Brambles Takes US$243.8 Million Charge, Plans Sale of North America Business
August 10 2017 - 8:35PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Packaging and containers supplier Brambles
Ltd. (BXB.AU) said it will sell its recycled pallets business in
North America, leading it to book a US$243.8 million impairment
charge.
The decision to sell the CHEP Recycled business, which supplies
and recycles more than 90 million pallets a year in Canada and the
U.S., stems from a strategic review that highlighted the operations
aren't a core part of Brambles and that they haven't delivered the
financial returns needed to generate sustainable shareholder value,
Chief Executive Graham Chipchase said Friday.
The business could be operated with a lower cost structure under
new ownership, where its overall returns and growth outlook are
more likely to improve, Mr. Chipchase added.
Brambles plans to focus on supply chain logistics based on the
providing reusable pallets, crates and containers, and it plans to
retain CHEP Recycled facilities that help with the repair and
recovery of the company's pooled pallets, the company said.
The company will seek to sell 80 plants and pallet management
sites, and about 2,200 employees will transfer to new ownership
with a sale. It will hold on to 73 pooled pallet-service centers
that are currently managed by CHEP Recycled, with about 1,400
workers remaining with the company, it added.
The non-cash impairment charge will be recognized in the fiscal
2017 accounts.
Brambles picked up its U.S. recycled pallet business as part of
the acquisition of IFCO Systems in March 2011, and bought the
Canadian recycled whitewood business, Paramount Pallet, in November
2011.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
August 10, 2017 20:20 ET (00:20 GMT)
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