June 25, 2020 / 11:39 AM / 8 days ago

Australia's Freedom Foods to book further writedowns

June 25 (Reuters) - Australia’s Freedom Foods Group said on Thursday it would make further writedowns to the value of its inventory and raise provisions for bad debts this year, calling in global law firm Ashurst and accountant PwC to investigate further.

The update by the cereal and snacks maker comes a day after it said its CEO Rory Macleod had gone on leave, sending the company’s shares down 14% on Wednesday, and two days after Campbell Nicholas resigned as CFO.

It has asked for a 14-day suspension of its shares as it investigates its financial position further.

Freedom Foods, backed by the billionaire Perich family, declined to comment on Macleod’s absence.

It said it will now write down A$60 million ($41.29 million) of inventory, more than double an initial estimate due to out-of-date stock and product withdrawals dating back to 2017. It added that stock outside Australia may also have to be written-down.

The maker of the popular Messy Monkey branded snacks also took an extra A$10 million charge toward bad debts.

Chairman Perry Gunner said in a statement that the Perich family will support the company and “capital requirements as they arise”. ($1 = 1.4533 Australian dollars) (Reporting by Nikhil Kurian Nainan and Anushka Trivedi in Bengaluru; Editing by Kirsten Donovan)

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