Join our daily newsletter At The Bell to receive exclusive market insights
- Amid its recapitalisation plan, embattled consumer stock Freedom Foods (FNP) has reached a standstill agreement with its lenders
- The deal, supported by Freedom’s principal lenders and its majority shareholder, means the company can still access its outstanding finance facilities while it works to recapitalise the business
- Both investment bank HSBC and big four financial NAB (NAB) have thrown their weight behind the business, signing up to the standstill deed
- While the deal will provide some much-needed breathing room, it won’t last for long; in fact, the agreement is only valid until November 30
- Freedom Foods’ stock remains under voluntary suspension as the consumer stock deals with the fallout from CEO Rory MacLeaod’s resignation
- The healthy foods manufacturer is also running an investigation into its financial position after expired food — worth around $60 million — had to be written off
- Freedom shares last traded for just over $3.00 each on June 26, 2020
Amid its recapitalisation plan, embattled consumer stock Freedom Foods (FNP) has reached a standstill agreement with its lenders.
The deal, supported by Freedom’s principal lenders and its majority shareholder, means the company can still access its outstanding finance facilities while it works to recapitalise the business.
Both investment bank HSBC and big four financial NAB (NAB) have thrown their weight behind the business, signing up to the standstill deed. Both companies will also keep liquidity facilities open to Freedom after a party linked to Arrovest — Freedeom’s majority stakeholder — made a guarantee.
While the details of that assurance weren’t disclosed to the market, it seems to have been enough to appease the blue-chip banking stocks and keep the cash flowing.
In exchange for the agreement, Freedom Foods needs to meet certain requirements and hit some milestones on its recapitalisation plan.
While the deal will provide some much-needed breathing room, it won’t last for long; in fact, the agreement is only valid until November 30.
“We are grateful for the ongoing support of our financiers and our majority shareholder,” Freedom’s interim CEO Michael Perich commented today.
“These agreements provide us with the financial support and flexibility we need to ensure the business continues to perform at its best while we pursue recapitalisation options,” he continued.
Freedom Foods’ stock remains under voluntary suspension as the consumer stock deals with the fallout from CEO Rory MacLeaod’s resignation.
The healthy foods manufacturer, headquartered in New South Wales, is also running an investigation into its financial position after expired food — worth around $60 million — had to be written off.
The blowout was accompanied by a slew of management changes, with Chief Financial Officer and Company Secretary Campbell Nicholas leaving his post in late June.
Freedom shares last traded for just over $3.00 each on June 26, 2020.
