Nampak revives exit bid for Zimbabwe unit

STAFF WRITER

South African packaging group Nampak Limited has revived plans to dispose of its Zimbabwe operation, positioning the sale as a key lever in its efforts to cut debt, simplify its funding structure and strengthen its balance sheet after a US$25m transaction collapsed earlier this year.

The renewed push comes as the group seeks to whittle down net debt to more sustainable levels, with the disposal of Nampak Zimbabwe Limited (NZL) expected to directly support further deleveraging.

Nampak had entered into a non-binding agreement on September 30, 2024, to sell its 51,43% stake in NZL to TSL Limited for US$25m, before concluding a formal sale contract on March 25 this year. Despite a smooth due-diligence process and clearance from competition authorities, the transaction fell through after TSL’s circumstances changed and its shareholders failed to grant the required approval.

In its financial results for the year ended September 30, 2025, Nampak confirmed it has resumed the search for a buyer, underscoring that proceeds from the sale will be ring-fenced for debt reduction.

“Efforts to dispose Nampak Zimbabwe business continue, and the net proceeds from the disposal of this business will be applied to further reducing the group’s net debt,” Nampak said.

“The group has also achieved a simplified funding structure, including the reduction of lenders and more manageable covenants as stipulated in terms of the lender agreements. All drawn-down debt is also long-term, thereby significantly strengthening the group’s financial position.”

The renewed disposal effort forms part of a broader turnaround strategy launched in 2023 to stabilise the business after years of financial strain. Since the start of the programme, Nampak’s net debt — excluding capitalised lease liabilities — has fallen sharply from ZAR5,2 bn (US$306,48m) in September 2022 to ZAR2,1 bn (US$123,71m) in September 2025.

The improvement has been driven by a combination of equity raising and aggressive asset sales.

“Net proceeds of ZAR1bn (US$58,93m) generated by the rights offer in the 2023 financial year and the net proceeds of ZAR2 bn (US$117,88m) received from the disposal of non-core assets over the period 2023 to 2025 were applied to reducing debt,” the group said.

Key disposals over the period include Nampak Bevcan Nigeria Ltd, Inspection and Coding Systems (I&CS), the operating assets of Nampak Kenya Ltd, and Tubes, a division of Nampak Products (Pvt) Ltd. The most recent round of disposals in the 2025 financial year alone generated ZAR1,5 bn (US$88,41m).

Despite the aborted transaction with TSL, NZL remains classified as “held for sale” in Nampak’s accounts. The group confirmed that the failure of the deal was solely due to shareholder approval not being secured on the buyer’s side.

“The group disposed of several assets during the year as part of the asset disposal plan, resulting in Nampak Zimbabwe Ltd (NZL) still being classified as held for sale and discontinued operations,” the company said.

“The required approval from the majority of TSL’s shareholders for the intended disposal of the group’s 51,43% shareholding in NZL was not obtained. Despite this, management and the board are still committed to the disposal of this asset and are actively looking for a buyer. Accordingly, the group continues to hold its interest in NZL as an asset held for sale in terms of the asset disposal plan.”

Nampak’s determination to exit Zimbabwe comes against a backdrop of mounting concern among foreign investors over the country’s operating environment, weighed down by currency instability, rising taxes and regulatory fees, policy inconsistency, bureaucratic red tape and persistent challenges around the repatriation of funds.

“The intended disposal will further contribute to the reduction of the group’s net debt and exposure to the associated risk and volatility of the Zimbabwean economy,” Nampak said.

Looking ahead, the group said sustained profitability, tight working capital management, disciplined capital expenditure and the anticipated proceeds from the NZL sale should support its ambition to return to an investment-grade credit profile over the medium term — a move that would lower funding costs and help rebuild investor confidence.