Packaging manufacturer Nampak says it successfully concluded its refinancing with Standard Bank in September, having met the deadline by its lenders to return R720m in net debt from disposals by the end of the same month.
The company said this had resulted in a significantly simplified funding structure, inclusive of only a minor foreign debt component.
“Nampak has the option to include other lenders in the funding structure on or before March 25 2025,” it said in a statement. “Debt covenants have been reset in accordance with the group’s expected cashflow and earnings profile and interest rates are adjusted in accordance with the total debt outstanding.”
The packaging supplier for companies ranging from Coca-Cola to Tiger Brands has been battling to claw its way out of a mammoth R5bn debt hole it fell into during its ill-fated expansion in Africa.
Since 2023, under CEO Phil Roux, the JSE-listed packaging manufacturer has implemented a comprehensive turnaround plan, including board and management changes, a business model review, a capital and debt restructuring programme, a rights offer and a new strategy focused on its core metals business.
Nampak’s divestiture initiatives have yielded disposals of R2.2bn across the business portfolio, tracking ahead of the internally set time frames. Subsequently, it has since returned to profitability in the six months ended March, showing that its extensive restructuring and asset disposal programme was paying off.
At its half-year mark, net debt, excluding capitalised leases, was down R1.3bn to R4.6bn. A further tranche was due at the end of September and will be funded from disposals.
This week it told investors it had achieved its previously set out lender requirement to repay R720m of net debt from disposals by the end of September by using the proceeds from the disposals of the Liquid Cartons businesses in SA, Nampak Zambia, Nampak Malawi and Rigid Plastic SA.
The Johannesburg-based company has also exited Nigeria where forex losses were particularly acute as the naira depreciated sharply against the dollar, resulting in a surge in costs for raw materials funded in the US currency. The Nigerian Federal Competition and Consumer Protection Commission’s approval is the final requirement needed to complete the sale.
“The application has been submitted and we await their decision,” Nampak said. It added that other assets classified as discontinued operations were in the process of disposal or closure.
Nampak said annual results are expected to be released on December 2.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.