Ann: Corporate Update, page-35

Current sentiment  indicates Freedom may be de- rated by the market but looking at the glass half full, the above announcement says :
1) The Periches will fully back whatever needs to be done at whatever cost to keep Freedom in business;
...... “In particular, the Company has been advised by the Perich family that it has its ongoing support for the Company’s development and capital requirements as they arise,” said Freedom Foods chairman Perry Gunner.”
and
2) Whilst the rug has now been lifted on all the dirt that was swept beneath, there is strong and increasing demand for some great products,  and this will be an important hedge that will take the company forward, ie;
... “We continue to see increasing demand and customer enquiry across our key brands and markets with an emphasis on dairy, nutritionals and plant beverages.”

3) As I read it the initial thoughts are that financially the  cost impact is now likely to be at least $60M or $62M  in terms of inventory write downs,  and bad debts will be higher too - possibly $10M, and the employee share plan will cost about $6M....  add some wriggle room and that’s $90M or worse?

... But Freedom is down about 31% since the negative  May 29 update with a current market cap of $831.39M.
On May 28 the market cap was around $1.236B?
I don’t do maths but does this mean the Market Cap has already been stripped of $404M?
ie could one take the viewthe financial losses already been fully factored in with an extra kick in the teeth of around $300M for good measure and shorting pleasure?

.... And the Banking Facilities section of the announcement says that - conveniently - Freedom recently..
.... “ restructured its syndicated and bi- lateral banking facilities ...... to increase short term liquidity limits by $100 million, while maintaining the existing overall indebtedness limit.
The amended facility provides a more flexible structure to accommodate changes in sales and inventory mix in the current environment, increased covenant headroom, as well as ongoing growth of the Company over the medium term. The Company is working closely with its banking partners and keeping them updated”

Regards clearing the decks of redundant staff and negligent management - this is great news?
And as far as the mystery ‘leave’ status of CEO, Rory Macleod goes, if he is the guy who sorted that new $100M new spare dollars maybe he did a good job?


As said the above is just a glass half full perspective and I would appreciate other people’s thoughts.

cheers