Nampak, Africa’s biggest packaging group that is struggling through a severe restructuring due to high debt, saw its share price surge yesterday after it announced the $68.5 million (R1.25 billion) sale of its Nigerian business.
The share were trading over 15% higher at R191.44 yesterday afternoon, indicating the disposal was positively received by shareholders.
Proceeds from the disposal would go towards reducing Nampak’s debt. The book value of the assets being sold, at September 30, 2023, was R69.4m.
Opportune Investments chief investment officer Chris Logan said it was “great that they have managed to sell at a reasonable price”.
He said the rise of the share price indicated that the market was “relieved” about the disposal so that Nampak’s management could focus squarely on getting the group’s South African operations back into shape.
In December, Nampak said it planned to raise, in terms of its restructuring, R2.7bn through asset disposals over 18 months, to repay its debt. Restructuring initiatives last year included implementing a turnaround plan, board and management changes, a business model review, a capital and debt restructuring programme, a rights offer and a new strategy.
In the same month, Nampak’s Nigeria assets, however, made R1bn of foreign exchange related losses for the year to September 30, 2023, due to the devaluation of the Nigerian naira.
The group said yesterday that it, through a subsidiary, Nampak Nigeria Holdings had entered into a share purchase agreement with Alucan Investment Pte. Ltd to sell all of the issued shares of Nampak Bevcan Nigeria.
In terms of a broader asset disposal plan that Nampak announced in August last year as part of its restructuring, Bevcan Nigeria, a priority asset of high value, had been prioritised for disposal.
The deal was subject to approval by the Federal Competition and Consumer Protection Commission of Nigeria.
Nampak’s Nigerian assets reported an attributable taxed loss of R2.01bn last year, including a related goodwill impairment of R1.55bn, for the year ended September 30, 2023.
Last week, Nampak said the release of its interim results for the six months to March 31, 2024, would be delayed due to a cyberattack on March 26.
Historically, Nampak has released its interim results in the last week of May. Following the cyber incident, a range of steps to restore the group's information management and reporting systems were taken. These were up and running, but further steps were being taken to ensure that all financial information was correct.
The interim results would be released on June 28, 2024.
In 2019 Nampak sold its wholly-owned subsidiary Nampak Cartons Nigeria to AR Packaging Group AB.
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