Crust Pizza for sale

Re­tail Food Group to pay down debt with as­set sales

Geelong Advertiser - - BUSINESS BEAT - ALEX DRUCE

RE­TAIL Food group has con­firmed it is con­sid­er­ing sell­ing as­sets to pay down debt, but says the $100 mil­lion price tag me­dia re­ports have slapped on its Crust Pizza em­pire is too high.

The Aus­tralian Fi­nan­cial Re­view yes­ter­day re­ported PAG Asia Cap­i­tal was be­lieved to be in pole po­si­tion to buy Crust Piz­zas from Re­tail Food Group at auc­tion.

In a re­lease to the ASX, the Glo­ria Jeans and Donut King op­er­a­tor con­firmed it was in­ves­ti­gat­ing pos­si­ble sales to re­duce debt but said no bind­ing agree­ment had been reached for any of its as­sets.

Re­tail Food Group also said the $100 mil­lion price for Crust quoted in the Fi­nan­cial Re­view was above its ex­pec­ta­tions.

“In­so­far as an amount for the sale of Crust Gourmet Piz­zas is spec­u­lated in the AFR ar­ti­cle ($100 mil­lion), that amount ex­ceeds RFG’s ex­pec­ta­tions as to the sale price for that as­set if it was to be sold as a part of that process,” the com­pany said in a state­ment.

Shares in Re­tail Food Group spiked by more than 20 per cent be­fore the com­pany an­nounced a tem­po­rary pause in trad­ing to ad­dress the spec­u­la­tion.

The com­pany was trad­ing 13.56 per cent higher at 33.5 cents in mid­ses­sion trad­ing yes­ter­day.

In Au­gust Re­tail Food Group ex­panded its store clo­sure pro­gram after it slumped to a $306.7 mil­lion full-year loss, the lat­est in a string of fi­nan­cial stum­bles fol­low­ing ac­cu­sa­tions it was badly treat­ing fran­chisees.

The com­pany said it plans to close 250 do­mes­tic stores – up from the pre­vi­ously an­nounced 200, across sev­eral brands – by the end of the 2019 fi­nan­cial year.

The com­pany was re­port­edly $258.9 mil­lion in debt at June 30. In Oc­to­ber Re­tail Food Group ap­pointed Peter Ge­orge as chair­man to re­place the re­tired Colin Archer.

AAP

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