Beleaguered franchisor Retail Food Group issued a trading halt on Monday, January 14, amid speculation that the business is looking to offload a number of its assets, including Crust Pizza.
The Australian Financial Review reported on Monday that PAG Asia Capital was firming as the favourite to purchase the Crust brand at auction in a bid by RFG to reduce its crippling debt.
In a statement later released to the ASX however, the comapny revealed that no binding agreement had been made and that the $100m valuation of Crust put forward in the AFR story exceeded the franchisor’s expectations.
“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,” the statement read.
“That process is ongoing, although no formal binding agreement has been reached with any buyer at this stage in respect to any of RFG’s assets. Insofar as an amount for the sale of Crust Gourmet Pizzas is speculated in the AFR article, that amount exceeds RFG’s expectations as to the sale price for that assets if it was to be sold as a part of that process.”
The reports of a potential sale initially lifted RFG’s share price, which has suffered a sharp fall over the last 12 months, driven by the announcement of store closures following a $306.7 million full-year loss, allegations of misleading behaviour and a re-shuffle of its executive team.
In December, RFG CEO Richard Hinson stepped down after less than a year in the top job, putting recently announced chairman and turnaround specialist Peter George in charge of the ailing company.
Hinson had previously told investors that 2018 had been a “tough year”, insisting the company “start looking toward the future”.
As part of RFG’s continuous disclosure obligations, any sale of assets or steps taken to reduce its debt must be announced to the market.
Reporting by Dean Blake and Nick Hall.
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