NAMPAK LIMITED - Disposal of Paper Business

Disposal of Paper Business

Nampak Limited
(Incorporated in the Republic of South Africa)
Registration number: 1968/008070/06
Share code: NPK
ISIN: ZAE000071676
(“Nampak” or “the Company” or “the Group”)

CATEGORY 2 TRANSACTION ANNOUNCEMENT: DISPOSAL OF PAPER
BUSINESSSES IN SOUTH AFRICA

1.   Introduction

     Nampak shareholders are advised that Nampak has entered
     into an agreement with Ethos Private Equity Proprietary
     Limited on behalf of Ethos Fund V1 (“Ethos”), in terms of
     which Nampak will sell to Ethos in one, indivisible
     transaction its Corrugated, Sacks and Tissue divisions
     (excluding the Group’s shareholding in Sancella (Pty) Ltd
     and its Recycling business ) (“the Transaction”).

2.   Description of the Businesses

     Nampak’s   Corrugated   division    manufactures   recycled
     container board and corrugated packaging products.

     Nampak’s Sacks division manufactures paper sacks and bags.

     Nampak’s Tissue division manufactures a range of tissue
     paper products, including toilet tissue paper, facial
     tissues and roller towels.

3.   Rationale for the Transaction

     The Transaction is a further step in the   implementation of
     Nampak’s stated strategy of focusing on core product
     segments, namely metals, glass and plastic and its
     investment in these core businesses in South Africa and
     the rest of Africa.

4.   Purchase Consideration

     The consideration payable for the Transaction is R1.575
     billion, to be paid in cash on the effective date of the
     Transaction. Nampak intends to invest the proceeds of the
     Transaction mainly in strategic growth opportunities in
     the rest of Africa.

5.   Conditions Precedent

     The Transaction is subject to various conditions precedent
     to be fulfilled by dates to be agreed, including:
     5.1.   approval in writing being granted to Nampak by the
            Financial Surveillance Department of the South
            African Reserve Bank regarding the sale of Nampak’s
            shareholding   in    Nampak   Corrugated  Swaziland
            Proprietary Limited to Ethos;

     5.2.   approval of the Transaction being granted      by   the
            competition authorities in South Africa; and

     5.3.   all other regulatory approvals, consents and other
            exemptions necessary in respect of the Transaction
            being granted.

6.   Representations and warranties

     The sale and purchase agreement includes representations
     and warranties usual for a transaction of this nature.

7.   Value of Net Assets

     The value of the net assets that are the subject of the
     Transaction as at 31 March 2014 was R1.969 billion prior
     to the impairment referred to in paragraph 11 below.

8.   Profits Attributable to Net Assets

     The profit after tax attributable to the net assets that
     are the subject of the Transaction for the year ended 30
     September 2014 was R133.8 million.

9.   Effective Date of the Transaction

     Subject to fulfilment of the conditions precedent, Nampak
     expects the Transaction to close in the second quarter of
     the 2015 financial year.

10. Categorisation of the Transaction

     The Transaction is classified as a Category 2 transaction
     in terms of the Listings Requirements of the JSE Limited.

11. Additional Information

     The businesses which are the subject of the Transaction
     have not been classified as held for sale in the financial
     statements for the year ended 30 September 2014, since the
     sale of the businesses was not highly probable at that
     date.    The value of the consideration payable for the
     transaction is below the carrying value of the net assets
     of the businesses at 30 September 2014.    As a result it
     has   become  necessary   to  effect   an  impairment   of
   approximately R394 million which has been accounted for in
   the results for the financial year ended 30 September 2014.

   The above information has not been reviewed or reported on
   by the Company’s external auditors.

12. Withdrawal of cautionary announcement

   Following this announcement the cautionary announcement
   issued on 11 November 2014 is withdrawn. As a result
   caution is no longer required to be exercised by
   shareholders when dealing in their securities.


   Sandton

   20 November 2014
   Sponsor: UBS (South Africa) (Pty) Ltd

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