Street Food Group and Rush Factory enter merger talks amid financial challenges in Masku

The smallest company by market value on the Helsinki Stock Exchange, Street Food Group, founded by celebrity chef Akseli Herlevi, has signed a preliminary agreement for a merger with event company Rush Factory. Under the agreement, Rush Factory will acquire the entire shareholding of Street Food Group through a share exchange; however, certain conditions must be met for the transaction to proceed.

One of the conditions involves the sale of a industrial property owned by Rush Factory in Masku, which must be sold for at least €750,000. There has been ongoing disagreement between Rush Factory and the municipality of Masku regarding the fulfillment of construction obligations related to the property, with the municipality threatening a €170,000 penalty. Currently, the property is listed for sale at €1.3 million. Rush Factory is in urgent need to sell the property as a €530,000 debt is due for payment this week.

An external review of the construction work on the property is currently underway, and the findings will be addressed by the Masku municipal council next week. Another requirement for the merger is that Street Food Group must conduct a paid share issue to raise at least €300,000 in new capital. Should the merger proceed, Rush Factory plans to issue over nine million new shares, reducing the ownership stake of existing shareholders.

Rush Factory is known for its color obstacle races and plans to shift its focus to food events in Finland and, eventually, internationally. However, the company has faced a series of challenges, including the COVID-19 pandemic. Recently, financial difficulties have emerged with its German subsidiary, leading to the cancellation of events scheduled for the rest of the year in Germany. Following the announcement of the merger, Rush Factory’s stock price experienced a positive response in the market on Monday, despite a decline of over 92% since its initial public offering in 2018.