Woolies deal emerges as possible Pie Face saviour, administrators search for a buyer
Thursday, December 4, 2014/
Could a supply deal with supermarket giant Woolworths save collapsed pie retailer Pie Face?
Less than two weeks after Pie Face called in administrators Jirsch Sutherland, the company is trialling selling its pies in the frozen food aisles of 15 Woolworths supermarkets in Sydney.
A spokesperson for Woolworths told SmartCompany this morning the two companies will decide whether to extend the trials to the entire Woolworths network after they “see how it goes”.
But it is possible a buyer for the chain could be found before then.
SmartCompany understands offers for the company would be considered by the administrators.
Jirsch Sutherland is also canvassing options with financers to take over the debt of secured creditor Macquarie Capital. Fairfax reports the debt is secured over shares in parent company Pie Face Holdings, $3.5 million in cash and the company’s shares in the US arm of the business, Pie Face Inc.
Ferrier Hodgson partners Steve Sherman and Peter Gothard have been appointed by Macquarie as receivers over the lender’s debts.
Macquarie Capital is reportedly owed $4.2 million, while convertible note holders are owed $7.5 million and the Tax Office is owed $7 million.
A meeting of creditors was held in Sydney yesterday, with franchisees who are also creditors invited to attend. Franchisees who owe the parent company money, however, did not participate in the meeting.
Creditors are expected to convene again at the end of the month
The store footprint of Pie Face has already been reduced to around 50 stores, following the closure of 20 outlets last week.
While it is unknown if there will be any further store closures, administrator Sule Arnautovic told SmartCompany last week “the balance of company-owned stores will likely continue if the group’s restructure is approved by the group’s creditors”.
In further troubling news for Pie Face, this week it was revealed a New York-based building company has launched legal proceedings against the US arm of the company, which is alleged wrongfully terminated a contract and failed to pay bills of up to $US360,000 ($428,443).
SmartCompany contacted Pie Face but did not receive a response prior to publication.
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