Domino's begins Norway exit
The company is selling the estate to its Norwegian minority shareholders.
Domino’s has announced its decision to sell 71% of its stake in its Norway business to their minority shareholders in the country.
Earlier, Domino’s revealed its plan to sell its international businesses, especially focusing on its Norway operations which has incurred “significant” operating losses. In 2018, the estate lost £6.6 million.
“This transaction is positive for all stakeholders and also provides [the company] with a clean exit from Norway following operating losses and high levels of capital expenditure over a number of years. The new owners have exciting plans for the business and importantly, the Domino's brand will retain its presence in Norway,” CEO David Wild said in a recent announcement.
In return, the UK-based company will gain complete control over Domino’s Sweden from the Norwegian shareholders Pizza Holding AS and EYJA Fjarfestingafelag III EHF.
"[W]e will focus on progressing transactions for our businesses in Sweden, Switzerland and Iceland. We are focused on securing the best possible terms for shareholders and are working closely with Domino's International throughout," Wild said.
The pizza company will be transferring £30 million worth of debt and a £500,000 marketing campaign fund to the shareholders. It will also fund future liabilities, including cost of closures, expected to add up to £2.9m (NOK 34.0m).
Moreover, the company will retain £2 million (NOK 24.4m) of cash held within the business as of December 2019, which includes working capital and rent deposits.
The transaction, also supported by the pizza chain franchisor Domino's Pizza International, is subjected to shareholders’ approval, seen to close by the end of May 2020.
Further details about the sale will be disclosed in an upcoming circular.
