Rich Lister Raphael Geminder’s other packaging disaster
Rich Lister Raphael Geminder’s private company has warned shareholders in Pact Group that dividends are on hold indefinitely, as part of his audacious privatisation offer.
Pact’s chief executive told staff it is “business as usual”.
Mr Geminder’s Kin Group made a 68¢ a share offer on Wednesday for the 50 per cent of Pact it doesn’t own, which valued the company at $234 million. Mr Geminder’s Kin Group owns 66 per cent of another ASX-listed packaging business, Pro-Pac Packaging, which has been an even worse performer than Pact.
Rich Lister Raphael Geminder owns 50.004 per cent of Pact Group and wants to buy the rest. Josh Robenstone
Pro-Pac has a sharemarket capitalisation of just $53 million and made a loss of $10.2 million in the 12 months ended June 30 as revenue slipped 5.5 per cent. Pro-Pac shares have tumbled from $1.50 in October 2021 to just 29¢.
Both Pact, which has lost $1.3 billion in sharemarket value in two years, and Pro-Pac, have been hit by rising inflation in raw material costs like resin which has hurt margins, and the need to invest heavily in factories to ensure more of the packaging products can be recycled.
Pro-Pac bulked up in 2017 with the $178 million acquisition of Integrated Packaging Group. Ahmed Fahour, a former chief executive of Australia Post, was the chairman of Pro-Pac at the time. Pro-Pac is now worth one-third of the price it paid for Integrated Packaging Group.
The Kin Group bidder’s statement, which will officially be sent out to Pact’s 9600 shareholders later this month, signals that anyone relying on the stock for income is in for a rough time.
The bidder’s statement lodged with the ASX states that Kin Group intends to “maintain the suspension of dividends to focus on debt
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