Clondalkin told PN that it has completed a highly successful seven year refinancing of its debt and is well placed to continue with its progressive development plans.
According to the firm, the refinancing is one of the biggest composite transactions in packaging this year and has been well remarked in the finance markets. It included the sale of two non-core businesses [Van der Windt and a raft of its North American flexible packaging businesses] for €145 million and debt repayments of €585 million.
Speaking to Packaging News, group finance director Colman O'Neill said that it was the first time the group had left European debt markets since 1999 and was a good story for packaging with the fact that it secured funding from North American ?debt markets.
The group secured €350 million of new financing in the North American Term Loan B (TLB) markets, and launched a successful receivables securitization program alongside the TLB illustrating strong asset based lending capability.
In December 2012, ratings agency Moody's said that Clondalkin would find it difficult to refinance over €400m of debt. However, the rating agencies have now responded very positively to the refinancing, with Standard & Poor's upgrading the rating and Moody's moving to positive outlook.
Investments
O'Neil told PN that there will be more investments in new the business, especially in the pharmaceutical and healthcare division. He said there will be more opportunities to invest in new equipment, expand extrusion capacity, lamination, label leaflets, flexo packaging, shrink sleeves and labels.
He added: "There will also be a pot for acquisitive investment. The pharma and healthcare remains significant. If you want to establish a base in a new region you can do it by joint-venture or do it by acquiring facilities. The fast way in is to acquire accredited facilities."
O'Neill added: "The refinancing is a tremendous achievement for the Group and we are delighted with the outcome. Clondalkin has successfully financed its business in the public and debt markets for over 13 years; with four significant re-financings in that time, moving from the bank markets to mainly European note markets and this time the refinancing has been achieved in the Term Loan B North American markets. It reflects very well on Clondalkin's financial track record that we were able to move seamlessly from the European to the US loan markets."
Clondalkin chief executive Norbert McDermott added: "The successful refinancing gives us a lot of financial flexibility and a great base to continue our ambitious development plans. We have invested over €120m in our operations in the last three years to lay the foundation for business expansion. We will be continuing our strong focus on developing innovative packaging products and features in partnership with our customers. We have earned multiple leading market positions. We have the commitment and capability to build on these in the coming years. "
