05/26/2015

Nampak delivers on its strategic objectives

Nampak announced a series of transactions to deliver on its strategic objective to unlock further value from its base business, as well as progress on its objective to accelerate growth in the rest of Africa.

These include:

-The completion of the sale of the Corrugated and Tissue divisions to Ethos Private Equity, for R1.53 billion which will be effective on 1 April 2015.

-Agreement on the sale of Nampak Recycling, also to Ethos Private Equity, for R76.3 million.

-Agreement to sell Nampak Flexible to Amcor for a maximum target price of R300 million.

-The signing of a memorandum of understanding (MOU) with a project developer for a majority stake in a proposed greenfield glass furnace in Ethiopia.

Nampak, Africa’s leading diversified packaging manufacturer, announced in November 2014 that it had agreed to sell its Corrugated and Tissue divisions to Ethos Private Equity. Following unconditional approval by the Competition Tribunal, the sale of these divisions will take effect on 1 April 2015 and will yield R1.53 billion.

As an important provider of raw material to the Corrugated and Tissue divisions, Nampak Recycling was in a subsequent transaction sold to Ethos for R76.3 million subject to approval by the competition authorities. The sale is expected to be completed early in the second half of 2015.

In a further sale of a low margin business, Nampak reached agreement with Amcor for the sale of its Flexible division for a maximum target price of R300 million. The transaction is subject to approval by the competition authorities.

Nampak CEO André de Ruyter said: “The disposal of these businesses forms part of Nampak’s portfolio optimisation strategy to unlock cash from low-margin divisions and redeploy it into high-yield and high-growth opportunities in the rest of Africa.”

In line with this strategy Nampak has concluded an MOU for a majority stake in a proposed greenfield glass furnace in Ethiopia, some 120 kilometres north of the capital Addis Ababa. “This project has the potential to meet significant glass demand in the fast growing Ethiopian beer market,” said de Ruyter. “To date, the land for the works has been secured on a long-term lease and a source of sand has been identified. We are excited about this project and are working hard to firm up the business case.”

Source: Nampak/nampak.com