Nampak to sell Liquid Cartons unit in SA for R450m
Nampak, which is valued at R1.3bn on the JSE, says the deal will help to reduce its debt
26 March 2024 - 12:03
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The Nampak group has announced plans to dispose of its liquid cartons business in SA for R450m, making headway in its asset disposal plan to raise R2.6bn to settle its debt.
As part of the deal, the industrial packaging group will also dispose of the issued shares of Nampak Zambia and Nampak Malawi to a consortium that is represented by Corvest 15 and Dlondlobala Capital.
The transactions, subject to shareholder and regulatory approvals, form part of Nampak’s turnaround strategy. It is seeking to shift from being a conglomerate to a business that is more focused on specific packaging operations delivering a higher quality of earnings, reduced risk and improved cash-generative ability, it said.
Nampak, which is valued at R1.3bn on the JSE, said on Tuesday the deal would help to reduce its debt, which has resulted in Nampak’s share price plunging 93% in the past five years.
In line with the criteria in the new funding package, Nampak CEO Phil Roux told shareholders at the group results presentation in December that it was required to raise R2.7bn through asset disposals in the next 18 months to repay interest-bearing debt.
Nampak Liquid Cartons is a separate business division under Nampak Products which manufactures, sells and supplies paper products used to package liquids, including Pure-Pak and Conipak liquid cartons, in SA.
Nampak Zambia manufactures sells and supplies conical cartons, while Nampak Malawi receives semi-processed conical cartons from Nampak Zambia for processing into a saleable product as well as delivering marketing services for the direct sale of tobacco cases and corrugated cartons by Nampak Zimbabwe, in Malawi.
According to Nampak the value of the net assets included in the deal as of end-September was R399m, while the audited profits after tax attributable to the assets that are the subject of the disposal was R104m.
The transaction will also see key Nampak Group management members Raymond Dube and Shaun du Plessis become shareholders in the acquired liquid cartons business as a result of the disposal.
The move is the latest in Nampak’s bid to simplify and optimise operations by addressing nonperforming operations and rationalising product offerings, as it has been labouring under a R5.2bn debt pile that it racked up after its ill-fated expansion into the rest of Africa.
The group raised R1bn from its shareholders in September after its rights offer was oversubscribed.
Nampak shares were trading 3.68% higher at R167 on Tuesday morning.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Nampak to sell Liquid Cartons unit in SA for R450m
Nampak, which is valued at R1.3bn on the JSE, says the deal will help to reduce its debt
The Nampak group has announced plans to dispose of its liquid cartons business in SA for R450m, making headway in its asset disposal plan to raise R2.6bn to settle its debt.
As part of the deal, the industrial packaging group will also dispose of the issued shares of Nampak Zambia and Nampak Malawi to a consortium that is represented by Corvest 15 and Dlondlobala Capital.
The transactions, subject to shareholder and regulatory approvals, form part of Nampak’s turnaround strategy. It is seeking to shift from being a conglomerate to a business that is more focused on specific packaging operations delivering a higher quality of earnings, reduced risk and improved cash-generative ability, it said.
Nampak, which is valued at R1.3bn on the JSE, said on Tuesday the deal would help to reduce its debt, which has resulted in Nampak’s share price plunging 93% in the past five years.
In line with the criteria in the new funding package, Nampak CEO Phil Roux told shareholders at the group results presentation in December that it was required to raise R2.7bn through asset disposals in the next 18 months to repay interest-bearing debt.
Nampak Liquid Cartons is a separate business division under Nampak Products which manufactures, sells and supplies paper products used to package liquids, including Pure-Pak and Conipak liquid cartons, in SA.
Nampak Zambia manufactures sells and supplies conical cartons, while Nampak Malawi receives semi-processed conical cartons from Nampak Zambia for processing into a saleable product as well as delivering marketing services for the direct sale of tobacco cases and corrugated cartons by Nampak Zimbabwe, in Malawi.
According to Nampak the value of the net assets included in the deal as of end-September was R399m, while the audited profits after tax attributable to the assets that are the subject of the disposal was R104m.
The transaction will also see key Nampak Group management members Raymond Dube and Shaun du Plessis become shareholders in the acquired liquid cartons business as a result of the disposal.
The move is the latest in Nampak’s bid to simplify and optimise operations by addressing nonperforming operations and rationalising product offerings, as it has been labouring under a R5.2bn debt pile that it racked up after its ill-fated expansion into the rest of Africa.
The group raised R1bn from its shareholders in September after its rights offer was oversubscribed.
Nampak shares were trading 3.68% higher at R167 on Tuesday morning.
gumedemi@businesslive.co.za
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