Heavy debt load to slice off the Crust
RETAIL Food Group is looking to sell its Crust pizza chain, but the embattled franchise operator has hosed down expectations about what price it would achieve.
The group, which also owns Michel’s Patisserie, Gloria Jeans, Brumby’s Bakery and Donut King, yesterday said it was preparing to sell assets in order to lower its $260 million debt pile.
The listed franchise giant entered a trading halt yesterday morning after media reports suggested it was working on a deal to sell Crust Gourmet Pizzas for $100 million.
Crust is the nation’s thirdlargest pizza chain and has more than 150 outlets.
Retail Food confirmed it was considering selling the chain, but poured cold water on the idea that 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, as previously announced, that it will be seeking 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 Pizzas 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.
“RFG will keep the market