South African listed food group AVI will list its glass packaging unit Consol on the support services sector of the Johannnesburg Stock Exchange (JSE) Securities Exchange on 28 February 2005 after unb…
South African listed food group AVI will list its glass packaging unit Consol on the support services sector of the Johannnesburg Stock Exchange (JSE) Securities Exchange on 28 February 2005 after unbundling 315.4 million shares in the Consol group to shareholders. AVI said on 15 January 2005 through Consol“s prelisting statement that owing to the strength of its balance sheet and its cash-generation ability, it would also distribute ZAR 0.64 per ordinary AVI share before the unbundling. News of the unbundling of Consol in October 2004 was made public by AVI as part of its long-stated objective of becoming a focused branded consumer products and services group. AVI said the listing of Consol would create a substantial focused packaging firm with the financial strength to pursue an independent long-term strategy. AVI gained full control of Consol the day before the unbundling and listing announcement through the purchase of the 19.26% stake in Consol it did not already own. The minority holding was purchased from Owens-Illinois for ZAR 525 million. The unbundling will be carried out in the ratio of one Consol share for each AVI share held. The unbundling and listing proposal will go before a general meeting of AVI shareholders scheduled for 7 February 2004. Consol“s return to the JSE follows its delisting in 1998 after a period of disappointing trading. The company was restructured in the following years and is now the market leader in the South African glass packaging industry. AVI said Consol had good growth opportunities, which included the continued growth of the premium wine export sector and the longer-term prospect that beer sales could move from returnable to non-returnable bottles. Consol“s directors have forecast export growth of 8% to 10% a year for the South African wine industry over the next five years. They see consumer trends as indicating that glass will be the preferred packaging medium for most beverages and food products. Consol also sees opportunities in the expansion of its manufacturing base into west and east Africa. The company has two divisions, Consol Glass and Consol Plastics, and controls approximately 75% of the South African glass packaging market. The glass division contributed ZAR 1.9 billion in turnover for the year to June 2004 and turnover from the plastics division for the same period amounted to ZAR 220 million. Major clients include ABI, Appletiser, Coca-Cola, Diageo, Distell, SAB, Unilever, Tiger Brands, Parmalat, Adcock Ingram, Clover and Dulux.