Reynolds Group Holdings, owned by New Zealand's richest man, Graeme Hart, is another step closer to its acquisition of Pactiv Corporation after it successfully completed a private placement of US$3 billion of debt.
Proceeds from the placement, which included US$1.5 billion ($2 billion) of 7.125 per cent senior secured notes due in 2019 and US$1.5 billion of 9 per cent senior notes due in 2019, will now be held in escrow until the acquisition is finalised.
A special meeting of Pactiv stockholders will be held on November 15 to consider and vote on the proposal to merge with Reynolds Group.
In addition to obtaining Pactiv stockholder approval, all other closing conditions in the merger agreement must be satisfied or, to the extent permitted, waived before the consummation of the Pactiv acquisition, a statement from Reynolds Group said.
Reynolds Group intends to use the proceeds of the private placement to help to partially finance its US$6 billion purchase of Pactiv, known as the maker of Hefty rubbish bags.
Reynolds Group has also borrowed US$2 billion to help to pay for its acquisition of Pactiv and will use about US$734 million in equity and cash.
The company's statement said that in the event the deal did not go ahead, the money would be returned to investors along with any accrued and unpaid interest.
- Staff reporter
Hart's group step closer to Pactiv merger, with vote next month
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