ZIMBABWE – South African packaging group Nampak Limited has sold its subsidiary, Nampak Zimbabwe Limited, to diversified local firm TSL Limited for US$25 million.
This move is part of Nampak’s asset disposal strategy aimed at reducing its debt burden.
In August 2023, Nampak announced plans to raise approximately ZAR 2.6 billion (US$148 million) over 18 months by selling non-core assets.
The company’s annual report for the year ending September 30, 2023, revealed a net debt of ZAR 5.2 billion (US$296.2 million).
The sale of its Zimbabwean operations comes despite Nampak’s previous statement in June that the local unit was performing well despite challenging economic conditions.
Nampak’s 51.43% stake in Nampak Zimbabwe Limited, which manufactures paper, plastic, and metal packaging products, was valued at ZAR 292.5 million (US$16.66 million) as of September 30, 2023.
“The company, through its wholly-owned subsidiary, Nampak Southern Africa Holdings Limited, has accepted a binding offer from TSL Limited for the acquisition of its 51.43% shareholding in Nampak Zimbabwe Limited, for a maximum consideration of US$25 million,” the group stated.
As per the agreement, US$23 million will be paid within ten business days following the fulfilment of all conditions, with the remaining US$2 million payable in two equal tranches of US$1 million over the next two years.
The transaction will be settled in U.S. dollars, reducing Nampak’s exposure to the volatile Zimbabwean economy and contributing to debt reduction.
The sale is subject to regulatory approvals, including clearance from the Zimbabwe Competition and Tariff Commission and exchange control authorities.
Additionally, Nampak will extend an offer to the remaining shareholders of Nampak Zimbabwe Limited in compliance with the Companies and Other Business Entities Act and Zimbabwe Stock Exchange listing rules.
This sale marks a significant step in Nampak’s ongoing turnaround strategy, helping the company reduce debt while exiting a challenging market.
Meanwhile, last month, RMB Corvest, in partnership with Dlondlobala Capital, completed a management buyout (MBO) of Nampak Liquid Cartons, a division of Nampak Products Ltd.
This deal also includes Nampak’s operations in Zambia and Malawi.
Nampak Liquid Cartons specializes in manufacturing and supplying paper-based beverage packaging solutions, including Pure-Pak and Conipak (conical) cartons.
The company’s primary markets are South Africa and Zambia, with Malawi representing a smaller portion of the business.
Following the buyout, the business will become part of the newly formed Diversified Liquid Packaging Group (DLP Group) and retain its existing operations and staff.
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