Sale of Dairy Country
Retail Food Group Limited (RFG, the Company or Group) today announced its entry into a Business
Sale Agreement (BSA) to dispose of the business and assets of its subsidiary, Dairy Country Pty Ltd,
to Fonterra Brands (Australia) Pty Ltd (Fonterra).
RFG Executive Chairman Peter George noted that the transaction affords RFG a number of benefits,
whilst Fonterra, a key Dairy Country business partner, was a natural buyer for the business.
“Dairy Country has represented a reliable past contributor to Group earnings, however, is no longer
considered an appropriate fit with RFG’s strategic intent to focus its resources on the Company’s core
retail food franchising and coffee businesses”.
“The transaction facilitates the Company’s exit from foodservice and manufacturing pursuits, providing
the Group with a less complex business model that enables RFG to dedicate its resources towards
driving positive outcomes for its franchisee community, and building value for its wholesale coffee
business following its FY20 restructure”.
“Net proceeds from the sale will be applied to the extinguishment of Dairy Country’s working capital
facility (c.$13.7m) and the further paydown of debt, freeing up future cash flows and providing RFG
additional scope and capacity to respond to the unique set of challenges and evolving retail landscape
attributable to COVID19 and its ongoing influence on trading conditions for the Company’s business
and franchise network”, he said.
The BSA provides for a sale price of $19.23m, subject to net working capital adjustments, and remains
subject to a number of conditions, including FIRB approval. The Company’s lenders have consented
to the transaction, and settlement is anticipated by October 2020.
This announcement has been authorised by the Board of Directors.
courtesy of Bell Direct
i do not hold this share