Citi sees higher quality in Orora's post-divestment business

Orora

04/09/2024 20:59

** Citi estimates Orora's  ORA.AX  post-divestment business
to have better margins and more stable earnings and sees the new
business to be ~9 times the current EBITDA (not adjusting for
leases)
    ** The Melbourne-based packaging firm divested on Wednesday
its North American packaging business for an enterprise value of
A$1.78 bln ($1.20 bln)
    ** Presumably the key driver of the divestment by co was to
reduce its debt, Citi says
    ** Brokerage estimates the initial target leverage from the
divestment to be ~2 times or lower, and forecasts co to prefer a
A$600-A$700 mln on market buyback
    ** Stock had risen 3.1% this year, as of last close

($1 = 1.4890 Australian dollars)

 (Reporting by Sherin Sunny in Bengaluru)
 ((Sherin.Sunny@thomsonreuters.com))