Rush Factory faces bankruptcy as Street Food Group withdraws merger in Helsinki

Rush Factory, the smallest company listed on the Helsinki Stock Exchange, is facing deepening challenges. Two weeks ago, Street Food Group, founded by celebrity chef Akseli Herlevi, withdrew from a preliminary agreement for a merger with Rush Factory. Known for its color obstacle race events, Rush Factory has been struggling with serious financial issues for some time. On Wednesday, pension insurance company Ilmarinen filed for the company’s bankruptcy.

The merger conditions between Street Food Group and Rush Factory included the sale of Rush Factory’s hall property located in Masku. On Friday morning, Rush Factory announced that it could not finalize the hall sale quickly enough to address its critical situation. The company stated in a stock exchange announcement, “The companies have amicably agreed to terminate the preliminary agreement, and Rush Factory will continue to actively pursue other financing negotiations.”

Challenges persist both in Finland and abroad. Rush Factory’s hall in Masku has a debt exceeding half a million euros that was due last Saturday. The company is attempting to sell the hall for 1.3 million euros to settle the debt. Additionally, there is an ongoing dispute with the Masku municipality regarding construction work, with the municipality threatening a 170,000-euro penalty if required tasks are not completed.

Rush Factory’s foreign subsidiaries in Germany and the UK are also in trouble. The German branch faces insolvency threats due to a payment processor’s 120-day delay on ticket revenue, leading to the cancellation of events in Germany for the remainder of the year. In May, the company announced the cancellation of events in the UK, and the UK subsidiary may also be heading toward bankruptcy. On Tuesday, trading of Rush Factory shares was suspended after the bankruptcy news broke, with the stock having declined by 91 percent from its 2018 listing price prior to the suspension.