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Nampak will sell its 51.43% holding in Nampak Zimbabwe to Zimbabwe Stock Exchange-listed TSL for $25m (about R438m), the packaging group said on Wednesday.
The sale was in accordance with its asset disposal plan, would contribute to the reduction of the group’s net debt and eliminate the associated risk and volatility of the Zimbabwean economy, Nampak said.
The proceeds would be applied towards the further settlement of debt.
The transaction is subject to some conditions, including approval by TSL’s shareholders and the granting of regulatory approvals.
Nampak Zimbabwe manufactures paper, plastic, and metal packaging products and forms part of the Nampak group of companies.
The book value of Nampak’s 51.43% share of the net assets of Nampak Zimbabwe at end-September was R292.5m.
The audited profit after tax attributable to Nampak’s share of Nampak Zimbabwe for the period to end-September 2023 was R84.8m.
In terms of the Companies and Other Business Entities Act and the Zimbabwe Stock Exchange listings rules, the purchaser is required to make a mandatory offer to the remaining shareholders of Nampak Zimbabwe following the disposal being implemented.
TSL has confirmed that it has the capacity to undertake the mandatory offer within the regulated time frames, through settlement by either cash or by way of a share swap using its own shares. The mandatory offer will be implemented by TSL independently, following the implementation of the disposal and without any involvement of Nampak.
Earlier in October Business Day reported that Nampak said it successfully concluded its refinancing with Standard Bank in September, having met the deadline by its lenders to return R720m in net debt from disposals by the end of the same month.
The company said this had resulted in a significantly simplified funding structure, with only a minor foreign debt component.
The packaging supplier for companies ranging from Coca-Cola to Tiger Brands has been battling to claw its way out of a mammoth R5bn debt hole it fell into during its ill-fated expansion in Africa.
Since 2023, under CEO Phil Roux, the group has implemented a comprehensive turnaround plan, including board and management changes, a business model review, a capital and debt restructuring programme, a rights offer and a new strategy focused on its core metals business.
It has achieved its previously set out lender requirement to repay R720m of net debt from disposals by end-September by using the proceeds from the disposals of the Liquid Cartons businesses in SA, Nampak Zambia, Nampak Malawi and Rigid Plastic SA.
The Johannesburg-based company has also exited Nigeria, where forex losses were particularly acute as the naira depreciated sharply against the dollar, resulting in a surge in costs for raw materials funded in the US currency. The Nigerian Federal Competition and Consumer Protection Commission’s approval is the final requirement needed to complete the sale.
Nampak’s annual results are expected to be released on December 2.
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