The announcement on Friday of the sale of the glass business came two days after the group said it had stopped the disposal of its crates and drums business “following a restructuring within the unit and securing a contract from a major soft drinks manufacturer for a period of three years”.
Nampak, which has a footprint in 11 African countries, has been trading under a cautionary for seven months regarding the disposal of the business.
Chief executive André de Ruyter said the sale of the Nampak Glass business is in line with Nampak’s strategy to sharpen its focus on strategic substrates.
“We continue to rationalise the portfolio to optimise and improve returns on capital and reinforce our strategic intent. Proceeds from this disposal will be primarily used to reduce both local and international interest bearing debt and strengthen the company's financial position,” De Ruyter said. The group said the R1.5bn price consisted of R992 million for the property, plant and equipment plus the value attributable to the agreed levels of net working capital of the business at the closing date, which is estimated to be R500m.
Nampak said the glass business was one of two primary glass container manufacturers in South Africa and it services beverage and food manufacturers with an estimated market share of 25 percent.