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- Retail Food Group (RFG) is set to handball its Dairy Country business to Fonterra Brands for $19.23 million
- The global food and beverage company, headquartered in Queensland, today said the cheese producer was no longer aligned with the company’s strategy
- Retail Foods will use the sale’s proceeds to pay off Dairy Country’s working capital facility — worth around $13.7 million — and pay down a portion of the group’s extra debt
- Looking ahead, the consumer stock says the cash injection will also prepare it to face challenges in the retail market in the wake of COVID-19
- While RFG and Fonterra cross the t’s and dot the i’s on the deal paperwork, there are still some conditions to be satisfied — including the all-important foreign investment review board (FIRB) approval
- Nevertheless, the group expects to hit settlement next month
- Retail Food Group shares are up 4.69 per cent, trading for 6.7 cents per share
Retail Food Group (RFG) is set to handball its Dairy Country business to Fonterra Brands for $19.23 million.
The global food and beverage company, headquartered in Queensland, today said the cheese producer was no longer aligned with the company’s strategy.
“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,” RFG Executive Chairman Peter George commented.
“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,” he continued.
Retail Foods will use the sale’s proceeds to pay off Dairy Country’s working capital facility — worth around $13.7 million — and pay down a portion of the group’s extra debt.
Looking ahead, the consumer stock says the cash injection will also prepare it to face challenges in the retail market in the wake of COVID-19.
While RFG and Fonterra cross the t’s and dot the i’s on the deal paperwork, there are still some conditions to be satisfied — including the all-important foreign investment review board (FIRB) approval.
Nevertheless, the group expects to hit settlement next month.
Retail Food Group shares are up 4.69 per cent, trading for 6.7 cents per share at 1:53 pm AEST.
