Cooks Global Foods plans to rejig ownership, raise funds to expand

Thursday 13th August 2015

Cooks Global Foods, the unprofitable company taking the Esquires Coffee Houses chain beyond Australasia, plans to raise more funds and rejig its shareholding to aid its expansion.

The Auckland based company plans to sell 35 million shares at 12.8 cents apiece to its Chinese joint venture partner Jiajiayue Group (JJY) and executive chairman Keith Jackson, raising a total of $9 million, and signalled plans for a further $9 million public share offering. As part of the plan, majority shareholders Stuart and Lewis Deeks, who originally acquired the Esquires franchise for this part of the world, will end their involvement with Cooks.

The capital raised will fund a five-year strategic growth plan for existing and new international markets to gain critical mass, Jackson said. Cooks has 22 stores in design or under construction as part of its roll out of the Esquires chain and aims to have 125 stores by the end of this financial year compared to 70 at the end of the 2015 year. JJY formed a joint venture with the company in 2013 to develop 30 Esquires outlets in China's Shandong province.

The rejig will see JJY and Jackson jointly acquire the Deeks' existing 40 percent stake in Cooks for 5 cents a share, or a total cost of $6.8 million. The Deeks will retain one million shares. Once the transaction is completed, JJY will hold 25 percent of Cooks while Jackson will control the largest shareholding, with about 35 percent. JJY will appoint a director to the board. JJY and Jackson may introduce further investors to fund the deals.

Cooks shares last traded at 12 cents on the NZ Alternative Index and have dropped 11 percent so far this year.

The transactions have conditions, including both parties signing formal documents, securing finance, and getting shareholder approval at the Cooks annual meeting in late September.

Cooks posted a $3.99 million loss in the year ending March 31, from a loss of $5.1 million a year earlier.

BusinessDesk.co.nz

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