Retail Food Group (RFG) suffered its worst dive in five-months this morning as the stock came out of a trading halt following a capital raising.
The food franchisor crashed 4.6% to $4.37 on news that it was offering shareholders new stock for $4.30 a pop to raise around $7 million.
The offering comes on the back of a “significantly oversubscribed” $53 million placement of new shares to institutional investors at the same price.
As highlighted in our article yesterday, the funds will be used for the aggressive store rollout of its pizza franchise and for acquisitions. I have updated my recommendation on the stock in the article.
Retail Food Group, which owns brands like Donut King, Brumby’s Bakeries and Michel’s Patisserie, is part of the Uncapped 100.