Retail Food Group has valued its Donut King, Crust and Pizza Capers brands at $87.3 million net
Retail Food Group’s share price continues to scrape new lows as the banks decide whether to grant new extensions to their loan agreements and the company reveals what its most valuable brands could sell for.
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RETAIL Food Group’s share price continues to scrape new lows daily as shareholders wait to find out whether the patience of the company’s lenders will be extended again.
Meanwhile RFG continues to negotiate the sale of its Donut King, Crust and Pizza Capers brands, which it has valued at $87.34 million after lease liabilities of $45.79 million.
Its share price has slipped more than 22 per cent since it reported an $111.1 million net loss for the first six months of the financial year, and the company confirmed it was negotiating the sale of its most valuable brands.
The price slid 12.5 per cent on Wednesday alone, dipping to 21c by market close, and inched back today, gaining 0.95 per cent to close at 21.2c.
The company has flagged improved earnings for the financial year after undertaking a daunting turnaround under new executive chairman Peter George, who joined in November.
HOW RFG BIT OFF MORE THAN IT COULD CHEW
RFG’s lenders, NAB and Westpac, are due test the financial covenants for the company’s loans on March 31.
However, in its half-year report RFG said its ongoing viability hinged on getting further waivers on testing for March, June and possibly September to complete its assets sales and other fundraising.
The company has said it is confident of retaining the support of the banks, and of securing the necessary funds.
The report said RFG not only had to pay down existing debt, but had to secure more loans or equity funding by October 31 to keep the company operating.
As at December 31, the group’s liabilities, including its $258.8 million in debt, exceeded its assets by $182 million.
Its market capitalisation was $38.74 million at market close yesterday.
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Despite a board restructure and some encouragement from franchise customers, RFG said its board and senior management were “acutely aware that the Group has not performed as it should”.
Revenue slipped 1.8 per cent to $192 million, and the company said “the Group’s current financial position is unsustainable”.
The company has shed two chairmen and a CEO in the first six months of FY2019, after losing its managing director suddenly in May.
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