RFG defends disclosure

RETAIL Food Group has defended how it disclosed its receipt of a $160 million recapitalisation proposal from a Hong Kong investment firm, saying it didn’t consider the non-binding proposal to be price-sensitive.

On Monday, the Gloria Jean’s and Donut King franchisor responded to a price query from the ASX by saying it didn’t know of any undisclosed information that could explain the 57 per cent rise in its share price since Friday.

But the next day RFG confirmed a media report that it was in “advanced” discussions with Soliton Capital Partners to refinance the company and pay down its $260 million debt. It also said it was in advanced discussions related to the sale of one of its non-core assets, but there was no guarantee that agreement could be reached.

Corporate regulator ASIC said on Wednesday it would review whether RFG breached ASX’s continuous disclosure policies, which require listed companies to immediately announce information that might materially affect their share price, and the ASX also sent RFG another “please explain” email.

In responding to the ASX, RFG said it didn’t think Soliton’s non-binding proposal “to be information that a reasonable person would expect to have a material effect on the price or value of its securities”.

RFG noted it had previously announced to the market it was exploring a range of options to reduce debt, including asset sales and equity funding methods.

“Given the indicative and non-binding nature of the proposal received from Soliton Capital Partners, in RFG’s view, there is no new material information contained in the information. Rather the information provides colour on the progress of discussions on debt reduction options being explored by RFG.”

RFG noted that its share price didn’t really move following its disclosure of the Soliton proposal, which is still subject to detailed due diligence.