The Freedom Foods Group Ltd (ASX: FNP) share price has been suspended from trade since 24 June following the shocking developments that occurred at the diversified food company over the last 12 months.
However, this morning it took a step forward towards returning to the ASX boards in the not so distant future.
What did Freedom Foods announce?
According to the release, Freedom Foods has secured the ongoing support of its principal lenders and majority shareholder. This ensures access to financial facilities while the company undertakes its planned recapitalisation.
Freedom Foods has agreed a standstill deed with its two main lenders, HSBC and National Australia Bank Ltd (ASX: NAB), regarding financing facilities with those lenders.
This agreement is effective until 30 November 2020 and is subject to the company meeting certain milestones relating to the progression of its recapitalisation plan.
In addition to this, with the support of a guarantee from an entity related to majority shareholder Arrovest Pty Limited, HSBC and NAB have also agreed to continue to make certain liquidity facilities available to the company during the standstill period.
Freedom Foods’s Interim Chief Executive Officer and major shareholder, Michael Perich, commented: “We are grateful for the ongoing support of our financiers and our majority shareholder. 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.”
What now?
The company is currently being advised on its strategic options by Moelis Australia and its shares will remain in voluntary suspension until at least 30 October 2020 at the company’s request.
Until then, the company intends to continue to keep investors up to date with material developments in accordance with its continuous disclosure requirements.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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