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RFG's do-or-die $160 million rescue package

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As Retail Food Group battles multiple regulatory investigations, including one launched on July 9, it has unveiled a do-or-die rescue package at a whopping five times its market value.

The proposal includes a highly dilutive $160 million equity raising which will be used to pay down some of its $260 million in debt due for refinancing later this month.

In return, the banks have agreed to take a $71.8 million haircut, provide a new $75.5 million loan facility and extend existing facilities to February next year. But this is conditional on a successful equity raising.

Donut King is owned by Retail Food GroupCredit:Jessica Shapiro

The pitch to investors is that the recapitalisation will give Retail Food Group (RFG) a second chance.

But RFG isn’t for the faint-hearted. This is a company that has been dogged by scandals and controversies. It is a company known for keeping investors in the dark.

Its equity raising is no exception. Investors are being offered a heavily discounted 10 cents a share offer to the 17¢ it traded at before going into a trading halt.

Interestingly in its 52-page presentation released to the ASX on Friday, RFG doesn’t mention what happened to Hong Kong-backed Soliton Capital, which had been granted "limited exclusivity" to conduct due diligence for up to three months in relation to becoming a strategic investor.

The question is why didn’t Soliton do the deal? It had access to RFG’s books for weeks.

Back in July RFG blew off a series of local and global funds to work with Soliton without informing the market. As mysteriously as........

© The Age