Nampak, burdened by debt, has entered into a deal with Twinings Ovaltine to sell the property and equipment of its now closed Nigeria metals business for NGN7.50bn (R180m), as part of its efforts to streamline operations and reduce its debt burden.
- The Nigeria metals business, which ceased operations on July 31 due to subdued demand for its metal can products, previously contributed 1.47% to Nampak’s revenue. The book value of the Nigeria property and equipment is approximately R29m.
- The disposal of the assets will enable Nampak to focus on its remaining portfolio and reduce its interest-bearing debt, according to the company.
- Nampak, a plastic, paper, and metals packaging manufacturer with a market capitalization of R753m, is battling a debt pile of R5bn resulting from its unsuccessful expansion into the rest of Africa. The company is implementing cost-cutting measures, including job cuts, salary freezes, and reduced overtime, to address its cash crunch.
- As part of its turnaround plan, Nampak is divesting from Ethiopia, Kenya, Tanzania, and its general metals business in Nigeria. The company aims to generate up to R250m in cash through these sales to reduce its debt.
- Nampak’s debt refinancing package, which includes the rights offer and asset disposal plan, has been agreed upon to address its financial challenges.
- In addition to the Nigeria metals business, Nampak recently reached an agreement to sell a property in its Tanzanian manufacturing business to Canda T Investment for $5.5m (R109m).
Nampak’s ongoing asset disposals and focus on reducing debt demonstrate its commitment to improving its financial position and optimizing its operations. By divesting non-core assets and streamlining its portfolio, the company aims to strengthen its balance sheet and regain stability in a challenging market environment.