major distribution deal in China have not seen the share price recover strongly, and then-company auditors ShineWing Australia said the 'conditions indicate a significant or material uncertainty about the consolidated entity’s ability to continue as a going concern'.
ShineWing Australia has since been replaced as the company's auditor following their refusal to a request by Broo to lower their audit price.
Broo came to prominence in Ballarat in February 2017 after announcing plans to build an environmentally-friendly $100 million brewery complex, powered by energy generated onsite through solar panels, wind turbines, biogas and aquifer-sourced water, on a 15-hectare site in the BWEZ zone.
The plans expanded to include a museum, a 10,000-seat event venue, viewing platform with zipline, restaurants and bars and an ‘energy education centre’. In April 2017 Broo announced plans to open a Broo Burger Bar in the newly-constructed Delacombe Town Centre.
Those plans were due to commence in November 2017 and were subsequently dropped in November 2018, with the company saying it had 'concluded recently that its operations focusing in the Ballarat precinct are better served by expansion of the proposed development at BWEZ'.
In a statement to The Courier, Ballarat City Council confirmed that no planning application for the BWEZ site is currently in existence. Tenancies for BWEZ are controlled by Development Victoria.
The Courier placed several calls to Broo Ltd but received no response.