PaperlinX announced recently announced that it has entered into the following agreements:
- to sell its operations in Slovakia, Hungary, Slovenia, Croatia and Serbia to the Heinzel Group for EUR 19.6 million. The sale price represents a multiple of approximately 10x EBITDA and is A$2m above book value. Net proceeds after debt and transaction costs are expected to be approximately EUR17.5m (A$21m);
- to sell its loss-making operations in South Africa to local management. Net proceeds of ZAR50m (A$6m) will include A$3m repayment of parent company funding and A$3m purchase consideration for the shares, representing a loss of approximately A$2m against book value.
Commenting on these transactions, PaperlinX CEO, Toby Marchant said: "After the sale of five smaller European businesses and the consistently loss-making South African business announced today, our remaining businesses all operate in sizable markets with significant market positions. All have growth opportunities in diversified products and are the focus of the previously announced restructuring activities. We can now direct our limited resources to these challenges and opportunities whilst at the same time ensuring that we have sufficient liquidity both regionally and for the Group."
Toby Marchant concluded: "We have reached a major turning point in the transformation of PaperlinX, and the Board and I have agreed that it is an opportune moment for me to step down as Chief Executive. I will therefore be leaving the Company at the end of July. I am doing so knowing that we have taken major strides towards dealing with our significant legacy issues, in the midst of exceptionally hostile conditions, and that we are now on the right path. This is entirely thanks to the excellent people in PaperlinX who have shown extraordinary courage and determination in overcoming the challenges of the last few years."