By Ross Kelly
SYDNEY--Brambles Ltd. (BXB.AU) said it plans to spin off its
Recall document-management business into a separately-listed
company after failing to find a buyer last year.
Brambles, which also makes wooden pallets and plastic containers
used for carting goods, said it expected the new company, Recall
Holdings Ltd., to be listed as a new entity on the Australian
Securities Exchange in December.
Brambles had been hoping to raise as much as US$2 billion from a
trade sale of the business but scrapped the process last June,
blaming challenging market conditions for offers it decided were
too low.
On Tuesday, the company forecast the unit to post underlying
profit, which strips out recurring items, for the year to June 30
ranging between US$138 million and US$142 million, down from US$174
million in the previous year.
The fall in earnings is related to "reduced transactional
customer activity" in the document-management business and weaker
selling prices for destroyed paper. The demerged company will have
about US$450 million net debt, Brambles said.
"Recall generates strong, recurring operating cash flow capable
of servicing this debt comfortably as well as funding the payment
of future dividends," Brambles said.
Write to Ross Kelly at ross.kelly@wsj.com
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