Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Hart bundles packaging assets, loads debt into RGH

Hart bundles packaging assets, loads debt into Reynolds group

April 21 (BusinessWire) - Reclusive kiwi billionaire Graeme Hart appears to be preparing his global packaging business, Reynolds Group Holdings, for sale, announcing plans for RGH to raise US$1.75 billion in new debt to acquire other parts of Hart's Rank Group empire.

The debt-raising will allow Hart to bundle Carter Holt Harvey's specialty packaging paper mill at Whakatane into a wider transaction that will also tip US-based Evergreen Packaging into RGH, a company that the Rank Group acquired through subsidiaries in 2008.

The transactions all involve assets ultimately owned by Rank since December 2007, the same year as he acquired the Evergreen packaging group, which has operations in states of the US and in Saudi Arabia, Latin America, and China.

RGH global activities span the globe, although the company's latest annual report says its principal competitor, TetraPak has a "significantly higher" share of the global "aseptic" packaging market, used for packaging food, beverages and pharmaceuticals than RGH.

The report, prepared for the standards of US debt market reporting and running to nearly 400 pages, shows the RGH group to be marginally profitable in the last financial year and carrying an already heavy debt load.

In the year ended December 31, RGH reported net profit for the period of 11 million Euros, compared with a 128.1 million Euro loss the previous year, and losses in the previous two yearas on a consolidated basis. The group is highly exposed to movements in a wide range of currencies, and in the world price for aluminium, cardboard and resins used in plastic-making.

While current "substantial indebtedness couldadversely affect ourability to fulfill our obligations", the risks section of the RGH report also notes that "despite our substantial indebtedness we may be able to incur or issue substantial additional debt in the future".

The report discloses current outstanding bonds and non-current indebtedness of 3.1 billion euros, but suggests improving financial metrics, with total debt as a proportion of earnings before interest, tax, debt, and amortisation has reduced from a multiple of 5.1 times at the June 30 to 4.3 times by year-end, December 31.

A management presentation accompanying the annual report shows RGH has been hit by a return to store-branded goods rather than specialty brands, thanks to the global financial crisis, and that it has been consolidating operations, reducing headcount and rationalising its product lines across several of its businesses in the last year.

The Whakatane mill is CHH's only coated cartonboards mill operating in New Zealand, with the remainder producing linerboard, pulp and paper products.

The transactions are expected to be completed next month, according to a statement from RGH. In keeping with its standard practice, no part of the Hart empire is commenting further.

However, market speculation is that Hart is bundling assets and debt into RGH to prepare them for sale, in line with Hart's previous history of aggregating businesses of regional or global scale and organising them for on-sale.

The RGH report identifies the potential for competitors to consolidate their operations as a business risk, and a trend of the last decade that it expects to continue.

Last October, Rank announced a US$3 billion rejig to the ownership of Closures Systems International and Reynolds Consumer Products, both of which comprise elements of RHG and which make plastic caps and closures and foil, wraps and bags.

In a statement to the Irish stock exchange, Luxembourg-based Beverage Packaging Holdings (Luxembourg) II, a subsidiary of Rank, disclosed that another Rank entity, Beverage Packaging Holdings (Luxembourg) III, would acquire the two businesses. Rank owns RGH through BPI and BPII.

(BusinessWire)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news