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

 

Crown Accounts: Government Ekes Out Six-Month Surplus Of $9M

The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected. More>>

ALSO:

Almost 400 Jobs: Shock At Cadbury's Dunedin Factory Closure

Workers at Cadbury in Dunedin are reeling after learning this morning that the iconic Cadbury factory is to close, with the loss of almost 400 jobs... “The company had reported it was doing well and this has come out of the blue,” says Chas. More>>

ALSO:

Transport: Boards Of Inquiry For Auckland Roading Projects

Boards of Inquiry have been appointed to decide on two significant Auckland roading projects in a move which will get a decision by the end of the year, Environment Minister Dr Nick Smith and Conservation Minister Maggie Barry announced today. More>>

ALSO:

Three Months On: Quake Reciovery In Kaikōura And Elsewhere

Three months after the magnitude 7.8 earthquake on 14 November, encouraging recovery progress is being made in affected communities. More>>

ALSO:

Jetstar, Qantas For Govt Transport: Government Still In Talks With Air NZ

The government is still negotiating with national carrier Air New Zealand in a cross-agency air travel contract that will add a number of new airlines to the list of approved flyers. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news