Freedom Foods suspends ASX trading until October to complete investigation into stock losses
Freedom Foods has extended its trading suspension on the Australian Securities Exchange until the end of October to complete its stock-loss investigation.
FREEDOM Foods has extended its trading suspension on the Australian Securities Exchange until the end of October as it sorts out irregularities in its stock inventories and financial position.
The shares went into a trading halt on June 24 and were due out of a 14-day suspension today but has now extended that for another three and a half months.
Two weeks ago, the company announced it had found large amounts of obsolete and out-of-date dairy stocks dating back to 2017 which forced it to declare $60 million in writedowns.
A week later it announced its managing director and chief executive officer Rory Macleod would leave the company, following in the footsteps of its chief financial officer, Campbell Nicholas.
The obsolete stock was discovered as the company moved product from external warehouses into its own storages.
Chairman Perry Gunner told investors last month the board was continuing to review its inventory levels and would not rule out further writedowns.
Mr Gunner said further updates would be provided as soon as practicable.
In today’s announcement, the Freedom Foods board said trading in the company’s shares would not commence until more clarity could be provided on “significant items”.
These included the food processor’s inventories, completion of audited 2019-20 accounts, a search for a new CEO was under way, and any necessary capital initiatives were announced or completed.
“The board has formed the view that significant resources and time will be required to achieve a position where all of these activities are announced or finalised,” it said.
“Based on the work done to date, a period of voluntary suspension up to close of trading on Friday, 20 October, 2020, is considered a prudent and realistic time frame to achieve these outcomes.
“If it is possible to reduce this period and thereby reduce the period of suspension, that will be done.”
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