A business called Tapperware Bottling (Pty) Ltd (Tapperware) is a company that specialises in producing plastic water bottles A group of young businesspeople who identified the potential of the South African bottled water market founded Tapperware in 2009. Well-known water corporations are only one of the many clients Tapperware serves. It has quickly grown and can now supply its goods over the entire nation.

Tapperware has a 30 June financial year end. Tapperware has focused solely on producing goods made of plastic. Plastic is a very adaptable material that can be molded into many sizes, forms, and configurations for differing degrees of strength. Plastic has become the standard packaging medium for alcoholic beverages, foods, and other goods due to its adaptability. The production of plastic bottles occurs in phases and uses a variety of components. Plastic bottles have traditionally been made primarily of petroleum, making the input costs vulnerable to changes in oil prices.

Plastic products are thought to be wasteful and unfriendly to the environment. Despite the fact that the majority of plastic products can be recycled, very few are. One of the biggest global garbage producers is plastic nowadays. Recent years have seen the introduction of bioplastic production as a potential remedy for this issue by producing low-cost, long-lasting, and eco-friendly plastic goods. Corn, rice, and potatoes are just a few of the plant-based materials used to make bioplastics. Within three months, the bioplastic products can be organically degraded. It is anticipated that as consumer demand for environmentally friendly packaging items rises, so will the demand for bioplastic packaging.

The need for the production of bioplastics has also been driven by the rise in the price of oil and the necessity for businesses to reduce their carbon footprint. The management team of Tapperware recently committed to reviewing its environmental, social, and governance (ESG) policy on a regular basis during a strategic planning session. As part of this program, it was determined that investments should attempt to have wider social and environmental consequences than merely financial performance.

Tapperware is financed by a combination of debt and equity, and it long-term targets a debt ratio of 40%. Regarding Tapperware s current debt finance, the following details: For the previous two fiscal years (FY2021 and FY2022), ordinary dividends had not been paid because to the Covid-19 outbreak and associated problems with financial performance. As the business's performance improves, dividend payments are anticipated to resume by the end of FY2024, at which point all back dividends will have been paid.

Najimy, a beverage multinational with operations in China, recently approached Tapperware with an offer to buy 70% of the company's ownership. Although Tapperware has not yet received the complete offer's details, it has made the proactive decision to analyse the dangers of being purchased by a foreign organisation in order to prepare for this potential takeover.

REQUIRED Describe the key risks and considerations that Tapperware would face if acquired by Najimy. (20 marks)