Reynolds Group Holdings (Auckland / New Zealand; www.reynoldsgroupholdings.com), the debt-ridden plastics and packaging empire bought up and put together by New Zealand billionaire Graeme Hart in the 2010s, evidently needs further funds urgently. Corporate bonds which – as announced in July 2020 – are to be issued against packaging subsidiary Graham Packaging (York, Pennsylvania / USA; www.grahampackaging.com) are to bring some USD 1.9 bn (EUR 1.6 bn) into the cash-strapped corporate coffers. Graham Packaging is rated as an “unrestricted subsidiary” in conjunction with this announcement. The group points out that this will in future allow easier “legal separation” of the two companies. The sale of Graham Packaging, which after an 8% fall in sales is now only worth USD 1.92 bn, no longer seems to be off the table.

Graham Packaging’s sales – totalling USD 2.5 bn at their peak – have seen a continuous decline. Its use of recycled plastics leaves room for improvement. With consumption of around 475,000 t of virgin plastics in 2019, including 270,000 t of PET and 205,000 t of HDPE, only around 35,000 t of post-consumer recyclate (PCR) were used. While the company’s recycling activities in the US produce about 19,000 t of primarily HDPE, its regranulation of production scrap generates around 8,000 t. The company’s 2019 sustainability report says it used 56% more recyclate, which is offset by the fact that this accounts for a mere 3.6% in terms of the total PET it processed. For HDPE, the situation is somewhat better, with a 12.6% share. Its target is to incorporate an average PCR content of 20% in its products by 2025.

The Graham “refinancing” is not the first billion-dollar injection for Reynolds. With the IPO of its second-largest division Reynolds Consumer Products (RCP, Lake Forest, Illinois / USA; www.reynoldsconsumerproducts.com) at the start of this year, it has already raised a total of USD 1.23 bn (see Plasteurope.com of 28.01.2020). Investor Cerberus Capital Management (New York, New York / USA; www.cerberus.com) also acquired shares in caps and closures manufacturer Closure Systems International (CSI, Memphis, Tennessee / USA; www.csiclosures.com) in December 2019 (see Plasteurope.com of 23.10.2019). Cerberus purchased the company’s activities in Costa Rica, Japan and the US, including the plants there, for around USD 615m. In addition, carton packaging and filling machinery manufacturer SIG Combibloc (Neuhausen / Switzerland; www.sig.biz) went to the Onex investment group in 2014.

Figures for 2019 show that Reynolds subsidiary Pactiv (Lake Forest, Illinois; www.pactiv.com) generated sales of USD 3.7 bn – down 2% on the previous year. EBITDA at the food service packaging manufacturer rose 9% to EUR 619m. Evergreen Packaging (Memphis, Tennessee; www.evergreenpackaging.com) generated sales of USD 1.6 bn as in the previous year. Evergreen, where the focus is on paper and cardboard packaging, saw EBITDA slump 13% to USD 201m.