South African packaging company Nampak Ltd says it has closed its Nigeria metals business and is selling property, equipment and machinery to Twinings Ovaltine Nigeria Limited for N7.5 billion.
The debt-laden company said the sale of property belonging to its Nigerian non-beverage can business will allow it streamline operations and reduce its debt pile.
Nampak said it made a decision to close its Nigeria Metals business from July 31, 2023 “due primarily to subdued demand for metal can products manufactured by this operation.”
The unit contributed only 1.47% to Nampak’s revenue, the company said.
“The disposal will assist Nampak in its focus on the balance of its portfolio and to reduce its interest bearing debt,” it said in a regulatory filing Wednesday.
Key details to note
The property being sold measures approximately 3.611 hectares and is situated at number 3-7 Metal Box Road, Ogba Industrial Estate, Ikeja, Lagos.
It has a single factory building measuring 19,250 m2, as well as a reception and a clinic, boardroom and administration offices, and a canteen. The equipment includes two existing KVA transformers, bore hole system, water pipes, gas meter station and air conditioners.
The ultimate beneficial shareholder of Twinings Ovaltine Nigeria Limited, maker of popular beverage Ovaltine, is Associated British Foods Plc.
Nampak said the sale will be paid for in two installments of N6.75 billion within five days of receipt of various closing documents and N0.75 billion within two weeks after the leaseback period.
Learn more
Nampak paid $301 million in 2013 to buy a Nigerian beverage can manufacturer, Alucan Investment Ltd.
In 2019, it entered into an agreement with AR Packaging Group AB, a Swedish cigarette pack maker, for the disposal of its wholly-owned subsidiary Nampak Cartons Nigeria.
The company recently reached a deal with lenders to restructure its debt and raise 1 billion South African Rand in a rights offer.
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