November 29, 2021

Cayman Islands’ lender may get Pie Face

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By BEN BUTLER From The Australian

A Cayman Islands lender linked to Pie Face director Bruce Wookey is considering taking over the troubled fast food chain by converting a $4 million debt into equity.

The fund, run by TCA Global Fund Management, where Mr Wookey is also a director, tipped the whole of Pie Face into receivership last month in a move that upset shareholders who thought only part of the group that ran 11 loss-making company-owned stores was to be shut down.

Shareholders complained to the Australian Securities & Investments Commission over Mr Wookey’s apparent conflict of interest and his failure to approach them for fresh capital before pulling the plug, but the corporate regulator declined to get involved.

At its peak, Pie Face had more than 70 stores, but after shutting the company-owned stores it is left with 29 currently trading in Australia.

However, sources close to Pie Face say what’s left makes an attractive target for TCA thanks to a burgeoning wholesale business, which includes a contract to supply baked goods to budget airline Jetstar, and a push into Japan.

Receiver Liam Bailey, of O’Brien Palmer, said TCA would decide whether to convert its debt into equity after considering bids to buy the business, due by the end of the month.

He said he and co-receiver Christopher Palmer had sent information memorandums to 16 potential buyers and seven parties were now conducting due diligence.

“One of the options that is on the table is that if the offers that are received are not significant enough for TCA to consider accepting, then TCA may consider restructuring the business and taking an equity share … and hoping to trade out and get a return on their investment in that way rather than through a sale,” he said.

He added that putting all four companies in the Pie Face group into receivership “was always going to need to occur to finalise a sale of the company”.

Mr Wookey’s position as both sole director of the Pie Face companies and a non-executive director of TCA was “not per se a conflict of interest, but it is a potential conflict of interest”, he said.

Mr Wookey did not answer questions about Pie Face and TCA, including whether he had a conflict of interest, and instead referred The Australian to two big Pie Face shareholders: Will Vicars’ funds management group Caledonia and Fat Prophets founder Angus Geddes.

Caledonia and Mr Geddes did not respond to requests for comment, but it is believed shareholders have been fighting TCA over a $2m repayment fee levied on top of interest on the loan of 18 per cent.

TCA’s Caymanian fund, TCA Global Credit Master Fund, became Pie Face’s secured lender in March 2014 by buying out previous financier Macquarie.

It appointed Mr Bailey and Christopher Palmer as receivers of Pie Face Pty Ltd, which ran the company-owned stores, in late November and then in early December extended their commission to cover Pie Face Holdings and Pie Face Franchising.

Mr Bailey and Mr Palmer were appointed receivers of Pie Face Australia Franchising by the Federal Court.

Pie Face also endured a month-long stint in administration in late 2014.

IMAGE: Pie Face is in receivership

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