SOUTH AFRICA – The international packaging and paper group Mondi has announced that it plans to dump its dual listing structure for a primary listing in London, reports IOL Business.
The company which operates in the consumer packaging business said it would move its primary stock to London but would retain a secondary listing on the JSE as part of a move to simplify its business.
According to Mondi, the move was part of a process to simplify its cash and dividend flows that it has had since it was established in 1967 when former owners Anglo American built the Merebank mill in South Africa.
As part of the simplification process, London-listed Mondi plc shareholders would acquire JSE-listed Mondi Limited on a one-to-one share basis.
The streamlining of the corporate structure would facilitate continued investment in the South African operations, estimated at more than US$580.47 million over the next five years, said the group.
The simplification will also enhance strategic flexibility, increase transparency and remove the complexity associated with the current structure.
“Our strategy of delivering value accretive growth focused around innovative and sustainable packaging and paper solutions remains unchanged,” said the group.
Mondi has roots in South Africa but has evolved to more than 100 sites in more than 30 countries with 90% of its underlying earnings now generated outside of South Africa.
Chief executive Peter Oswald said the despite the decision to abandon dual listing, the company remained fully committed to South Africa with local operations contributing to the group’s industry-leading performance.
“The proposed simplification is a natural step to remove the complexities around our structure and make our corporate framework more efficient,” Oswald said.
Mondi has been considering an appropriate structure of its business to ensure future profitability.
Last year, the company which was formerly organised into the two regions of Europe and International and South Africa reorganised its portfolio into four global divisions: packaging paper, fibre packaging, consumer packaging and uncoated fine paper.
The simplification will not result in any changes to the management, operations, locations, activities or staffing levels of the Mondi Group.