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January 29, 2021

Perich family commits millions more to under-pressure Freedom Foods

Australia's Freedom Foods Group has reached an "in-principle agreement" over a recapitalisation exercise.

By Dean Best

Australia’s Freedom Foods Group has reached an “in-principle agreement” with its majority shareholder Arrovest for a cash injection under a recapitalisation project.   

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Arrovest, a New South Wales investor owned by the Perich family, has agreed to inject AUD200m (US$153.7m) into Freedom Foods through the issuance of secured convertible notes, capital the business will use to “enable it to continue its financial and operational turnaround”, as well as to pay down debt and for working capital.

Freedom Foods, which produces consumer-dairy products, dairy ingredients and plant-based beverages, launched a review of its accounts back in August after previously announcing potential fraudulent activity, an episode that resulted in the resignation of CEO Rory Macleod and CFO Campbell Nicholas last summer. Company secretary Trevor Allen soon followed.

Michael Perich, who is currently serving as interim CEO, said: “Despite the challenges of the past ten months, there remains a fundamentally strong business at the heart of Freedom Foods. With the ongoing support of Arrovest, our banks and other shareholders, we have the opportunity to rebuild the business and enable it to meet its full potential.”

In November, a local media reported suggested Freedom Foods had engaged Oaktree Capital Management, Anchorage Capital Group and Sixth Street Partners to back the company under the recapitalisation proposals.  

However, Freedom Foods said in a statement today (29 January) that it had been “progressing a proposed recapitalisation plan with a potential new investor” since December, but the company and its creditors “were not able to agree acceptable terms”. 

The company added it “continues to explore options to provide investors who are not eligible to participate, an opportunity to participate in the recapitalisation”. 

Still, Arrovest’s participation is the recapitalisation remains subject to wider shareholder approvals but Freedom Foods expects the process to be completed by April. For now, Freedom Foods’ shares remain suspended on the Australian Securities Exchange.

Last month, Freedom Foods sold its cereal and snacks division to local peer The Arnott’s Group, which is owned by US private-equity firm KKR, for AUD20m (then US$15.2m).

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How is technology having an impact on Consumer buying behavior?

As the world rapidly becomes more connected, it is important for brands to understand the impact that improved technology is having on consumer purchasing behaviors. To react effectively, brands must know how to engage with increasingly digitally savvy consumers. GlobalData’s latest Trend Tracker report provides an analysis of Digital Lifestyles – one of GlobalData's top consumer trends for 2022. The report includes an overview of how digital lifestyles are evolving, including the significant impact that the COVID-19 pandemic had on accelerating digitalization, and how this trend is emerging across different Consumer sectors. Key features included in the report:
  • A breakdown of the trend’s prominence across sectors
  • Insights into consumer online penetration, preferred electronic devices and engagement
  • The key drivers and challenges impacting the digital lifestyles trend
  • A spotlight on key innovations set to reshape the consumer landscape
  • Analysis of what’s next for digital innovations and how brands can leverage the trend
Download this report to keep in touch with the more digital consumer.
by GlobalData
Enter your details here to receive your free Report.

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