SOUTH AFRICA – Multinational paper packaging group, Mondi Plc, will be investing US$573.12 (R8bn) in its South Africa business over the next five years.
This is part of the groups restructuring policy that was approved by Competition Tribunal as it seeks to gain full ownership of Mondi Ltd.
Mondi was given the green light to dismantle its complicated dual-listed structure, provided it fulfils conditions set by the Competition Tribunal.
The packaging group currently has a complex dual-listed structure, with a primary listing on the Johannesburg Stock Exchange (JSE) under Mondi Ltd and a premium listing on the London Stock Exchange under Mondi Plc.
The group’s senior manager of external communication, Kerry Cooper, said that the simplification will bring this into a single structure under Mondi Plc, with a premium listing on the London Stock Exchange and an inward secondary listing on the JSE.
“The simplification will simplify cash and dividend flows, increase transparency, remove the complexity associated with the current structure and enhance strategic flexibility,” said Cooper.
According to a Business Day report, the Competition Tribunal has given the go ahead for the merger on condition both parties invest “a total of R8bn (US$573.12 million) in its SA operations over a period of five years”.
The tribunal further noted that the parties will also be obliged to protect the jobs of Mondi Ltd employees by ensuring that no staff members get retrenched over the next three years.
Mondi affirmed that it will abide to the conditions, maintaining that there will be no job losses for the period while emphasising that investments of over US$573.12 million will continue in its SA operations over the next five years.
Cooper said that the company will also further “the ongoing investment in forestry assets and modernisation of the Mondi’s pulp, containerboard and paper assets in the country.”
In addition, the tribunal required that the group continue its trend of ensuring that director positions of the Mondi Plc board be occupied by at least one South African citizen at any given time.
Over the next half a decade, the group would have to support research and development by continuing to work with various institutions of higher learning that conduct scientific research, said the tribunal.
The group will also have to further the development of community programmes and small businesses through increased investments.