Consol targets $227 Million Johannesburg Listing to Strengthen Balance Sheets in Nigeria, Others

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  • Float could value company at around $2 bln – bankers
  • Consol returning after 11 years in private equity hands
  • Reported EBITDA of 1.6 billion rand last year (Adds Ethiopia factory details, paragraph 6)

By Tiisetso Motsoeneng

Consol Holdings Ltd., the glass-packaging maker that last traded on Johannesburg’s bourse more than a decade ago, said it’s plotting a return and is seeking to raise 2.7 billion rand ($227 million).

Consol delisted in 2007 after a group of private-equity investors led by Brait SE took it private. Consol’s return, mooted for at least three years, previously faced uncertainty amid South African political turmoil and slowing economy. Under new President Cyril Ramaphosa, who has promised to tackle corruption and clarify policy, the rand has strengthened and business confidence is rising.

Consol, which has operations in South Africa, Kenya and Nigeria, will use the money raised by listing to strengthen its balance sheet, it said in a statement Thursday, without detailing when trading will begin. For the six months ended December the glass manufacturer’s adjusted earnings before interest, taxes, depreciation and amortization rose 4.5 percent to 936 million rand.

Brait, the South African investment company that also owns U.K. clothing retailer New Look and gym chain Virgin Active, reported a first-half loss in November after New Look suffered from a combination of difficult market conditions and a “number of self-inflicted issues.” With the retailer being forced to close stores and slash rents to survive, the Consol listing will allow Brait to boost its capital.

Brait shares climbed 1.2 percent to 36.46 rand as of 10:16 a.m. in Johannesburg.
Banks Appointed

The share offer will be made to selected investors and won’t be available to the public, Consol said in the statement. Some of the proceeds will be used to repay a portion of the group’s shareholder loans and the balance of those loans will be converted to equity upon listing, it said.

Merrill Lynch International, Goldman Sachs International, FirstRand Ltd.’s investment banking unit and Standard Bank of South Africa Ltd. have been appointed as joint global coordinators for the listing.

BLUE-CHIP CLIENTS

Consol, which counts blue chips such as Anheuser-Busch InBev, Diageo and Heineken among its customers, said the listing would allow shareholders to cash in on their 11-year investment in the company and raise money to pay down debt.

Goldman Sachs and BofA Merrill Lynch are working on the listing, along with South African banks RMB and Standard Bank, who will market the deal to domestic investors.

Other shareholders are the private equity arms of financial conglomerates Old Mutual and Sanlam and the state pension fund, Public Investment Corporation.

A successful floatation would be rare piece of good news for 30 percent owner Brait, whose stock has been hammered by a concerns about its biggest shareholder Christo Wiese and the performance of its British retailer New Look.

Wiese is tallying up losses from a share price crash in Steinhoff, a retailer in the throes of an accounting scandal which has left him seriously out of pocket and stripped off his billionaire status.

New Look, acquired in 2015 in a $1.2 billion deal, is struggling to pay down debt and compete on a crowded British high street, forcing Brait to slash its net asset value last November.

$1 = 11.9172 rand Reporting by Tiisetso Motsoeneng; editing by Jason Neely

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