(Reuters) – Europe’s biggest plastics packager RPC Group Plc <RPC.L> will raise $95 million(74.49 million pounds) 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 pressure from investors was preventing it from pursuing some growth opportunities, with analysts saying the company had disappointed on expectations it would launch a share buyback.
That followed a 12 percent slide in shares on June 6 when investors reacted strongly to an announcement 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 it was selling Letica Corp’s food-service packaging business to Graphic Packaging <GPK.N> debt free, but 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 in a separate statement on Tuesday.
RPC also said it had bought PLASgran Ltd, a recycler of rigid plastics in the UK, for 34.5 million pounds and said it was marketing a Scottish spirits closures business based in Bridge of Allan to interested parties.
(Reporting by Muvija M in Bengaluru; Editing by Patrick Graham)