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

 


Hart's Reynolds mulls ownership of Evergreen, Closures, SIG

Graeme Hart's Reynolds reviews ownership of Evergreen, Closures, SIG

By Paul McBeth

July 29 (BusinessDesk) - New Zealand billionaire Graeme Hart's Reynolds Group is considering the sale of three units that make up more than a third of his global packaging empire's earnings.

Reynolds is reviewing ownership of its Evergreen and Closures businesses and is also mulling whether to sell its SIG packaging unit after being approached, it said in a filing to the US Securities and Exchange Commission. Last month reports emerged that Reynolds was looking to sell its SIG unit, which makes carton packaging for drinks and liquid foods, for some US$5 billion.

The review of Evergreen and Closures "is part of a review and possible reallocation of capital and resources within its business portfolio," the company said. "Both reviews may result in a decision to sell some or all of those businesses, although no decision has been made at this time to do so."

Reynolds had negative equity of US$185 million as at March 31, according to its first-quarter report, with total equity reduced by US$1.56 billion "as a result of the group's accounting for the common control acquisitions of the Closures segment and Reynolds consumer products business in 2009 and of the Evergreen segment and Reynolds food-service packaging business in 2010."

Reynolds spent 1.7 billion on SIG in 2007, acquiring the equity for the closures segment for US$708 million from an entity owned by Hart in 2009, according to filings to the SEC. The Evergreen unit was formed from a series purchases from entities owned by Hart for a total purchase price of US$1.6 billion in 2010.

The three units accounted for 35 percent of Reynolds' US$3.22 billion of sales in the three months ended March 31, and 38 percent of its adjusted earnings of US$531 million. SIG reported adjusted earnings before interest, tax, depreciation and amortisation of US$111 million on sales of US$499 million in the quarter, while Evergreen contributed earnings of US$51 million on revenue of US$379 million and Closures had US$40 million of Ebitda on sales of US$259 million.

Hart began building the packaging empire in 2006 with the takeover of Carter Holt Harvey, going on to buy International Paper's beverage packing unit and Swiss company SIG the following year, and adding Alcoa's packaging business in 2008. He then ramped up the expansion in 2010, spending US$6.5 billion on the leveraged buyout of Pactiv and then the US$4.5 billion acquisition of Graham Packaging in 2011.

The Reynolds expansion was funded largely through debt, and the packaging group had total debt of US$18.05 billion as at March 31, or 6.3 times Ebitda.

Earlier this year Reynolds chief financial officer Allen Hugli told analysts Hart had tasked management with reducing the amount of leverage the packaging group had taken on, reducing the debt to earnings ratio to 5.3 times.

Last month Reuters reported Hart's Rank Group was looking at selling its US autoparts businesses in a bid to reduce debt. Rank acquired UCI for US$980 million and FRAM Group for US$950 million in 2011.

Earlier this year, Hart sold out of the pulp, paper and packaging businesses of Carter Holt Harvey, although he continues to own the building products arm of CHH.

Hart is worth about $6.4 billion, according to the 2013 NBR Rich List.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

ALSO:

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news