Taxpayers and creditors look set to lose around £4m from the administration of the Black Sheep Brewery.

The Masham-based company was sold last summer to London investment firm Breal Capital for £5m, a move that safeguarded the brewery and its 150 staff.

As the Press reported last June, the former Black Sheep had debts topping £6m, noting HMRC and unsecured creditors were unlikely to be repaid.

The deal was a part of a pre-packaged sale and the appointment of administrators, which the company said was “essentially to give protection to the companies and prevent any person taking action against it”.


In 2022/23, Black Sheep reported losses of £1.6m compared to losses of £285,000 the year before. The losses were forecast to continue into 2024.

This stemmed from sales failing to recover from pre-pandemic levels of £19.4m in 2019, being £14.7m in the latest year.

However, pre-pack sales can be controversial as whilst they allow a business to carry on trading seamlessly, there is impact on creditors owed money.

Directors Charlene Lyons, Robert Theakston and Jonathan Theakston all became directors and minority shareholders in the new Black Sheep Brewing Company set up by Breal to continue the Black Sheep operation.

York Press: The Black Sheep shop in Masham

Three of the four local pubs the company ran, including the Three Legged Mare and the Last Drop Inn in York, were closed down and 1200 shareholders lost out as Black Sheep transformed from a publicly-listed company to a private limited company.

A Progress Report to Creditors from Administrator Kristian Shuttleworth of Birmingham-based Teneo Financial Advisory has now been published.

The report confirms the £5m purchase of May 23 by Breal and says since then, all the freehold property of the former brewery company has been sold for £2.625m. Stock and other assets have also been sold.

Breal also paid £325,000 for intellectual property and it bought debts of £1.6m in the deal.

The report also noted Black Sheep took out a £3.125m Coronavirus Business Interruption Loan Scheme (CBILS) and borrowed a further £1.6m from the Recovery Loan Scheme (RLS) initiative.

York Press: CEO Charlene Lyons

At the time of administration, £2.5m of the CBILS loan and all £1.6m of the RLS loan remained outstanding. But the report says £2.26m has now been repaid towards the loans from lender Close – leaving £1.84m outstanding.

These loans are backed by the Government, meaning 80 per cent of the outstanding CBILS debt and 70 per cent of the RLS loan will be covered by the government.

The report also notes £135,000 owed to HMRC in connection to the retail (pubs) side of the business will not be repaid. However, some repayment of £1.2m owed to HMRC from the brewing side is expected, but the amount has yet to be confirmed.

In addition, unsecured creditors owed more than £1.5m have been told it is ‘unlikely’ they will receive any of their money back. This includes 40 owed £1.4m by the brewery side and 27 owed £117,000 by the retail division.

A company called Dewscope, which provided £500,000 in loan notes last January, will also see no return.

However, the report says some money has been repaid.

Close, which was owed £6.3m including the Covid loans, has had £4.46m returned.

York Press: Packing the bottles during lockdown

An outstanding £1.5m asset finance arrangement with Lombard concerning bottling and packaging equipment is not expected to be adversely affected by the takeover.

Teneo’s report also noted its own costs in handling the administration. These were made up of £421,668 for 519 hours of time dealing with the brewery and £241,570 for 228 hours handing the retail side.

The Press approached CEO Charlene Lyons about the administration and the unpaid debts but she was unavailable for comment.

However, when the debts were first reported on last June, she commented: “The Breal Group acquired the assets, out of administration, to secure the business for the long-term, and this has saved the jobs, and futures of the people that worked there. Black Sheep is a significant employer within the town of Masham, this deal has prevented, what could have been a local employment catastrophe.”