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November 17, 2021updated 18 Nov 2021 9:38am

Freedom Foods lets go of Australia Fresh Milk Holdings

Freedom Foods plans to use the proceeds as security for an US$18m bank facility.

Australia’s Freedom Foods Group has announced another disposal under a strategy to focus on dairy, nutritionals and plant-based beverages.

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Despite saying earlier this month the sale of its seafood business to the Tempo Group marked the “end of the structural reset of our company”, Freedom Foods plans to divest its shares in Australia Fresh Milk Holdings (AFMH).

Freedom Foods still holds a 10% share in AFMH, a spokesperson confirmed, adding the stake sale is more of a “structural change” because it is an investment rather than a business per se, adding “there are no further disposals planned at this time”.

AFMH, regarded as Australia’s largest dairy processor, is a partnership between the Moxey dairy farming family and the Perichs, along with Freedom Foods. Michael Perich became the permanent CEO of Freedom Foods in March and his family own the New South Wales-based Arrovest investment vehicle, which is the majority shareholder in the company.

Freedom Foods said in a filing with the Australian Securities Exchange today (17 November) that it “has received an offer for the company’s entire shareholding in AFMH from an entity related to the company’s majority shareholder Arrovest”. The deal amounts to AUD25m (US$18.2m).

The funds received from the stake sale will be used as security for a proposed “bank guarantee facility” of as much as US$18m.

In addition, Freedom Foods plans to issue up to AUD26m in convertible notes to pay damages associated with a settlement with US-based Almond Breeze maker Blue Diamond over a licencing agreement, about which a separate announcement was made today. Arrovest will not participate in the notes offering planned for December.

Freedom Foods Group has been dogged by a poor financial performance, an accounting probe and executive departures. It announced a AUD265m recapitalisation exercise earlier this year to “substantially repay its bank debt, providing a flexible capital structure that better facilitates the continued financial and operational turnaround of the company”.

The disposals of AFMH and Specialty Seafood build on the sale of Freedom Foods’ snacks and cereals business to fellow Australian firm The Arnott’s Group last year.

The business is now left with the Milklab brand of dairy and almond, soy and coconut-based alternative beverages, along with Australia’s Own in the same categories, and the So Natural milk brands. Nutritionals include the Crankt protein drinks line and the Vital Strength brand of protein powders.

A name change for Freedom Foods to Noumi is set for a vote tomorrow at the AGM.

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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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