Freedom Foods ‘exploring options’

Shares have not traded since they fell 21 per cent on an announcement in June that chief executive Rory Macleod was on leave.

Freedom Foods is expected to tap shareholders to raise at least $100m. It comes after DataRoom revealedon Sunday that advisory firm Moelis has been drafted in to offer assistance to Freedom Foods following the shock departure of top executives and the writing down of stock.

The capital raising would likely involve the Perich family securing a larger stake in the food processor, which is best known for soy and dairy products, lifting their interest from the 54 per cent level to offer support, given it is said that they are prepared to back the company.

However, it may not occur for some time, as adviser PwC continues to carry out work to determine the exact financial position of the business.

There is talk that similar matters have come to PwC’s attention to the writedowns related to out-of-date stock dating back to 2017 that was earlier disclosed to the market.

Apparently, various options are being explored by Freedom Foods advisers. Its shares have not traded since they fell 21 per cent on an announcement in June that chief executive Rory Macleod was on leave.

It later requested a 14-day trading halt as it “considers its financial position”.

Chairman Perry Gunner said earlier that Freedom Foods revised the writedown of its inventory from $25m to $35m to reflect provisioning for obsolete and out-of-date stock and product withdrawals, bringing total stock writedowns to $60m.

Mr Gunner said the issue was identified as stock was moved from five external warehouses to the company’s own facilities.

Mr Macleod has resigned from the company, which has also terminated 61 positions, resulting in 41 redundancies.

CFO Campbell Nicholas has also left the group.

Citi analysts had earlier said that the company’s net plant and equipment was worth $589m.