Nampak says lenders have relaxed debt covenants
The packaging manufacturer says it is at risk due to the weakening rand
Nampak has agreed to new terms with lenders due to the threat posed by a weaker rand, which breached R18/$ for the first time on Monday.
Africa's largest diversified packaging manufacturer's net debt to earnings before interest, taxation, depreciation and amortisation (ebitda) has been relaxed to 3.5 times from three times, with effect for its six months to end-March, due to the threat of a weaker rand and delays from proceeds from recent sales of assets.
The group had about R5.7bn in net borrowings as of its year to end-September, and is using recent sales to focus on its dollar-denominated debt, payments of which are under threat from a weaker rand.
The group's debt levels compare unfavourably with its market capitalisation of R848m as of Monday morning.
Nampak said in September that it had agreed to sell its glass business to Isanti Glass 1, an entity made up of a black-owned investment company and a local subsidiary of beer-maker AB InBev, for about R1.5bn. This is scheduled be received on March 31.
The group has also sold its Cartons Nigeria, and proceeds of €29m (about R572m) had been received offshore, the group said.
In afternoon trade on Monday, Nampak's share price was up 0.81% to R1.24, having lost 81.84% of its value so far in 2020. Over the same period of time, the JSE has fallen about 24%.