LEGAL | Staff Reporter, Australia

Retail Food Group confirms talks with Soliton Capital Partners

The investment fund proposed to provide approximately $160 million.

ASX-listed Retail Food Group, the owner and operator of the Michel's Patisserie, Donut King and Crust brands, has advised the market that it has received an “indicative non-binding proposal” from Soliton Capital Partners to provide approximately $160 million to recapitalise the franchisor, following questions raised about the recent rise of its share price.

“Further to previous announcements...that RFG is exploring a range of debt reduction options, including equity and other debt funding proposals, RFG advises that it has received an indicative non-binding proposal from Soliton Capital Partners, an investment fund associated with SSG Capital Management, to provide approximately $160 million to recapitalise the Company,” it said in a statement.

This was the Queensland-based franchisor’s direct response to earlier reports from The Age and the Sydney Morning Herald, which revealed that RFG and KordaMentha’s restructuring arm 333 Capital have been holding talks “with a number of funds, local and global, about a possible debt and equity rescue package”.

The funds, according to the reports, were recently told their proposals were no longer being considered as it was now “dealing exclusively”.

Referencing an earlier announcement, RFG said that discussions related to the proposal are “advanced”.

“However, the indicative proposal remains subject to a number of conditions precedent, including the completion of detailed due diligence, and there is no guarantee that any formal agreement will be reached,” the company said.

“RFG has granted Soliton Capital Partners limited exclusivity while discussions continue and further due diligence is being undertaken. Any formal recapitalisation proposal which might be concluded is expected to include debt and equity/equity-linked components, and may be dilutive to existing shareholders.”

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