Freedom Foods (ASX: FNP) has announced that its shares will be suspended until 30 October 2020.
What is Freedom Foods?
Freedom Foods is a food company that was started in 1986 with a focus on making nutritious and healthier food and beverages. It started with products in soy, rice milks and breakfast drinks. Some of its brands include Freedom, Milk Lab, Crafted Blends, Messy Monkeys, Australia’s Own, So Natural, and Goodness.
Long-term suspension
Over the past couple of weeks Freedom Foods has announced that it has had to write down a number of items amounting to tens of millions of dollars. This process has also seen the Managing Director and CEO Rory Macleod leave the company.
The Freedom Board believe that a lot of work needs to be done to give investors comprehensive and up to date information about the historical issues identified, the company’s financial position and the outlook.
Freedom wants to finish looking into the issues and complete the FY20 audit and also any other impacts on previous reporting periods before shares can trade again. Though if it can start trading sooner, it will be done.
The company is also going to try to provide guidance for FY21 when it can as well as COVID-19 impacts, potential operational improvements, strategic initiatives and product initiatives.
Freedom Foods is looking for a new CEO as well as a new chief financial officer and wants to appoint people as soon as practical.
As part of the update, the company has managed to receive a waiver from its financiers regarding its debt covenants at 30 June 2020.
Summary
It’s quite a predicament that Freedom Foods finds itself in. With the lenders on board it seems the company doesn’t face any imminent danger. But the FY20 result is probably going to show a lot of accounting pain. Hopefully the company can bounce back in FY21.
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