Ongoing Dispute Between Freedom Foods and Blue Diamond Growers: Freedom Foods Group Limited (ASX: FNP) is a consumer-branded food and beverage group. On 8^th March 2021, FNP informed the market regarding its ongoing dispute and legal proceeding with Blue Diamond. The dispute pertains to the FNP’s licensing deal with Blue Diamond to produce and sell the latter’s product. Notably, the license deal was entered in 2011 by Freedom Foods Pty Ltd and Blue Diamond.

Going back, on 22 February 2021, a second Victorian Supreme Court class action proceeding was commenced against FNP and its auditors, Deloitte Touche Tohmatsu. It alleges breach of the Corporations Act 2001, Australian Securities and Investments Commission Act. Subsequent to this hearing, on 5 March 2021, the federal court has requested for specific undertakings from Blue Diamond to keep proceeding with the arbitration, pursuant to section 7(2) of the International Arbitration Act 1974 (Cth). 

As per the undertaking, Freedom Foods Group Ingleburn Pty Ltd, Freedom Foods Group Trading Pty Ltd, and Pactum Australia Pty Ltd) will take permission from Blue Diamond to join the arbitration procedure in California against Freedom Foods Pty Ltd on or about 25 September 2020. Notably, in order to bring the claims in the Californian arbitration, Blue Diamond will not continue with the proceedings against Freedom Foods Pty Ltd in the US district court, eastern district of California.

Monetising Through Selling Operations: FNP has announced the completion of the sale of its Cereal and Snacks operations by transferring it to the Arnott’s Group. The complete sale of the operation will take place by the end of March 2021. The company is expecting a total consideration for the sale of operation at ~$20mn.

Stock Details: FNP securities have been suspended from official quotation at the request of the company on 25 June 2020, owing to a pending announcement for the outcome of further investigation with respect to FNP’s financial position. To conclude, subject to the three sets of trials in the United States and Australia, the outcome of the judgement in the Californian Arbitration is of utmost important in the dispute between these two parties. The last traded price of the stock was $3.010.

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.