IPL in €50m buy-back before Canadian float
IPL Plastics yesterday announced a €50m share buyback ahead of its planned initial public offering in Toronto this summer as it attempts to appease 2,000 long-standing investors facing a dilution in the value of their investment.
The Dublin-based plastic container maker, once known as One51, remains on course for a stock exchange launch in June with a preliminary prospectus to the deal expected to be filed to Canadian regulators at the end of April or start of May.
Under the buy-back arrangement, the original shareholders in the company – mostly dairy co-operatives, farmers and wealthy individuals – will have the option of selling their shares back to IPL at the time of the IPO or trading out within six months via a grey market in Dublin. Alternatively the investors can continue to hold stock in the Canadian-listed company.
It is understood few of the Irish shareholders – Kerry CoOp ranks as the largest in this group with a 5pc holding – plan on participating in the share buy-back.
Instead it is likely they will opt to trade out in the grey market, which replicates the existing trading offering. These Class B Common Shares will not be tradeable in Canada until six months after the IPO.
Their value is expected to track the price of the freshly established Toronto-based holding company.
In a statement IPL, led by CEO Alan Walsh, confirmed it anticipates “promptly moving ahead with the potential IPO in the event that the Scheme is approved by shareholders”.
The IPO will generate about €125m but will dilute existing shareholders’ stakes.
Currently the Irish investors control 57pc of the company, which will reduce to 45pc. Canadian investors, Caisse de depot et placement de Quebec (CDPQ), and Fonds de Solidarite des Travailleurs du Québec, will see their stakes watered down from 43pc to about 34pc.
However it is understood shareholders are broadly supportive of the IPO plans.
The move to list in Canada follows a corporate shake-up, which resulted in the Canadian heavyweight investors swapping their combined 33pc holding in the former IPL operations company for a total 22pc additional holding in One51.
The company has beefed up its borrowing capacity, announcing a new five-year syndicated loan facility that combines a €110m term loan, with a €290m revolving credit facility. The loan agreement also contains a mechanism allowing IPL to seek increases of the revolving facility commitments by an aggregate maximum amount of €100m. The funds have been provided by a group of banks led by Bank of Ireland and National Bank Financial.