Foods & Culinary

Freedom Foods Announces Recitalization, New CEO

Freedom Foods Recitalization Plan Revealed

Freedom Foods Recitalization Plan Revealed

Australia-based Freedom Foods Group has announced a recitalization of up to A $ 265 million ($ 203.3 million) as part of its turnaround strategy.

It was also announced that Michael Perich, who has been the company’s interim CEO since August, has held the position on a permanent basis with immediate effect.

Freedom Foods, which struggled with accounting, executive departures, and asset divestments for 18 months, said the refit will allow it “to essentially repay its bank debt and provide a flexible capital structure that further financial and operational Better turn it easier. ” the company”.

The capital increase includes an offer of unlisted, subordinated secured convertible bonds to eligible large investors of up to A $ 130 million and a commitment of A $ 200 million to subscribe for bonds secured by its majority shareholder Arrovest, the Perich family’s investment vehicle – an agreed cash injection in principle already in January.

Banks NAB and HSBC will provide the company with a new two-year facility of A $ 36 million and a two-year credit facility of up to A $ 50 million, depending on the total income from debt securities.

The recitalization is scheduled to be completed in May.

Genevieve Gregor, Chair of Freedom Foods, said, “This recitalization is an important step in the operational and financial turnaround for Freedom Foods Group.”

She added, “Operationally, we announced the sale of certain non-core assets and adopted a simplified business strategy to ensure we focus on the brands and products with the greatest potential in our dairy, food and vegetable drinks businesses.

“Our financial results for the first half, released last month, show that we are making good progress early on in reversing the trend.”

Commenting on the appointment of Perich’s new permanent CEO, Gregor said: “Since assuming the role of Interim CEO during a challenging time, Michael has brought much-needed stability and leadership to the company and its employees. He has been at the forefront of operational and financial management Improvements across the company and the board are pleased that he will permanently take on the role of driving the turnaround further. “

Earlier this month, Freedom Foods announced that the turnaround plan “is slowly gaining traction” after seeing sales increases and decreases in the first half of the fiscal year.

The company behind Australia’s own milk and Vital Strength protein powders saw sales increase 10% to A $ 317.3 million in the six months to the end of December.

In December, Freedom Foods agreed to sell its grain and snacks business to Australian snack maker The Arnott’s Group.

Freedom Foods’ previous fiscal year results have been adjusted following a Deloitte investigation into corporate accounting. The review, which also resulted in Freedom Foods financial accounts being adjusted for 2018 and 2019, followed last June’s news. The company investigated the possibility of fraudulent activity as a result of write-offs, charges that followed the departure of executives.

Trading in shares of the publicly traded company has been suspended since last June, but trading on the Australian Stock Exchange (ASX) resumed on Monday (March 22nd). In early trading, stocks in the diversified food company fell 94% to A $ 0.18 and had rallied to A $ 0.58 by the end of Tuesday.

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