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Consol to raise R3bn in IPO

After more than a decade in the hands of private equity groups.

South African glass bottle maker Consol aims to raise up to $300 million via an initial public offering (IPO), it said on Monday, returning the firm to public markets after more than a decade in the hands of private equity groups

The flotation, pencilled in for April 30, comes amid growing confidence among investors and business leaders that President Cyril Ramaphosa will follow through on promises to revive the economy and bring policy certainty.

Consol, bought out for R6.1 billion in 2007 by private equity investors led by Brait, said it would sell roughly a third of the company, listing between two billion shares and 468.2 million shares at between R1.50 and R6.50 each.

The number of shares to be sold will depend on the price achieved, the company said in a pre-listing statement. At the top of the pricing range, the lower volume of shares would be sold, raising about R3 billion.

There is also a greenshoe option, or an over-allotment, of as much as 114.1 million shares to underwriters.

Brait’s stock has been hammered by concerns about its biggest shareholder Christo Wiese and the performance of its British retailer New Look. The South African tycoon is tallying up losses from a share price crash in Steinhoff, a retailer in the throes of an accounting scandal.

Consol, which counts blue chips such as Anheuser-Busch InBev, Diageo and Heineken among its customers, said the listing would allow shareholders to cash in on their 11-year investment in the company and raise money to pay down debt, which includes R4.7 billion in loans from shareholders.

The company, which also operates in Kenya and Nigeria, reported a R1.6 billion in core earnings in the year to June 30 2017 on revenue of R6.1 billion.

Goldman Sachs and BofA Merrill Lynch are working on the listing, along with South African banks RMB and Standard Bank, who will market the deal to domestic investors. 

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