Nampak takes R2 billion hit from Bevcan sale 

Nampak has sold Bevcan Nigeria for R1.25 billion – over R2 billion less than what it paid for the business a decade ago.

On 16 May, Nampak announced that it sold its Bevcan Nigeria business for R1.25 billion ($68.5 million) to a Singaporean company called Alucan Investment.

This was done as part of its asset disposal plan, with Bevcan Nigeria – a high-value asset – prioritised for disposal.

The buyer, Alucan Investment, is a private limited company incorporated in Singapore and wholly owned by the Evergreen Trust. 

Bevcan Nigeria is incorporated and domiciled in Nigeria and is the second-largest manufacturer of beverage cans in the country. 

The ultimate beneficial shareholder is Nampak Limited, via Nampak Nigeria Holdings (99%) and Nampak Bevcan Nigeria (1%).

Nampak acquired Bevcan Nigeria in 2014 for R3.3 billion, which translates to a R2 billion loss on disposal of the asset.

Nampak said in its September 2023 financial statements that the Nigerian economy was adversely affected by the removal of fuel subsidies and the illiquidity of the Nigerian naira.

In June 2023, Nigeria implemented a naira-free float, meaning the Central Bank of Nigeria no longer directly controls the currency’s exchange rate. Now, supply and demand in the foreign exchange market determine the value of the naira.

This will likely have long-term benefits for the currency and companies that operate in the region, including South African companies with large operations in Nigeria.

However, in the short and medium term, it has meant significant pain for companies like MTN, Nampak, and MultiChoice.

Nampak recognised a R1 billion loss in Nigerian forex losses alone during the 2023 financial year. This caused the company to recognise an impairment loss of R1.55 billion on its Bevcan Nigeria asset.

The Bevcan Nigeria impairment was part of a larger host of R2.8 billion impairment losses seen in its Rest of Africa portfolio.

Nampak was set to release its interim results in May 2024 but warned investors they would be delayed due to a cyber incident.