Rich Lister Geminder’s pain may be ending after $1.3b wipeout

afr.com:

Pact Group’s bruising share price slide over the past two years, which cut the value of Rich Lister Raphael Geminder’s 49 per cent stake in the packaging company by $1.3 billion, partially reversed on Wednesday after a $160 million asset sale.

Pact sold a 50 per cent stake in one of its growth businesses, Crate Pooling and Crate Manufacturing, to infrastructure investor Morrison & Co to cut rising debt levels as it tumbled to an annual loss.

It triggered a partial rebound in Pact shares of 12 per cent to 85¢ by noon, which cheered chief executive Sanjay Dayal. “It’s always good when it goes up,” Mr Dayal said. “Share prices are a consequence of what you do.”

Rich Lister Raphael Geminder owns 49 per cent of Pact Group.  Josh Robenstone

The deal implied an enterprise value of $380 million for the crates unit.

Pact scrapped a final dividend payout after slumping to a loss of $6.6 million in the 12 months ended June 30 after writedowns of $53 million on some of its packaging plants, a slowdown in demand for packaging in agriculture, and a shift by shoppers to buying bigger-sized home brands in milk.

But even after Wednesday’s share price rise, Mr Geminder, No. 108 on the Financial Review Rich List in 2023, has still lost $1.3 billion on paper in the value of his Pact stake over the past two years. Pact shares plummeted from $4.55 in mid-August 2021 to a low of 55.5¢ on June 26.

The cash proceeds from the sale to Morrison & Co will be $160 million after transaction and tax costs. The business makes and washes plastic crates and trays used by large supermarkets and other retailers to transport and display products such as fruit and vegetables. Mr Dayal said the joint venture would help drive faster growth in the segment which