Day-to-day operations of UK-based packaging giant Linpac will not be affected by the decision of a private equity firm to sell its stake in a debt-restructuring deal, FoodProductionDaily.com understands.
Montagu Private Equity is said to have inked an agreement earlier this week to walk away from Linpac – with lenders lined up to take on the business as a going concern.
Debt burden cut
Rising commodity costs, volatile raw material prices and the decline in sterling all combined to heap financial woes on to Linpac last year. But the latest move, due to be completed by the end of the year, will see the packaging company’s debt burden halved to £320m ($529m), according to Reuters, citing sources close to the deal.
Customers, suppliers and employees will not be affected by the restructuring with sources saying the company will emerge in a stronger position - particularly as the plan is said to include a £65m cash injection into the company, FoodProductionDaily understands.
Montagu bought the company from its family owners in 2003 for £860 million pounds and is believed to have recovered around 80 per cent of this investment through a recapitalisation in 2007.
Linpac has also announced it has renamed its product range across Europe to simplify its collection of trays and films.
The naming system will now be more intuitive, said the company. All rigid plastic trays made from virgin material will be called Fresh, followed by the material they are made from, for example Fresh PP or Fresh PET. Trays containing an element of post-consumer recyclate will also be called Fresh followed by the material initials, but they will be prefixed with the letter ‘R’, for example Rfresh PP or Rfresh PET.
Its barrier film range has been divided into four distinct family groups. The family name will be followed by the type of material which the film is designed to seal with, making it easier for customers to identify the correct film to match the trays they use.
Those films offering better than standard gas barrier qualities will include the letters ‘HB’ to make identification easier. For example, a tray lidding film with a PE sealing layer offering high barrier sealing will be listed as LINtop PE HB followed by information about the material’s thickness.
The product formulations, structures and performance remain unchanged, said Linpac.