27th Jul 2009 07:00
27 July 2009
Rexam plc
Statement re press coverage
Rexam plc notes recent press coverage regarding a possible issue of new equity by the Company. It confirms that although trading conditions in recent months have shown no upturn from the first quarter, Half-Year results to be announced on 30 July will at least meet market expectations. Covenant headroom remains comfortable, with net debt to ebitda of 2.6 times at the half year and well below the principal debt covenant of 3.5 times.
With the Board now seeing no upturn in current trading conditions through 2009, management has launched a number of significant cost saving initiatives and is considering others which, with those already announced, will have a material benefit on Rexam's performance in 2010. However the absence of upturn will reduce Rexam's ability to generate significant free cash flows to pay down debt in 2010.
The Board has consequently concluded that the risk of a downgrade to sub investment grade has significantly increased and has now become unacceptably high. The loss of investment grade credit rating would be detrimental to the Group, both in terms of the cost and the availability of future credit. Accordingly the Company is considering a number of options including an equity raising. No final decision on any course of action has been taken and the Company will update the market as appropriate.
Enquiries
Rexam
David Robbie, Finance Director +44 20 7227 4100
Sandra Moura, Head of Investor Relations
Financial Dynamics
Andrew Lorenz, Susanne Yule +44 20 7269 7291
Notes to Editors
Rexam is the No 2 global consumer packaging company. It is the leading global beverage can maker, and a major global player in rigid plastic packaging. Our vision is to be the leading global consumer packaging company. We are business partners to some of the world's most famous and successful consumer brands as well as young, entrepreneurial start-ups. We offer a broad range of packaging services and solutions for different industries, using different materials and technologies. Three things characterise us - leadership in our industry, our commitment to innovation and our passion to deliver exceptional value. Rexam's sales from ongoing operations are in the region of £4.6 billion. We employ some 24,100 people in more than 20 countries and are a member of the FTSE 100. Rexam's ordinary shares are listed with the UK Listing Authority and trade on the London Stock Exchange under the symbol REX. For further information, visit Rexam's website at www.rexam.com
Related Shares:
REX.L