SOUTH AFRICA – South African investment company Brait, has gone back to the drawing board and revived plans of listing its glass packaging business, Consol Glass on the Johannesburg Stock Exchange (JSE).
This was revealed by parties close to the entity, according to reports by Reuters, indicating that the planned exit of Brait from Consol comes three years after a failed attempt of an initial public offering (IPO) three years ago.
In 2018 the consortium, which also includes the private equity arm of insurer Old Mutual and Sanlam, wanted to sell roughly a third of Consol to raise R3 billion, or around US$250 million at the time after a depreciation in the value of the rand. That would have valued the entire company at around R10 billion.
The private equity investors pulled the planned 2018 listing in Johannesburg citing challenging market conditions.
Brait took Consol, which describes itself as sub-Saharan Africa’s largest glass manufacturer, in 2007 for R6.1 billion, worth around US$1 billion at the time.
Its interest in the company is held via its Brait Fund IV, which has a 29.7% stake in Consol.
They have now appointed banks to advise them in their latest attempt at an exit, two sources, one directly involved in the discussions and another familiar with the matter, told Reuters.
The options on the table include a second shot at an IPO, the source directly involved said, but declined to give any further details.
Consol, which counts blue-chip companies including brewing giants Anheuser-Busch InBev and Heineken among its clients, said in a statement its policy was not to comment on speculation but that it would advise all stakeholders accordingly in the event that any future IPO or change of ownership is concluded.
According to the reports, Britain’s Barclays is one of the banks that is working with the consortium, both sources said.
The second source familiar with the talks said the investment banking arm of local lender FirstRand, RMB, had also been appointed.
The planned listing comes at a time the glass maker has re-embark on its R1.5 billion (US$106.69m) investment in a new factory which was indefinitely put on hold last year, due to the reduction in demand for glass products driven by the Covid-19 pandemic and government’s ban on the sale of alcohol.
The company had commenced construction of the new plant, located in Ekurhuleni, Gauteng, targeted to add 130,000 tons of glass production to its glass’s capacity.
The expansion will require additional locally sourced raw materials including silica, lime, feldspar and cullet (recycled glass), thus supporting new investments in the mining industry.