Retail Food Group (ASX:RFG) has agreed to sell its subsidiary Dairy Country Pty Ltd, to Fonterra Brands for around $19.2 million.
It’s executive chairman Peter George says that the subsidiary 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”.
This aligns with the company’s recent restructure and its decision to exit from its foodservice and manufacturing pursuits.
The proceeds will be used to pay down the subsidiary’s $13.7 million debt facility and to free up cashflow.
The agreement is subject to a number of conditions, including FIRB approval and is expected to settle by October.
Shares in Retail Food Group (ASX:RFG) are steady at 6 cents.