Nampak terminates $25m sale of Zimbabwean unit

Nampak has announced the termination of its deal to sell its 51.43% stake in Nampak Zimbabwe to TSL for up to $25 million (R435 million). The transaction, initially announced in October last year, was halted after TSL informed Nampak that changing circumstances had affected its ability to justify the deal to its shareholders, despite a successful due diligence and competition authority approval process. Nampak has agreed to TSL's withdrawal.

The Johannesburg-based packaging company reaffirmed its commitment to disposing of its Zimbabwean asset on commercially acceptable terms. The sale was intended to reduce the group's net debt and mitigate exposure to the volatility of the Zimbabwean economy, with proceeds earmarked for debt repayment.

Nampak Zimbabwe produces paper, plastic, and metal packaging products and supplies major clients, including Coca-Cola and Tiger Brands. The company has been navigating a challenging period after accumulating R5 billion in debt during its expansion across Africa.

Since 2023, under CEO Phil Roux, Nampak has executed a comprehensive turnaround plan involving management changes, a business model review, debt and capital restructuring, a rights offer, and a renewed focus on its core metals business. The group has already met lender requirements to repay R720 million of net debt through the sale of its Liquid Cartons business in South Africa, as well as its operations in Zambia, Malawi, and Rigid Plastic SA.

Nampak has also exited the Nigerian market, where severe forex losses due to the naira's sharp depreciation against the dollar drove up US dollar-denominated raw material costs, further impacting profitability.

The company said it remains focused on its strategic objectives while continuing to explore opportunities for disposing of non-core assets on favorable terms.