Freedom Foods hires Moelis as restructuring looms

Rory Macleod went on leave in June and has since resigned as Freedom Foods CEO.

Freedom Foods has hired advisory firm Moelis following the shock departure of top executives and the writing down of stock.

The company’s shares have not traded since the company’s share price dived more than 21 per cent when it told the market 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said earlier it revised the writedown of its inventory from $25m to $35m, to reflect provisioning for obsolete and out-of-date stock and product withdrawals, bringing total stock writedowns to $60m.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 it identified the issue as it moved stock from five external warehouses to its own facilities.

Mr Macleod has since resigned from the company.

The company has also terminated 61 positions, resulting in 41 redundancies.

Earlier, it was thought the company would be forced into an equity raising, but with Moelis now involved, it may suggest a restructuring could happen.

The troubled $831m dairy and cereal provider is already working with PwC and Ashurst.

It told the market that the writedowns related to out-of-date stock dating back to 2017 and was reviewing its operations.

A challenge for Freedom Foods is that it needs to buy contracted milk from farmers before it knows customer demand.

The saving grace for its investors, including dairy billionaire Tony Perich with about 54 per cent of the company, is that its dairy factory at Shepparton and its Ingleburn factory — where plant-based products are produced — are valuable and could be sold following an internal review.

One idea is for the company to split the business in two and sell off the plant-based operations, which would include the Ingleburn factory.

Citi analysts said in a research note that Freedom Foods had net plant and equipment of $589m.

Chief financial officer Campbell Nicholas has also left the group.