Nampak is selling a 51.43% stake in its Zimbabwe unit to TSL for $25 million amidst challenging economic conditions. This move is part of Nampak’s asset disposal plan to address financial difficulties resulting from currency instability and policy changes in Zimbabwe.
Nampak, a South African packaging manufacturer, has finalized agreements to sell its Zimbabwe unit, Nampak Zimbabwe, to Harare-based logistics and processing firm TSL. This transaction involves TSL acquiring a 51.43% shareholding in Nampak Zimbabwe for $25 million. The sale remains contingent on suspensive conditions, and an announcement regarding the full disposal is anticipated in the forthcoming weeks.
In compliance with regulatory requirements, TSL will extend an offer to the remaining shareholders of Nampak Zimbabwe. The logistics company confirmed that it possesses the capacity to execute the mandatory offer within the stipulated timelines, which may involve cash or share swaps. Nampak Zimbabwe has stated that this mandatory offer will be carried out entirely by TSL after the completion of the disposal, without Nampak’s involvement.
The decision to divest the Zimbabwean unit aligns with Nampak’s broader asset disposal strategy. The company is currently implementing cost-containment measures in response to a challenging operating environment characterized by recent policy shifts and currency instability in Zimbabwe. Nampak Zimbabwe’s managing director noted that these economic challenges complicate operations and increase risks of company closures.
Demand for packaging materials has diminished significantly, partly due to heightened competitive pressures and supply chain disruptions from civil unrest in Mozambique. Nampak Zimbabwe experienced a sharp decline in revenues, reporting a 23% drop in US dollar terms and a 56% decrease in trading profit. The fluctuations in exchange rates, following the local currency’s depreciation, further complicate the demand outlook as the retail sector faces notable branch closures.
In summary, Nampak Zimbabwe is undergoing a pivotal change following the sale of its majority stake to TSL amid challenging economic conditions. The need for asset management and cost controls is crucial as the company grapples with substantial revenue decline and operational difficulties. The anticipated mandatory offer from TSL marks an important transition for shareholders as Nampak actively seeks to navigate the prevailing economic landscape in Zimbabwe.
Original Source: www.newzimbabwe.com
