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Category 1 Disposal Announcement
NAMPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1968/008070/06)
Ordinary Share Code: NPK
Ordinary share ISIN: ZAE000322095
6.0% Preference Share Code: NPKP ISIN: ZAE000004958
6.5% Preference Share Code: NPP1 ISIN: ZAE000004966
LEI: 3789003820EC27C76729
("Nampak" or "Company")
CATEGORY 1 DISPOSAL ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that on 25 March 2024 ("Signature Date") the Company, through its
wholly-owned subsidiary Nampak Products Limited ("Nampak Products"), and together with
Nampak International Limited ("Nampak International"), Nampak Southern Africa Holdings
Limited ("Nampak Southern Africa Holdings") and Transmar (Isle of Man) Limited ("Transmar")
(all of which are Nampak group companies) (together, the "Nampak Group"), entered into an
agreement with Corvest 15 Proprietary Limited ("Corvest 15"), Diversified Liquid Packaging Group
Proprietary Limited ("M/Z Purchaser") and Liquid Cartons Proprietary Limited ("SA Purchaser")
(collectively the "Purchasers") on behalf of a consortium ("Consortium") that is
represented by Corvest 15 and Dlondlobala Capital Proprietary Limited acting in its capacity as
fund manager of D Capital Fund 1 Proprietary Limited ("Dlondlobala Capital") in terms of which
the Nampak Group will dispose of:
1.1. its liquid cartons business in South Africa (more fully described below) by way of a sale of the
SA Business (defined below) to the SA Purchaser as a going concern ("Sale of Business
Agreement"); and
1.2. the issued shares of, and certain shareholder claims in, Nampak (Zambia) Limited ("Nampak
Zambia") and Nampak Malawi Limited ("Nampak Malawi") (the "Zambia Share Sale
Agreement" and "Malawi Share Sale Agreement" respectively) to the SA Purchaser and the
M/Z Purchaser,
through an Implementation Agreement, the Sale of Business Agreement, the Zambia Share Sale
Agreement, the Malawi Share Sale Agreement and a customary Restraint Undertaking, collectively
defined as the "Transaction Agreements", (collectively, the "Disposal").
2. DETAILS OF THE CONSORTIUM
2.1. Corvest 15 is a private equity company and an indirect subsidiary of FirstRand Bank Limited.
It forms part of the RMB Corvest private equity group of companies which was founded in
1989. The RMB Corvest group of companies invests in established, well-managed, medium-
sized businesses across South Africa and Sub-Saharan Africa with a proven track record of
solid performance.
2.2. Dlondlobala Capital is a majority black owned investment holding company and private equity
fund manager that invests in mid-size BEE related opportunities, buyouts, and growth capital
investments, predominantly in South Africa. The current key Nampak Group management
members (specifically, Raymond Dube and Shaun Du Plessis) will become shareholders into
the acquired liquid cartons business as a result of the Disposal.The beneficial owners of the
purchaser are Corvest 15, Dlondlobala Capital and the abovementioned key management
members.
3. DESCRIPTION OF THE ASSETS
3.1. Nampak Liquid Cartons is a separate business division under Nampak Products which
manufactures, sells and supplies paper liquid packaging products, including Pure-Pak and
Conipak liquid cartons, in South Africa ("SA Business").
3.2. Nampak Zambia manufactures, sells and supplies conical cartons, the provision of total
packaging solutions ranging from filling equipment to technical support, and supplemented by
the manufacture, sale and supply of self opening bags, crates, plastic bottles, closures and
steel drums, in Zambia.
3.3. Nampak Malawi receives semi-processed conical cartons from Nampak Zambia for
processing to a saleable product as well as delivering marketing services for the direct sale
of tobacco cases and corrugated cartons by Nampak Zimbabwe (Hunyani), in Malawi.
4. RATIONALE FOR THE DISPOSAL
Shareholders are referred to the announcement made by the Company on 29 August 2023
whereby the board of directors of the Company and management have undertaken to implement
various turn-around initiatives, including the implementation of an asset disposal plan to raise
approximately R2.6 billion, seeking to shift the Company from being a conglomerate to a business
that is more focused on specific packaging operations delivering a higher quality of earnings,
reduced risk and an improved cash generative ability, and thus better positioned to deliver returns
to the shareholders of the Company.
5. DISPOSAL CONSIDERATION
The Disposal is for a base aggregate consideration of R450,000,000, and is being implemented
on a locked-box construct with effect from 1 October 2023, with consequent permitted adjustments
until the effective date. The further terms of the locked-box construct shall be set out in the circular
referred to in paragraph 12.
6. APPLICATION OF THE DISPOSAL CONSIDERATION
The Disposal Consideration will be applied towards the settlement of debt within the Nampak group
of companies.
7. CONDITIONS PRECEDENT
The Disposal is subject to the fulfilment of, inter alia, the following outstanding conditions precedent
("Conditions Precedent"):
7.1. by no later than the Signature Date, each of the Transaction Agreements being duly entered
into by each of the parties thereto, and each such agreement subsequently becoming
unconditional in accordance with its respective terms;
7.2. each relevant competition authority approving the implementation of the Disposal and the
Transaction Agreements or if conditionally approved, the relevant parties accept the relevant
conditions in accordance with the provisions of the Implementation Agreement;
7.3. to the extent required under the Exchange Control Regulations, 1961 written approval from
the Financial Surveillance Department of the South African Reserve Bank being obtained for
the implementation of the Disposal;
7.4. the shareholders of Nampak approve the Disposal as a Category 1 transaction in terms of the
JSE Listings Requirements and, by no later than 90 days following the Signature Date, a
circular which complies with the JSE Listings Requirements and incorporating a notice of
general meeting has been posted to shareholders of Nampak;
7.5. the license agreement between Nampak Products and Elopak AS is ceded and assigned by
Nampak Products to the SA Purchaser with effect from closing of the Disposal, and certain
other consents required under material contracts are obtained;
The details of the Conditions Precedent shall be more fully set out in the Circular as detailed in
paragraph 12. The Conditions Precedent must be fulfilled by not later than 30 September 2024 or
such earlier date as specified above, which date may be extended by the parties in writing.
8. EFFECTIVE DATE OF THE DISPOSAL
Delivery and payment in respect of the SA Business and the shares, and applicable shareholder
claims, in Nampak Zambia and Nampak Malawi will take place on the first day of the calendar
month following the calendar month in which Conditions Precedent are fulfilled or, where
applicable, waived, and certain other pre closing attendances are complete, provided that if this
occurs after the 25th day of any calendar month, then the closing of the Disposal shall be
commencement of business on the first day of the second calendar month following the calendar
month in which such matters are complete, provided further that the closing of the Disposal shall
be adjusted to ensure that at least 30 days (but not more than 60 days) has lapsed since publication
of the last of the statutory notices required in terms of section 34 of the Insolvency Act.
9. FINANCIAL INFORMATION
The value of the net assets comprising the assets that are the subject of the Disposal as at 30
September 2023, being the date of the last audited annual financial statements of Nampak Limited,
was R399 065 316.
The audited profits after tax attributable to the assets that are the subject of the Disposal was R104
686 894, based on the audited annual financial statements of Nampak Limited for the year ended
30 September 2023, which were prepared in terms of IFRS.
10. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE TRANSACTION AGREEMENTS
10.1. The Transaction Agreements contain representations, warranties, specific indemnities and
undertakings by the Nampak Group in favour of the Purchasers which are standard for
transactions of this nature.
10.2. Full details of the Disposal will be set out in the circular referred to in paragraph 12 below.
11. CLASSIFICATION OF THE DISPOSAL
11.1. As the value of the Disposal exceeds 30% of the Company's market capitalisation as at the
date of the signature of the Transaction Agreements, it meets the definition of a category 1
transaction as contemplated in section 9 of the JSE Limited Listings Requirements.
11.2. As a result, the Disposal is required to be approved by an ordinary resolution of the
shareholders of the Company and accordingly a general meeting of the shareholders of the
Company will be convened.
12. CIRCULAR
A circular containing the full details of the Disposal, incorporating a notice convening the required
general meeting of the shareholders of the Company, will be distributed to shareholders in due
course, at which time the salient dates and times of the Disposal, including the date of the general
meeting, will be announced on SENS.
Bryanston
26 March 2024
Corporate Advisor and Sponsor
PSG Capital
Legal Advisor
Bowmans
Date: 26-03-2024 09:00:00
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