Picture: Reuters. Picture: Reuters.
Dual-listed paper and pulp group Mondi (MND, MNP) announced on Thursday that its shareholders had approved the demerger of its South African packaging division, and consolidation of shares in the group.
This paves the way for the listing of the packaging unit, which was in May renamed Mpact, on the JSE on July 11.
The completion of the demerger was awaiting shareholder approval.
At the general meeting held on Thursday, Mondi said its shareholders approved the demerger, consolidation and conversion. These were “unconditional” and would progress as planned, the company said.
Mpact operates in South Africa, but has plants in Namibia, Mozambique and Zimbabwe. It produces corrugated packaging products and has a growing rigid plastics packaging business, and is also involved in the production of cartonboard.
In terms of this transaction, investors in Mondi Ltd would see their shareholding in Mondi Group consolidated in exchange for receiving Mpact shares.
To compensate Mondi Plc shareholders for not getting shares in Mpact, Mondi Ltd investors would see the proportion of shares they owned in Mondi Group reduced.
Mondi Ltd shareholders own around 30% in Mondi Group, while Mondi Plc shareholders hold the remainder.
In May, Mondi said certain shareholder loans made to Mpact would be repaid using the cash proceeds received from the new share subscription as well as newly arranged borrowing facilities.
On April 7 it said that around 1.6 billion rand in bank loans would be used to repay part of a 2.2 billion rand mezzanine debt, while the other part of this mezzanine debt would be converted into equity. - I-Net Bridge