Freedom Foodsextends trading halt until January Carrie...

Freedom Foodsextends trading halt until January

Carrie LaFrenzSenior reporter

Dec 16, 2020 – 11.56am

FreedomFoods Group has again extended its trading suspension after failing to reachterms with a new possible investor Oaktree Capital Management ahead of Christmas.

Thetroubled UHT, cereals and snacks maker gave a full year 2020 update on November30, flagging a capital raising of up to $280 million, over $590 million inasset write-downs and restating several years' worth of accounts.

Itsaid at the time that it expected to announce its recapitalisation bymid-December.

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Themilk-related business at Freedom Foods may not be a viable concern.

FreedomFoods has made "good progress" and "remains in advanceddiscussions with a new investor" to support the operational turnaround ofthe business, but is now likely to update on the capital raising in January,the company said in a statement on Wednesday.

Ithas been in exclusive talks with global hedge fund Oaktree for nearly a month.The terms reached with Oaktree could involve a number of board seats for thefund, and stipulate that no dividends will be paid for the term of the bondsuntil conversion, which could be up to five years.

FreedomFoods said it further simplified its business by assessing options, including asale, of its cereal and snacks division.

The$834 million company’s shares will remain in voluntary suspension until afterit has announced its proposed recapitalisation. Shares last traded over fivemonths ago at $3.01.

FreedomFoods also said new chief financial officer Josée Lemoine will push out herstart date for a second time to whenever the stock is reinstated to trade. MsLemoine was due to take up her role on November 17 but pushed this out tomid-December.

Thecompany, along with its auditor, Deloitte, is facing a series of issuesafter being slapped with an investor class action by Slater andGordon in the Supreme Court of Victoria that alleges it engaged in significantbreaches of its continuous disclosure obligations and misleading and deceptiveconduct.

Italleges Deloitte failed in its duties in signing off on Freedom Foods’ accountseach financial year between 2014 and the first half of 2020.

FreedomFoods, which is backed by wealthy dairy farmer Tony Perich and his family whohold a 52.5 per cent stake, also faces litigation in California launched by one of its keycustomers that supplies Almond Breeze milk products.

More to come