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MND/ MNP - Mondi Group announces the proposed demerger of Mondi Packaging
South Africa
Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND ISIN: ZAE000097051
Mondi plc
(Incorporated in England and Wales)
(Registration number: 6209386)
JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI
As part of the dual listed company structure, Mondi Limited and Mondi plc
(together `Mondi Group`) notify both the JSE Limited and the London Stock
Exchange of matters required to be disclosed under the JSE Listings
Requirements and/or the Disclosure and Transparency and Listing Rules of the
United Kingdom Listing Authority.
Mondi Group announces the proposed demerger of Mondi Packaging South Africa
Mondi Group today announced its intention to separate its interest in Mondi
Packaging South Africa (MPSA) via a demerger whereby all the ordinary shares
in MPSA held by Mondi Limited will be distributed to the Mondi Limited
ordinary shareholders. MPSA would be listed under a new name on the
securities exchange operated by the JSE Limited (JSE).
MPSA`s future growth plans, particularly with respect to its rigid plastics
business, are constrained by the Mondi Group`s differing strategic focus. The
demerger endorses MPSA`s own strategy and provides shareholders with a clear
benefit as both businesses would be able to take better advantage of their
respective growth opportunities.
David Hathorn, CEO of Mondi Group, said:
"This is the right time to demerge MPSA, for both Mondi Group and MPSA.
Whilst Mondi Group has been a very supportive owner, this move will give MPSA
the flexibility it needs to develop its core growth areas. MPSA is unique
within the Group as no other part of Mondi produces rigid plastics or
cartonboard and therefore the Board felt that MPSA would be best placed to
take advantage of the considerable opportunities available to it as an
independent entity."
MPSA`s revenue in 2010 from continuing operations was R5.7 billion (Euro591
million), of which R4.4 billion (Euro455 million) was related to paper
(including recovered paper collection; packaging and industrial papers such
as cartonboard and containerboard; and corrugated packaging operations) and
R1.3 billion (Euro136 million) was related to plastics (including PET bottles
and closures; large injection moulded containers; styrene trays, fast food
containers and clear plastic films; and other rigid plastic containers).
Currently, Mondi owns 70% of MPSA, the Shanduka Group owns 25% and Mondi
Employee Investment Company Limited (a Mondi Employee Share Option Plan) owns
5%. The shareholders have agreed to a recapitalisation of MPSA ahead of its
listing, with a view to creating a long term capital structure for the
business based on net debt of around 2 times current earnings before
interest, tax, depreciation and amortisation. The recapitalization would
result in Mondi`s equity interest in the business increasing to around 90%.
Shanduka Group would reduce its interest in MPSA to around 10% just before
the demerger and has committed to stay invested in MPSA for at least 180 days
following its listing.
As part of the proposed demerger, Mondi Group intends to undertake a
"matching action" (for the purposes of the Mondi Group`s DLC structure
agreements) by way of a share consolidation of Mondi Limited ordinary shares.
The matching action is intended to have, as far as practicable, an equivalent
but not necessarily identical economic effect on Mondi plc ordinary
shareholders to the economic effect of demerging MPSA ordinary shares to
Mondi Limited ordinary shareholders. The size of the Mondi Limited share
consolidation would be based on the volume weighted average share prices of
MPSA and the Mondi Group (Mondi plc and Mondi Limited) traded during a
period, to be determined, following the demerger and listing of MPSA.
The demerger and the matching action require various third party approvals
and are also subject to the approval of both Mondi plc and Mondi Limited
shareholders. Mondi intends to announce further details of the proposed
demerger and matching action during May 2011, at which time all relevant
documents, including MPSA`s pre-listing statement, would be made available.
The outcome of the proposed demerger may have a material effect on the price
of Mondi Group`s securities. Accordingly, shareholders are advised to
exercise caution when dealing in their Mondi Group shares until a further
announcement is made.
Rothschild is acting as financial adviser to Mondi Group and Rand Merchant
Bank is acting as financial adviser to MPSA.
/ends
7 April 2011
Sponsor: UBS South Africa (Pty) Ltd
Contact:
Mondi Group
Lora Rossler
Group Corporate Affairs Manager
Tel: +27 (0)11 994 5400 or +27 (0)83 627 0292
E-mail: lora.rossler@mondigroup.co.za
Kerry Crandon
Group Communications Manager
Tel: +27 (0)11 994 5425 or +27 (0)83 389 3738
E-mail: kerry.crandon@mondigroup.com
Andrew King
Group CFO
Tel: +27 (0)11 994 5415 or +27 (0)82 870 8100
E-mail: andrew.king@mondigroup.com
Editors` notes
About Mondi:
Mondi is an international paper and packaging Group, with production
operations across 31 countries and revenues of Euro6.2 billion in 2010. The
Group`s key operations are located in central Europe, Russia and South Africa
and as at the end of 2010, Mondi employed 29,000 people.
Mondi is fully integrated across the paper and packaging process, from the
growing of wood and the manufacture of pulp and paper (including recycled
paper), to the conversion of packaging papers into corrugated packaging,
industrial bags and coatings.
The Group is principally involved in the manufacture of packaging paper,
converted packaging products and uncoated fine paper (UFP).
Mondi has a dual listed company structure, with a primary listing on the JSE
Limited for Mondi Limited under the ticker code MND and a premium listing on
the London Stock Exchange for Mondi plc, under the ticker code MNDI. The
Group has been recognised for its sustainability through its inclusion in the
FTSE4Good UK, Europe and Global indices in 2008, 2009 and 2010 and the JSE`s
Socially Responsible Investment (SRI) Index in 2007, 2008, 2009 and 2010.
About Mondi Packaging SA:
Turnover: R5.7 billion in 2010 from continuing operations
EBITDA: R794 million in 2010 from continuing operations
Employees: 3400
Operations:22 manufacturing operations, 29 operating sites
Revenue mix: Plastics 23%, Paper 77%
About the demerger and share consolidation:
Under the proposed demerger and matching action, shareholders in Mondi plc,
the London Stock Exchange (LSE) and JSE listed entity and shareholders in
Mondi Limited, the JSE listed entity, would be treated equally but not
identically.
Firstly, Mondi Limited shareholders would receive shares in MPSA through a
dividend in specie pro rata to their shareholdings in Mondi Limited.
Secondly, a number of Mondi Limited shares equivalent in value to the MPSA
equity value distributed to Mondi Limited shareholders, would be
consolidated. As a result, the proportional interest of Mondi Limited
shareholders in the Mondi Group would be reduced.
Post the demerger and consolidation, Mondi Limited shareholders would have an
interest in MPSA and a proportionately smaller interest in the remaining
Mondi Group, while the Mondi plc shareholders would have no interest in MPSA
but a larger proportionate share of the remaining Mondi Group.
The size of the Mondi Limited share consolidation would be based on the
volume weighted average share prices of MPSA and the Mondi Group (Mondi plc
and Mondi Limited) traded during a period, to be determined, following the
demerger and listing of MPSA.
Date: 07/04/2011 08:00:05 Supplied by www.sharenet.co.za
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