Silver Chef to sell off business for $18m

Troubled Brisbane hospitality equipment financing company Silver Chef has agreed to sell most of its business to Next Capital after the Sydney firm raised its price to $18.25 million, from $15 million.

All 300 employees of Silver Chef, other than the directors, will transfer to the hospitality group as part of the transaction.

Silver Chef will be left with its GoGetta rent-to-buy equipment financing business, which it is winding down, and which the Next Capital-owned hospitality business will run for Silver Chef Limited for up to two years.

Most of Silver Chef's debt will be novated to the hospitality group, and the rest will be repaid when the transaction is completed, so Silver Chef will have no material debt.

Silver Chef said last week that once the Next Capital proposal had been completed, "the board will evaluate the optimal means to distribute surplus capital to all of its shareholders.

"All shareholders will be entitled to distributions of such proceeds."

The company would also be left with $29.4 million in franking credits and $4.3 million in tax losses.

Silver Chef has been in breach of its debt covenants in since mid-2018 and was at risk of insolvency.

It declared an $18.6 million loss for the 12 months to June 30 on $235.4 million of revenue.

Silver Chef had $293 million in loans outstanding as of June 30, with $76.6 million in cash and cash equivalents.

The scheme needs approval from the Foreign Investment Review Board and from Silver Chef shareholders at a meeting tentatively set for November 4.

Fund manager Blue Stamp Company, which owns 19.99 per cent of Silver Chef and defeated a past attempt to sell the entire company to Next Capital, intends to vote for the transaction, Silver Chef said.

So does Silver Chef chairman Alan English, who owns 23 per cent of the company.

Silver Chef shares were down two cents at 1149 AEST, to 67 cents.

Austrlaian Associated PressBack to Breaking News

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