Nampak to divest liquid cartons and businesses in Zambia and Malawi

ZAMBIA/MALAWI – Nampak, a JSE-listed packaging company, has reached an agreement with a consortium led by private equity firm Corvest 15 to sell its liquid cartons business in South Africa, Zambia, and Malawi.

The selling parties, including various Nampak group companies, will transfer ownership to the buyers represented by Corvest 15, Diversified Liquid Packaging Group, and Liquid Cartons. Dlondlobala Capital will act as the fund manager of D Capital Fund 1 within the consortium.

This transaction, facilitated through multiple agreements, follows Nampak’s decision to implement turnaround initiatives, including asset disposals, to raise funds.

The disposal follows the Nampak board in August last year deciding to implement various turnaround initiatives across the group, including an asset disposal plan, to raise about R2.6-billion (US$137.31m).

The funds are expected to help the company 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 generation.

The base aggregate consideration of R450-million (US$23.77m) for the sale is being implemented on a locked-box construct with effect from October 1 last year, with consequent permitted adjustments until the effective date.

Nampak says the disposal consideration will be applied towards the settlement of debt within the Nampak group of companies.

The date for the conditions precedent to be fulfilled is September 30, including shareholder approval, for which a general meeting will be announced.

Corvest 15 is a private equity company and an indirect subsidiary of FirstRand Bank. It forms part of the Rand Merchant Bank (RMB) Corvest private equity group of companies, which was founded in 1989.

The RMB Corvest group of companies invests in established, well-managed, medium-sized businesses across South Africa and sub-Saharan Africa with a proven record of solid performance.

Dlondlobala Capital is a majority black-owned investment holding company and private equity fund manager that invests in mid-size black economic empowerment-related opportunities, buyouts and growth capital investments, predominantly in South Africa.

The current key Nampak group management members, specifically Raymond Dube and Shaun du Plessis, will become shareholders in the acquired liquid cartons business as a result of the disposal.

Nampak Liquid Cartons is a separate business division under Nampak Products. It manufactures and supplies paper liquid packaging products, including the Pure-Pak and Conipak liquid carton brands in South Africa.

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