FOOD CHAIN IS HEALTHIER BUT NOT HEALTHY ENOUGH, SAYS ASX

EMBATTLED fast-food chain Oliver’s Real Food has until February 27 to prove its business is financially secure or lose a long-running battle to have its shares reinstated to trade on the ASX.

The health foods chain – which was forced to trim its store footprint and close seven restaurants in the wake of the Covid-19 pandemic – failed on Tuesday in its latest attempt to reinstate its shares following suspension by the ASX in February 2021 due to concerns about working capital.

The company told investors that a request from the Oliver’s board in November for the reinstatement of shares was rejected by the ASX, which cited ongoing financial concerns.

Tuesday’s rejection was the latest blow for the company, which in 2021 launched a $4m cost-cutting program and posted a $11.7m net loss after tax for the year ended June 30, 2022.

After repeatedly tapping its lenders for support, Oliver’s in November launched its latest debt restructuring plan – which remains subject to shareholder approval this month – to cut total debt by $1.5m to $9.3m and unlock liquidity.

Oliver’s said the ASX would “likely” be prepared to reinstate its securities if, before February 27, its first half results for the 2023 financial year show positive operating cashflow and an unmodified audit report.

“We can report that the ASX did note our very recent positive trading performance, the proposed debt restructure – subject to shareholder approval – and our positive operating cashflow in two of the past three months,” the company noted.

However, the ASX noted the factors were not “sufficient to warrant reinstatement”. The company must also get an independent expert’s report confirming its working capital and financial condition are sufficient it to carry out its objectives in the year following the reinstatement of its shares.