Nampak’s ZAR 1B Rights Boost: Strategic Moves and Investor Opportunity

Nampak Limited has made a significant announcement regarding its plans to raise capital through a renounceable rights offer. The company also shared updates on its strategic initiatives and operational performance, showcasing a series of positive developments.

Rights Offer to Raise ZAR 1 Billion

In a move to strengthen its financial position and support its growth strategies, Nampak has unveiled a ZAR 1 billion renounceable rights offer. The offer is aimed at qualifying Nampak shareholders and will provide an opportunity for them to subscribe for new ordinary shares at a discounted price. The offer comes at a subscription price of ZAR 175.00 per Rights Offer Share, presenting a considerable discount of approximately 23.49% to the 30-day volume-weighted average traded price of Nampak’s ordinary shares as of August 30, 2023.

Shareholders recorded in the company’s register as of the record date, September 8, 2023, will receive rights to subscribe for Rights Offer Shares based on a ratio of 2.20902 rights for every 1 Nampak ordinary share held. The offer allows shareholders to commence trading nil paid letters of allocation from September 6, 2023, until September 19, 2023, under the JSE code NPKN and ISIN ZAE000317319. Rights Offer Shares trading is set to begin on September 20, 2023.

Key commitments have been secured from major shareholders, including Coronation Asset Management, A2 Investment Partners, and Numus Capital, totaling up to ZAR 500 million. These commitments, coupled with a partial underwriting agreement with these entities, ensures a maximum underwriting value of ZAR 450 million for the Rights Offer. The underwriters’ ability to fulfill their commitments has been thoroughly examined by the company’s directors.

Operational Progress and Strategic Initiatives

Nampak also provided an update on its strategic initiatives, highlighting several milestones achieved since the announcement of its interim results earlier this year.

• Asset Disposal Program: Nampak has made significant progress in its asset disposal program, targeting a realization of ZAR 2.6 billion. The company is focusing on high-value assets, aiming to optimize its asset portfolio.
• Merger and Turnaround: The merger of Bevcan South Africa and DivFood is well underway, with a dedicated leadership team in place. DivFood’s return to profitability over the past four months is particularly noteworthy, showcasing the positive impact of turnaround initiatives.
• Working Capital Management: Nampak’s efforts to reduce working capital through renegotiated terms and inventory level reductions are showing promising results. These initiatives are expected to contribute to improved financial efficiency.
• Capital Expenditure: The company is actively managing its capital expenditure, aligning it with previous guidance, and ensuring that investments are in line with strategic objectives.
• Currency Volatility Mitigation: Given the sustained currency volatility in certain regions, Nampak’s management has taken measures to mitigate its impact. Although trading conditions are expected to normalize over time, proactive steps have been taken to minimize the severity of currency-related challenges.

Salient Dates and Information

The company also provided a comprehensive list of salient dates related to the rights offer, including the finalization announcement release, commencement of trading for rights, record dates, closure of the rights offer, and issuance of rights offer shares. These dates, outlined in the provided table, allow shareholders to keep track of important milestones in the rights offer process.