Global packaging supplier Linpac Packaging (Birmingham / UK; www.linpacpackaging.com) is undergoing a debt restructuring deal that will see it controlled by a consortium of six banks. After six years of ownership, the investment of Montagu Private Equity (London / UK; www.montagu.com) will be completely wiped out. The new lenders will reduce Linpac’s estimated debt of GBP 600m (EUR 660m) by half, injecting some GBP 60m into the business. The debt for equity swap has three components, the "Reuters" news agency says, and is expected to be completed before the start of 2010.

The new ownership will strengthen Linpac’s financial structure, giving it a more appropriate banking operation for current market conditions, which have led to a significant drop in business for the company at a time of higher energy costs and feedstock price volatility. The financial restructuring does not affect Linpac’s day-to-day operations or its customers, but should reinvigorate its balance sheet and provide greater scope for capital expenditure. More investment in PET processing and increased activity in the use of recycled PET (rPET) are likely targets.

Montagu bought Linpac from its family owners in 2003 for GBP 860m – see Plasteurope.com of 03.07.2003. It recouped some 80% of its investment in 2007 through a recapitalisation. Linpac has annual revenues of GBP 1.1 bn, with over 8,000 employees based at 90 locations.