INDEPENDENT supermarket group FoodWorks has halted its takeover of 45 Coles stores after auditors raised worries over whether FoodWorks is a going concern.

The 745-strong chain agreed to buy the underperforming stores in August last year, using up to $46.875 million in finance supplied by Coles parent Wesfarmers, and has so far taken over 22 stores.

But digesting the stores has been harder than expected, with the re-badged stores racking up a trading loss of $4.6 million by the end of 2009.

The poor performance of the stores, the only ones FoodWorks owns outright, pushed the company to a half-year loss of $3.7 million and prompted auditors to warn of a "material uncertainty" whether the group is a going concern.

"The store transfer program has been halted to allow FoodWorks to improve the performance of the stores already transferred," FoodWorks chief executive Peter Noble said.

FoodWorks' half-year results, filed with the National Stock Exchange (for small-to-medium sized companies) earlier this week, show Wesfarmers has given the company some relief on the loan. 

It is believed Wesfarmers has given FoodWorks extra time to repay the loan.

Read more in The Courier-Mail.