Crust Pizza for sale
Retail Food Group to pay down debt with asset sales
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.