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November 12, 2020

Australia’s Freedom Foods ‘in talks over recapitalisation plans’

Australia's Freedom Foods Group is reported to be in talks with named funders as part of its efforts to recapitalise the group.

By Leonie Barrie

Australia’s Freedom Foods Group is reported to be in talks with funders as part of its efforts to recapitalise its business with a cash injection of at least AUD200m (US$145.3m).

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

According to The Australian Financial Review, Freedom Foods has engaged with funders Oaktree Capital Management, Anchorage Capital Group and Sixth Street Partners in regard to its recapitalisation proposals.

The media outlet said it understood the funders would offer the group cash in the near future in return for an interest bearing loan and, potentially, an equity stake in the future.

The group’s controlling shareholder, the Perich family, is likely to stump up the first AUD100m with that amount then match-funded by a financial firm, the newspaper said.

Freedom Foods announced last month it had extended a share trading halt again to give itself more time to complete an investigation into possible fraudulent activity.

It informed the Australian Securities Exchange (ASX) its shares would remain voluntarily suspended until 30 November, one month beyond the 30 October deadline, which was itself an extension of the original self-imposed 14-day trading halt, while it finalised its accounts for the financial year ended 30 June, 2020, and to complete a recapitalisation plan.

Freedom Foods, which produces free-from cereals and snacks, and also fresh milk, milk drinks and plant-based beverages, has been undertaking a review of its accounts since August. In a call with analysts on 25 June, the company said it was probing the possibility of fraudulent activity after booking write-downs following the departure of senior executives.

The company said in June it had engaged professional firms Ashurst and PwC to assist with its internal investigation.

The group’s annual general meeting has also been deferred while enquiries continue. 

just-food has asked Freedom Foods for its comment on this story.

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Free Report
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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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