Shaw and Partners is pleased to be appointed as Joint Lead Manager to the proposed capital raising by Retail Food Group Limited (ASX.RFG).

The Company is seeking to raise approximately A$47.4 million by way of a Placement of 311.5m new ordinary fully paid shares issued at A$0.08 to raise approximately $24.9m, along with a $2.5m SPP (with the Company reserving the right to accept oversubscriptions).

The offer price of A$0.08 represents a 12.1% discount to the last close of A$0.091 on 28 February 2023, a 8.9% discount to the Wednesday 1 March 2023 VWAP of A$0.0878 and a 19.7% discount to the 30-day VWAP of A$0.0996 up to and including 1 March 2023.

As part of the capital raising, RFG has also signed a binding term sheet to secure a new $20m debt facility from Washington H. Soul Pattinson and Company Limited. Funds raised from the Placement and New Debt facility will be used to repay and extinguish existing bank facilities, fund core business and inorganic growth opportunities and provide working capital for the Company. The capital raising resets and strengthens the balance sheet, reducing leverage, improving free cash flow and providing the flexibility to pursue growth opportunities.

The capital raising follows RFG posting a strong group wide 1H23 result earlier in the week, delivering growth on 1H22 and pre-COVID period (1H19) with positive contribution across all divisions and all brands enjoying positive same store sales (SSS) growth. RFG generated 1H23 Underlying EBITDA of $13.7m (up 47.4% vs PCP) with FY23 guidance expected at the mid to upper end of the original $26.0m – $29.0m range. Positive momentum has continued in the first 6 weeks of 2H23 with network sales, SSS growth and customer count growth all positive, reflecting the resilient and diversified nature of RFG’s brand system which provides platform for growth in FY23 and beyond.

Congratulations to Peter George, Matthew Marshall and the whole RFG team on a fantastic Half Year result and we look forward to further updates as RFG continues to perform strongly and explore core business and inorganic growth opportunities.

The offer is available to Australian Sophisticated and Professional Investors only.

For more information please contact your Shaw and Partners Advisers.