SOUTH AFRICA – Nampak, a JSE-listed packaging leader, recently announced a pivotal sale agreement for its Industrial & Commercial Solutions (I&CS) business, valued at R142.5 million (US$8.1m).
This decision aligns with the company’s broader strategy to divest non-core assets as it seeks to reduce its considerable debt burden.
Nampak initiated this asset disposal plan last year amid growing financial challenges due to high debt levels and operational inefficiencies in certain segments.
I&CS, focused on industrial inkjet printing, laser marking, and case coding, has been a smaller part of Nampak’s operations.
Although the buyer has not been disclosed, the funds generated from this sale are expected to help Nampak streamline its portfolio and focus more on core packaging areas such as beverage and food packaging across Africa.
This sale is also one in a series of recent disposals, including its Nigerian subsidiary in May 2024, which underscored Nampak’s strategic intent to focus on businesses that offer stronger profitability and align more closely with the company’s long-term goals.
Recently, the company sold its subsidiary, Nampak Zimbabwe Limited, to diversified local firm TSL Limited for US$25 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.
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