Europe's biggest plastics packager, RPC Group Plc, will raise $95 million from the sale of its Letica food-packaging business, it said on Tuesday, after facing months of pressure from investors to raise more cash and cut capital spending.
Shares of UK-based RPC fell sharply last month, after the company said that pressure from investors was preventing it from pursuing some growth opportunities, with analysts saying that the company had disappointed on expectations that it would launch a share buy-back.
Share Price Slide
That followed a 12% slide in shares on 6 June, when investors reacted strongly to an announcement that the company was stepping up investment to take advantage of strong demand in China.
RPC, which has spent over $1.5 billion on acquisitions in the past two years, had said in July that it would prioritise the proposed disposal of some non-core assets, as it looks to generate capital for expansion, or to return money to shareholders.
The company said on Tuesday that it was selling Letica Corp's foodservice packaging business to Graphic Packaging debt-free, but it would be settling a $7.5 million earn-out, payable to former shareholders of Letica under the sale.
Letica Foodservice, a non-core asset for RPC, produces cups and cartons used by fast-food restaurants and coffee shops, and generated $110 million in revenue last year, Graphic Packaging said via a separate statement on Tuesday.
RPC also said that it had bought PLASgran Ltd, a recycler of rigid plastics in the UK, for £34.5 million, and said that it was marketing a Scottish spirits closures business based in Bridge of Allan to interested parties.