Debt-laden packaging manufacturer Nampak has raised R1bn from its shareholders after its rights offer was oversubscribed.
The successful capital raise will enable the management of the R615m JSE-listed group to reduce its R5bn debt pile, resulting in a more appropriate capital structure.
“Nampak is pleased to announce that it has successfully raised a total amount of R1bn pursuant to the rights offer,” the company said on Tuesday.
“As a result of subscriptions from shareholders and subscriptions pursuant to excess applications, gross demand equated to more than 138% of the available rights offer shares.”
Nampak, which had outstanding loans of R5.4bn at the end of March after an ill-fated expansion into the rest of Africa, embarked on a capital raise as part of its turnaround plan which includes cutting down costs, exiting noncore businesses and an extension on debt maturity to June 2024.
The group is also preparing for huge job cuts, salary freezes and a reduction in overtime as it battles a cash crunch that has eroded its share value over the past five years.
As part of its arrangements with lenders, Nampak was required to launch the requisite rights offer such that the net proceeds from the offer are available to settle debt on or before September 30.
Having reached a deal with lenders to restructure its debt and undertake the rights offer, it is also required to make debt repayments of R350m to the lenders on or before September 30, in addition to any proceeds from the rights offer and any business disposal proceeds.
On Tuesday, the group reported that the partially underwritten R1bn capital raise through a rights offer of 5.7-million new shares at R175 each which closed at noon on September 22, was so successful that it received applications for 2.7-million excess rights offer shares.
Shareholders were entitled to 2.2 rights shares for each ordinary share held on the recorded date, while nil paid letters were issued to qualifying shareholders.
Fund manager Coronation committed as much as R300m to the underwriting of the rights offer, while A2 Investment Partners committed to partially underwrite by up to R100m, and Numus Capital committed up to R50m.
Accordingly, Coronation was allocated 567,135 rights offer shares in terms of the Coronation underwriting agreement, Nampak said, adding that excess applications by shareholders were not permitted in respect of rights offer shares with an aggregate value of R100m.
CEO Phil Roux has also emphasised the merger of Bevcan and Divfood as another measure to synergies resources, reduce costs and unlock value.
Nampak has also touted its exit from East Africa, where its business has been hammered by currency volatility — a move that could free up as much as R250m in cash for the debt-stricken packaging group.
Nampak shares rose 0.48% to R224.00 by midday on Tuesday.
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