Franchise group to cash in on Crust chain
RETAIL Food Group is looking to sell its Crust Gourmet Pizza chain but the embattled franchise operator has hosed down expectations about what price it will achieve.
The group, which also owns Michel’s Patisserie, Gloria Jeans, Brumby’s Bakery and Donut King, said it was looking to sell assets in order to lower a $260 million debt pile.
The listed franchise giant entered a trading halt yesterday after media reports suggested it was working on a deal to sell Crust for $100 million. Crust is the nation’s third-largest pizza chain with more than 150 outlets across Australia. Retail Food confirmed it was considering selling the chain but denied a sale could raise $100 million.
Shares in the group had surged by more than 20 per cent in early trade ahead of it going into a trading halt.
“The company confirms it will seek to reduce its debt by various means including the investigation of the possible sale of assets,” it said in a statement lodged with the Australian Securities Exchange.
“Insofar as an amount for the sale of Crust Gourmet Pizza is speculated … 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.”