CBA, high-profile investors and celebrities in line for BWX haircut

Instead, BMX’s stake in Go-To will be put up for sale. She also retained all operational control of Go-To, so the business is ring-fenced and won’t be affected by the financial woes of BWX. Go-To made sales of $36.8 million and was earnings positive in 2020 when BWX acquired its stake.

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The silver lining for Foster Blake must be that she is in pole position to buy the stake for what should be a bargain-basement price – a fraction of the $90 million she received for it.

Ironically it was BWX’s overly generous purchase of a stake in Go-To, which is said to be a significant factor in its demise – stretching the balance sheet.

More recently its operational problems were exacerbated by channel stuffing – a practice where unsold stock is held by distributors, like retailers.

Meanwhile, iron ore baron Andrew Forrest would be wishing he had never heard of BWX. His private company Tattarang poured more than $36 million into an 19.9 per cent equity investment – which is now considered worthless.

He isn’t the only one. Bennelong – an asset management group with $15 billion under management – has an even larger stake, while one of the country’s more astute investors David Paradice is also a significant shareholder through his firm Paradice Investment Management.

For Forrest, BWX was one of hundreds of investments and there is no suggestion Tattarang will be involved in buying assets from the BMX carcass.

(Forrest bought Australian outback luxury brand RM Williams for $190 million in 2020.)

How the process of sifting through the rubble of BWX plays out will now be largely under the control of the Commonwealth Bank, which initially lent the company around $100 million, but on Tuesday put in receivers KPMG.

CBA gave BWX a long lead over several months to allow a new management and board to engineer its own financial recovery. And while CBA is now controlling the Australian assets – including BWX’s manufacturing facility and a portfolio of brands – it looks unlikely it will claw back all the money it is owed.

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