Debt-laden Nampak said on Thursday it had reached an agreement with Canda T Investment to sell a property in its Tanzanian manufacturing business for $5.5m (R109m).
The packaging group, which has warned of job cuts in SA ahead of its planned R1bn rights offer, said the book value of the property is $107,383 (about R2.13m).
The proceeds of the proposed transaction, which still require regulatory approval and certain conditions to be met, will be used primarily to reduce the company’s interest-bearing debt.
“Nampak has wound down and closed its Tanzania manufacturing business and the disposal relates to the property that is no longer required for use in manufacturing activities by Nampak Tanzania,” Nampak said in a statement.
“The disposal is in line with Nampak’s active portfolio optimisation strategy and will assist Nampak in its focus on the balance of its portfolio and to reduce its interest-bearing debt.”
JSE-listed Nampak, whose market capitalisation has dwindled to R497m from R40bn in its heyday, is foundering after an ill-fated expansion into the rest of Africa. The company has racked up a R6bn debt pile to date.
Its turnaround plan includes divestitures from Ethiopia, Kenya, Tanzania and its general metals business in Nigeria, with the group hoping to realise up to R250m of cash through the sales targeted at degearing its balance sheet.
Nampak, which released its interim results on Wednesday, said the sale of the 20,096.689m2 property in Dar es Salaam to Canda, did not include acquiring or otherwise taking over any other aspects relating to Nampak Tanzania’s business, including any contracts and/or supply agreements with its customers, all of which shall remain with Nampak Tanzania.
The Johannesburg-based Nampak said the funds for the sale would be paid in four tranches into an escrow account between May and the end of August. Thereafter registration of the property in the name of the purchaser is expected to occur within three months following the last instalment payment.
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