Unrelenting in its pursuit to acquire Mpact, Caxton said it is concerned by the debt levels at the industrialist group — where the publisher already commands a 34% stake — announcing it is pursuing a challenge on aspects of the packaging manufacturers corporate governance.
Early in March Mpact reported its net debt of R2.33bn had increased from the R1.76bn of 2021 mainly owing to cash outflows in respect of capital expenditure investments of R1bn, as well as increased working capital. Caxton has had its sights on Mpact for years but negotiations over a full takeover have failed, leading to a legal battle.
Caxton, which has a R3.5bn market capitalisation, has alleged Mpact is soliciting support from Golden Era to oppose its merger and that it filed “secret representations” and affidavits with competition authorities. Labelling the input cost increases as “unprecedented”, Caxton said the local and international paper and board mills were oversubscribed and access to supply was limited, combined with increased freight rates.