It has been a couple of weeks since the Freedom Foods Group Ltd (ASX: FNP) share price was last active on the ASX board.
On 24 June the diversified food company requested a trading halt while it investigated its financial position following the sudden exit of its CEO and CFO.
What's the latest?
Unfortunately for shareholders, it is going to be some time until Freedom Foods shares return to action.
This afternoon the company provided an update on its suspension and requested an extension until 30 October 2020. Yes, you read that correctly, the embattled food company's shares will remain suspended for over three and a half more months.
Why did Freedom Foods announce?
The Freedom Foods board requested the lengthy suspension because there are a number of interconnected activities that need to be completed before it will be able to provide a comprehensive update on the historical issues identified and the financial position and outlook of the company.
These activities include the conclusion of its investigation of the historical issues previously announced to the market such as doubtful debts from prior periods.
It also requires time to provide appropriate guidance in relation to the outlook for FY 2021. This includes any ongoing impacts of COVID-19 on the business, as well as the impact of potential operational improvements, strategic, and product initiatives.
The board also notes that it is busy searching for a permanent Chief Executive Officer and Chief Financial Officer. It is seeking to resolve these appointments as soon as possible. Though, given the circumstances, these roles may not be the easiest ones to fill.
Finally, it may require time for any potential capital initiatives. This may include the amendment of its syndicated and bilateral banking facilities to ensure it has sufficient balance sheet strength and financial flexibility to support its business going forward.
The Freedom Foods board commented: "The Board has formed the view that significant resources and time will be required to achieve a position where all of these activities are announced or finalised. Based on the work done to date, a period of voluntary suspension up to close of trading on Friday 30 October 2020 is considered a prudent and realistic timeframe to achieve these outcomes. If it is possible to reduce this period and thereby reduce the period of suspension that will be done."
