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Johannesburg - Packaging company Nampak [JSE:NPK] advised on Monday that an agreement has been concluded in terms of which Nampak will dispose of the entire shareholding of Nampak Paper Holdings (Europe Paper) to Luxembourg-based Maximus Holding II.
The purchase consideration is based on an enterprise value of £80m and after deducting pension fund liabilities, quasi debt items and other miscellaneous transaction adjustments the net proceeds are estimated to be £65m (R868m).
Nampak Paper Holdings is the holding company of the Cartons and Healthcare businesses in Europe.
Nampak acquired the European Cartons and Healthcare businesses in 2002 as part of the acquisition of Malbak from Remgro [JSE:REM] and other shareholders. These European operations have earned very poor returns since 2002, averaging 5.9% return on net assets since the acquisition.
A review of the businesses by the new management and board at Nampak concluded that these operations are unlikely to achieve the returns required by the Nampak group. The board therefore decided to sell these businesses.
The funds will initially be used to reduce debt and will put Nampak in a better position to invest in other group operations and countries where better returns are expected.
The sale is conditional on European Commission approval, which will be announced by end March 2011.
The net purchase consideration of £65m will be paid in cash on the effective date of the transaction. The sale proceeds will be utilised to reduce debt in the Nampak group.
Shareholders were advised they no longer need to exercise caution when dealing in their Nampak shares.
The purchase consideration is based on an enterprise value of £80m and after deducting pension fund liabilities, quasi debt items and other miscellaneous transaction adjustments the net proceeds are estimated to be £65m (R868m).
Nampak Paper Holdings is the holding company of the Cartons and Healthcare businesses in Europe.
Nampak acquired the European Cartons and Healthcare businesses in 2002 as part of the acquisition of Malbak from Remgro [JSE:REM] and other shareholders. These European operations have earned very poor returns since 2002, averaging 5.9% return on net assets since the acquisition.
A review of the businesses by the new management and board at Nampak concluded that these operations are unlikely to achieve the returns required by the Nampak group. The board therefore decided to sell these businesses.
The funds will initially be used to reduce debt and will put Nampak in a better position to invest in other group operations and countries where better returns are expected.
The sale is conditional on European Commission approval, which will be announced by end March 2011.
The net purchase consideration of £65m will be paid in cash on the effective date of the transaction. The sale proceeds will be utilised to reduce debt in the Nampak group.
Shareholders were advised they no longer need to exercise caution when dealing in their Nampak shares.
