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Nigeria’s GZ Industries to buy Frigoglass glass operations for $225m

By on May 23, 2015

Greek refrigerator maker Frigoglass has agreed to sell its glass business to Nigerian aluminum can producer GZ Industries for $225 million (202 million euros) in an effort to cut debt and focus on its cooler business, it said on Friday.

Frigoglass, which sells coolers to beverage companies including Coca-Cola HBC and brewers in Europe, has been hit by volatile conditions in Europe which have hurt bottlers’ spending on refrigerators.

The company said it had agreed to divest all its glass container operations in Nigeria and Dubai and the complementary plastic crates and metal crowns businesses in Nigeria to GZI Mauritius, the holding company of GZ Industries.

“This move will substantially deleverage our balance sheet as well as allow us to focus on developing our cooler business into a new dimension,” Frigoglass CEO Torsten Tuerling said in a statement.

Frigoglass expects to complete the sale in the second half of the year and will use the proceeds to reduce its debt. All 1,588 employees at its glass operations will be transferred to the new owner, it said.

In a separate statement, Frigoglass announced a net loss of 3.9 million euros in the first quarter of the year after a loss of 3.4 million euros in the same period in 2014.

Sales dropped 3.4 percent to 120 million euros, mainly reflecting lower revenue from its Africa and Middle East operations.

Frigoglass shares have climbed 38 percent so far this year, outperforming a 2.4 percent rise for the Athens bourse’s general index.

 

[Business Day]