Packaging solutions company Orora Ltd (ASX:ORA) has sold its North American business in a transaction worth A$1.7 million, with the proceeds to facilitate its transformation into a company focused on packaging to the beverage industry.
The sale was made to Verativ Corporation – is an investee company of Clayton, Dubilier & Rice LLC, which is based in Georgia.
Orora aims to use the proceeds to repay debt facilities and invest in an organic Cans capacity expansion in Rocklea, Queensland, and will also begin returning proceeds from the transaction to shareholders in the form of an on-market share buy-back.
Managing director and CEO Brian Lowe said, “Today marks a significant milestone for Orora – completing the sale of OPS is a critical step forward in our strategy to become a specialised packaging provider for the beverage industry, focusing on our core glass and cans packaging businesses.”
He continued: “OPS transitions to Veritiv in a strong position, having transformed and grown whilst part of the Orora Group.
“The transaction leaves Orora with a strong balance sheet, with an initial focus on the repayment of debt facilities.
Capital management initiatives will include a share buyback as announced on 10 December and investment in strategically aligned projects that will grow the business and deliver value for our shareholders.”
Orora shares were lower after this news, and at 12:51 AEDT, they were trading at $2.42 – a fall of 0.62% since the market opened.
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