Nampak Limited has entered into a sale agreement for the sale of its Glass business for an estimated R1.5 billion as a going concern to Isanti Glass 1 Proprietary Limited.
The Glass business is one of two primary glass container manufacturers in South Africa servicing beverage and food manufacturers with an estimated market share of 25%.
Nampak CEO, André de Ruyter commented: “The sale of the Nampak Glass business is in line with Nampak’s ongoing strategy to sharpen our focus on strategic substrates. We continue to rationalise the portfolio to optimise and improve returns on capital and reinforce our strategic intent. Proceeds from this disposal will be primarily used to reduce both local and international interest bearing debt and strengthen the company’s financial position.”
The consideration, partially earmarked to improve gearing by reducing Nampak Limited’s debt levels, is payable in cash and consists of R992 million for the property, plant and equipment plus the value attributable to agreed levels of net working capital of the business as at the closing date. The disposal is subject to the fulfilment of various suspensive conditions, typical for a transaction of this nature, including the approval of South African competition authorities.
It is not anticipated that the suspensive conditions will have been met before the Nampak Limited 30 September 2019 year-end.