Linpac completes financial overhaul as new owners unveiled
The UK-based packaging firm confirmed previous owners Montagu Private Equity had sold its majority stake in a deal that had seen debt cut by 50 per cent to just over ₤300m. The restructuring has only affected the holding companies and not the operating companies of the Group, said a company statement. The new owners are also pumping £65m into the group, which FoodProductionDaily.com understands will be used as working capital and to support development of the business.
Linpac insisted it had emerged from the corporate shake up “as a stronger company with a balance sheet restructured on terms more suited to today’s economic environment”. Rising commodity costs, volatile raw material prices and the decline in sterling all combined to heap financial woes on Linpac in 2008. The onset of the recession saw the company, along with most others in the sector, pare back its revenue and earning expectations. It is understood the firm is currently performing ahead of revised forecasts made in the wake of the economic downturn.
Appropriate financial arrangements
The cash injection – seen as a safety valve and an enabler – means the company is now in a financial position that gives it 'room to move' and develop, said one industry source. The firm said it would continue to invest in the business and produce innovative products and services. Company chiefs are said to believe the market will begin to recover as firms start re-stocking.
Mike Arrowsmith, Group CEO, said: “Linpac is a company with a first class customer base, multiple market-leading positions, and a highly dedicated and skilled workforce. The Board is confident that, as the global economic outlook starts to improve and with more appropriate financial arrangements in place, we will continue to be a global leader in our markets.
“We are delighted that this process has been successfully concluded and that Linpac is now so well placed for the future. We have an enviable position as a leader in our markets, and the loyalty of our customers throughout 2009 reflects the quality of our products and services. This restructuring has put the company on a strong footing from which we can maintain our competitive edge and create new opportunities for growth.”
