- Retail Food Group announced a $160 million plan today to boost company equity
- $150 million will be raised through a placement, with another $10 million to be raised through a share purchase plan — both priced at 10 cents per share
- Retail Food Group operates multiple franchises including Brumby’s, Donut King, and Gloria Jean’s Coffee
- The company is currently in a trading halt, with shares sitting still at 17 cents each
Retail Food Group (RFG) will be looking towards investors to help boost the company’s equity.
In a media statement to the Aussie share market today, the company said it will seek to raise $150 million through a placement, and an additional $10 million through a share purchase plan.
The global food and beverage company, known for operating Brumby’s, Donut King, Gloria Jean’s Coffee, and Michel’s Patisserie, assigned three brokers to the deal.
These brokers are Petra Capital, Shaw and Partners, and Aitken Murray Capital Partners.
Both the share purchase plan and placement will be priced at 10 cents per share: a discount to the company’s last close of 17 cents per share.
RFG said there is a possibility to increase the purchase plan to $20 million.
Proceeds of the equity raising will be used to repay debt, improve the company’s balance sheet, and provide additional working capital.
The company entered a trading halt before today’s open.
RFG also released its guidance for the 2020 financial year’s underlying earnings before interest — at a range of $42 million to $46 million.
Retail Food Group’s shares are currently in a trading halt. The company’s market cap is valued at $31.06 million.
Recently, the company emerged from a historic low, trading for 12 cents per share in June.
At the start of 2017, RFG’s shares were priced at $7 apiece. Between then and now, the company faced allegations of mistreatment of its franchisees.
A recent parliamentary inquiry into the company claimed its management style was “unethical”.
During the 2019 financial year, RFG battled through a $150 million loss.