Retail Food Group targets $160m in capital raising plan
More than a third of the proceeds will be used to pay off existing senior debt.
Retail Food Group has launched a capital raise to secure $150 million, confirming earlier reports about the franchisor pitching the equity raising to fund managers.
The franchisor behind Gloria Jean's, Donut King, and Michel's Patisserie said $118.5 million of proceeds from the offer will be used to pay of existing senior debt.
The company's lenders have also agreed to extinguish $71.8 million on receipt of the $118.5 million as part of the raise, and to provide a new $75.5 million term loan facility to refinance existing senior debt.
The capital raise is primarily made up of an institutional placement of approximately 1,500 million ordinary shares at $0.10 per share. RFG also plans to raise a further $10 million before costs by offering a share purchase plan at $0.10 per share.
RFG says the net proceeds of the equity raising will be used to “pay down debt and provide working capital to stabilise the business and support the Company’s turnaround plan.”
The company earlier reported a $149m net loss in FY19, having made previous attempts to divest some of its brands.
