Nampak turnaround continues – dumps R450 million of assets

Nampak announced today that it has agreed to sell its South African liquid cartons business and the issued shares of Nampak Zambia, and Nampak Malawi for around R450 million.

Nampak informed shareholders this morning that it has entered into an agreement with Corvest 15, Diversified Liquid Packaging Group and Liquid Cartons. 

This agreement was on behalf of a consortium represented by Corvest 15 and Dlondlobala Capital, acting as fund manager of D Capital Fund 1.

As part of this agreement, Nampak will dispose of the following –

• Its liquid cartons business in South Africa
• The issued shares of and certain shareholder claims in Nampak Zambia and Nampak Malawi

The consortium involved in the sale, Corvest 15, is a private equity company and an indirect subsidiary of FirstRand Bank.

It forms part of the RMB Corvest private equity group of companies founded in 1989. 

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

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

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

The beneficial owners of the purchaser are Corvest 15, Dlondlobala Capital and the abovementioned key management members.

Nampak Liquid Cartons is a separate business division under Nampak Products that manufactures, sells, and supplies paper liquid packaging products, including Pure-Pak and Conipak liquid cartons in South Africa.

Nampak Zambia manufactures, sells and supplies conical cartons, the provision of total packaging solutions ranging from filling equipment to technical support, supplemented by the manufacture, sale and supply of self-opening bags, crates, plastic bottles, closures, and steel drums in Zambia.

Nampak Malawi receives semi-processed conical cartons from Nampak Zambia for processing to a saleable product, as well as delivering marketing services for the direct sale of tobacco cases and corrugated cartons by Nampak Zimbabwe.

Nampak said this disposal is part of its undertaking to implement various turn-around initiatives, including the implementation of an asset disposal plan to raise approximately R2.6 billion.

It is seeking to shift the company from being a conglomerate to a business that is more focused on specific packaging operations.

This will allow the company to deliver higher quality earnings, reduce risk, and improve cash-generative ability, thus making it better positioned to deliver returns to shareholders.

This disposal will be for a base aggregate consideration of R450 million and is being implemented on a locked-box construct with effect from 1 October 2023.