NAMPAK Limited (Nampak)’s renewed push to dispose of its Zimbabwe business has emerged as a critical step in reducing its ZAR2,1 billion (US$123,71 million) debt burden and strengthening its balance sheet after a previous US$25 million deal collapsed.
The South African packaging giant had entered into a non-binding agreement on September 30, 2024 to sell its 51,43% stake in Nampak Zimbabwe Limited (NZL) for US$25 million.
A formal sale contract was concluded on March 25 this year.
However, despite a smooth due diligence process and approval from competition authorities, the prospective buyer, TSL Limited, withdrew from the deal after its circumstances changed.
In its financial results for the year ended September 30, 2025, Nampak said it has resumed the search for a buyer for the Zimbabwe unit, stressing that the proceeds will go directly toward debt reduction.
“Efforts to dispose Nampak Zimbabwe business continue, and the net proceeds from the disposal of this business will be applied to further reducing the group’s net debt,” Nampak said.
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“The group has also achieved a simplified funding structure including the reduction of lenders and more manageable covenants as stipulated in terms of the lender agreements.
“All drawn-down debt is also long-term, thereby significantly strengthening the group’s financial position.”
Nampak said it has achieved a simplified funding structure, reduced the number of lenders, and secured more manageable covenants under new financing agreements.
The restructuring is part of a broader turnaround strategy launched in 2023 to stabilise the business after years of financial strain.
Since the start of the turnaround, the group’s net debt, excluding capitalised lease liabilities, has fallen sharply from ZAR5,2 billion (US$306,48 million) in September 2022 to ZAR2,1 billion in September this year.
This has been achieved through a combination of a rights offer and a large-scale disposal of non-core assets
“Net proceeds of ZAR1 billion (US$58,93 million) generated by the rights offer in the 2023 financial year and the net proceeds of ZAR2 billion (US$117,88 million) received from the disposal of non-core assets over the period 2023 to 2025 were applied to reducing debt.”
Key disposals include Nampak Bevcan Nigeria Ltd, Inspection and Coding Systems (I&CS), the operating assets of Nampak Kenya Ltd, and Tubes, a division of Nampak Products (Pvt) Ltd. The latest disposals in the 2025 financial year generated ZAR1,5 billion (US$88,41 million).
Despite NZL remaining classified as “held for sale”, Nampak confirmed that TSL’s shareholders did not grant the required majority approval for the earlier planned transaction.
“The group disposed of several assets during the year as part of the asset disposal plan resulting in Nampak Zimbabwe Ltd (NZL) still being classified as held for sale and discontinued operations,” the company said.
“The required approval from the majority of TSL’s shareholders for the intended disposal of the group’s 51,43% shareholding in NZL was not obtained.
“Despite this, management and the board are still committed to the disposal of this asset and are actively looking for a buyer. Accordingly, the group continues to hold its interest in NZL as an asset held for sale in terms of the asset disposal plan,” it added.
Nampak’s renewed effort to offload its Zimbabwe operation comes amid growing concerns among foreign investors over Zimbabwe’s volatile operating environment, marked by currency instability, rising taxes and regulatory fees, red tape, policy inconsistency and recurring challenges in repatriating funds.
“The intended disposal will further contribute to the reduction of the group’s net debt and exposure to the associated risk and volatility of the Zimbabwean economy,” it said.
Nampak maintains that ongoing profitability, strict working capital management, prudent capital expenditure and the expected proceeds from the NZL sale will help it target an investment-grade credit rating in the future, bringing lower funding costs and greater investor confidence.