Freedom Care Group Holdings has revealed ongoing financial distress with key subsidiaries entering liquidation and persistent delays in payments from the NDIA, leaving the company with a diminished cash reserve and a strategic focus on asset sales and cost reduction.
- Freedom Care Group and a 50% subsidiary placed into liquidation early 2025
- Cash balance dropped to $0.4 million by March quarter end
- Challenges persist in collecting outstanding receivables from the NDIA
- Thrive Day Program sold for $280,000 to preserve value
- Director loan of $200,000 provided to support short-term liquidity
Quarterly Financial Struggles
Freedom Care Group Holdings Limited (ASX, FCG) has disclosed a challenging quarter ending 31 March 2025, marked by significant financial strain and operational setbacks. The company’s cash reserves have dwindled to $0.4 million, down from $0.6 million at the close of the previous quarter, reflecting ongoing liquidity pressures.
Two of its key entities, Freedom Care Group Pty Ltd and Regional Disability Services Pty Ltd (a 50% owned subsidiary), were placed into liquidation in January and February respectively. These moves underscore the severity of the financial difficulties faced by the group, particularly as Regional Disability Services reported a sharp deterioration in cash flow and mounting financial pressures prior to liquidation.
Receivables and NDIA Challenges
The company continues to grapple with collecting outstanding payments from the National Disability Insurance Agency (NDIA), a critical source of revenue. The appointed administrator, KPT Restructuring Pty Ltd, has reported ongoing challenges, including irregular payments and delayed responses to queries from the NDIA. This uncertainty around receivables recovery adds to the company’s cash flow constraints and complicates efforts to stabilise operations.
Preserving Value and Supporting Liquidity
In a bid to shore up finances, Freedom Care Group successfully sold its Thrive Day Program for $280,000 during the quarter. Additionally, a director loan of $200,000 was extended to the company, providing a vital short-term liquidity boost. These steps reflect a strategic focus on asset disposals and cost containment as the company navigates its financial challenges.
The board has confirmed that no payments were made to directors or related parties during the quarter, signalling a tight control on expenditures amid the restructuring efforts.
Outlook and Strategic Direction
Looking ahead, Freedom Care Group is actively engaging with the NDIA to expedite the recovery of outstanding receivables, although the timing and certainty of these payments remain unclear. The company is also exploring further asset disposals and scaling back operations to preserve value and extend its runway.
Directors remain cautiously optimistic about continuing operations on a reduced basis, closely monitoring liquidity and operational costs. However, the path to financial stability is contingent on improved cash flow from receivables and successful execution of asset sales.
Bottom Line?
Freedom Care Group’s next moves on asset sales and NDIA payments will be critical to its survival and investor confidence.
Questions in the middle?
- When can investors expect meaningful payments from the NDIA to resume?
- What assets remain available for disposal to bolster liquidity?
- Could further restructuring or capital raising be on the horizon?