Nampak will sell its 51.43% stake in Nampak Zimbabwe to Zimbabwe Stock Exchange-listed TSL for $25 million (approximately R438 million), the packaging group announced Wednesday.
The sale is in line with its asset divestment plan, will contribute to the reduction of the group’s net debt and will eliminate the risk and volatility associated with the Zimbabwean economy, Nampak said.
The transaction is subject to certain conditions, including TSL shareholder approval and the granting of regulatory approvals.
Nampak Zimbabwe manufactures packaging products in a variety of materials, including metal, and is part of the Nampak group of companies.
The carrying value of Nampak’s 51.43% interest in the net assets of Nampak Zimbabwe at the end of September was R292.5 million. The audited profit after tax attributable to Nampak’s interest in Nampak Zimbabwe for the period ended end September 2023 was R84.8 million.
In accordance with the Companies and Other Business Entities Act and the listing rules of the Zimbabwe Stock Exchange, the purchaser is required to make a mandatory offer to the remaining shareholders of Nampak Zimbabwe following the implementation of the divestment.
TSL has confirmed that it has the ability to implement the mandatory offer within the regulated timeframe, by payment in cash or by way of a share exchange using its own shares. The mandatory offer will be implemented by TSL independently, following the implementation of the divestment and without the participation of Nampak.
In early October, Business Day reported that Nampak had successfully completed its refinancing with Standard Bank in September, having met the deadline set by its lenders to repay R720 million in debt net of divestments by the end of the same month.
The company stated that this resulted in a significantly simplified financing structure, with only a minor foreign debt component.
The supplier of packaging to companies ranging from Coca-Cola to Tiger Brands has been struggling to dig itself out of a massive R5 billion debt hole it fell into during its ill-fated expansion into Africa.
Since 2023, under the leadership of CEO Phil Roux, the group has implemented a comprehensive turnaround plan, which includes board and management changes, a business model review, an equity and debt restructuring program, a rights offering and a new strategy focused on its core metals business.
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