Africa's leading packaging company, Nampak, has been entitled to formal approval regarding the R1 billion rights offer circular, which is to be tentatively posted on Monday, September 4. The prevailing subscription price of R175 per share displays a discount of approximately 23.49 per cent compared with the 30-day volume-weighted average trading price of Nampak's usual shares until the business closed on August 30.
The company shared: "Nampak has received commitments from certain of its major shareholders to follow their rights in terms of the rights offer and subscribe for rights offer shares to the value of approximately R500 million."
"Nampak has furthermore received commitments from Coronation Asset Management up to a maximum of R300 million, A2 Investment Partners up to a maximum of R100 million, and Numus Capital up to a maximum of R50 million to partially underwrite the rights offer," commented the firm.
"Accordingly, the offer is underwritten by the underwriters for a maximum value of R450 million," Nampak asserted.
Nampak has confirmed that its directors are positive about the underwriters meeting their commitments to match the conditions of the rights offer. In a statement, the board stated that it had reviewed various precedent rights offers on the JSE from 2014 onwards and has determined that the underwriting fees payable to the underwriters are in line with market standards, taking all relevant factors into consideration. Nampak's interim results have resulted in a significant shift in corporate activity.
Nampak announced on August 31: "Numerous concurrent workstreams to reposition, refinance and rightsize the business have either been finalised or are at advanced stages of implementation."
"Good progress has been made in respect of the asset disposal programme, and we remain confident that the R2.6-billion target will be realised, with a critical focus on high-value assets," the company added.
Moreover, the amalgamation of Bevcan South Africa and DivFood is growing stronger as per the ploy, with an expert leadership team carrying on industry standard practices. In the last four months, DivFood has yielded a return to profitability, which is encouraging the reboot programme to invite more footfall.
Nampak said: "Management initiatives to reduce working capital through renegotiated terms and reduced inventory levels are yielding positive results, and capital expenditure is being actively managed and is expected to be in line with previous guidance."
"Additionally, following the sustained currency volatility within Nigeria and, to a lesser extent, Angola, management has implemented mechanisms to mitigate the severity thereof. With respect to Nigeria, it is clear that the government has taken the correct policy action, but it is likely to take some time for trading conditions to normalise," the company concluded.
Nampak's Bevcan division specifically deals with the aluminium beverage cans producing line. At the same time, DivFood looks after the aluminium food packaging department, serving the edibles industry with aluminium food cans and ends, aerosols and aluminium containers in South Africa.
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