MELBOURNE, AUSTRALIA — The merger of two Australian-based bioplastics companies will go ahead after shareholders of the listed entity voted overwhelmingly in favor of the proposal.
The merger creates a company with annual sales of US$21 million.
The vast majority of shareholders of Melbourne-based, publicly listed Cardia Bioplastics Ltd. agreed to seven resolutions that facilitate the merger with Melbourne-based privately held Stellar Films Group Pty. Ltd. These include a name change to Secos Group Ltd.; and a plan to raise US$2.4 million to fund future growth and provide working capital.
Cardia CEO Frank Glatz told Plastics News response to the merger was “very positive.” The positive vote came despite an independent financial analysis of the merger saying it was “not fair” for Cardia's shareholders, however, it was “reasonable.”
The merger includes the 50.8 percent share of Akronn Industries Sdn. Bhd. that was owned by Stellar. Akronn manufactures silicone-coated paper and film products in Nilai, Malaysia.
Glatz said Secos will be the holding company name, but business brands Cardia Bioplastics, Stellar Films and Akronn will remain.
Cardia Chairman Richard Tegoni said both Cardia and Stellar have experienced challenges in recent years: Stellar restructured to accommodate changes in traditional plastic films manufacturing, and Cardia invested heavily in developing technology “designed to capture the growing demand for more sustainable and environmentally preferred plastic products.”
Tegoni said the merged business will be able to manufacture its own proprietary resins to supply to the group's business units that make plastic films.
“[Our] early focus will be to ramp up production at Stellar's Deer Park cast film plant [near Melbourne] …,” he said. “This will provide an opportunity to increase sales in the short term because the Deer Park plant is underutilized,” he said.
Glatz told Plastics News Secos Group will get a new headquarters. “We are currently evaluating options,” he said. Cardia's office and warehouse in the Melbourne suburb of Mulgrave will close.
Tegoni said Cardia's Biohybrid cast films, produced on Stellar's large-scale cast film production lines, will be well received by customers.