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Article by Nampak 12 September 2016

Sale and leaseback transaction finalised, R1.744 billion received

Nampak is pleased to announce the conclusion of the sale and leaseback transaction announced on 1 June 2016. The transaction includes the sale and leaseback of fifteen properties in the group’s property portfolio and an outright sale of one property to Imbali Props 21 Proprietary Limited, a company in the Collins Property Group.

The transaction is now unconditional with an effective date of 1 September 2016. The payment of the purchase price of R1.744 billion has been received in full by Nampak.

André de Ruyter, Nampak’s CEO said “Nampak will lease the properties for a period of fifteen years, with an option to renew the leases for a further ten years and an option to repurchase the properties at market related prices on termination of the initial or extended lease periods. Rentals payable are equivalent to the current rental paid by Nampak’s divisions to Nampak’s property division. The competitiveness of Nampak’s operating divisions will therefore not be affected by the transaction with the transaction being earnings positive for the group.”

“This transaction is in line with Nampak’s strategy of deleveraging its balance sheet, strengthening the group’s covenant positions and creating the capacity for future growth. The transaction has significantly improved the group’s gearing ratio through a boost to equity and a substantial reduction in interest bearing debt with a clear focus to now deploy capital for the highest return. In addition, a portion of the proceeds is earmarked to reduce other liabilities further strengthening the balance sheet” says Glenn Fullerton, Nampak CFO. 

Murray Collins, of Collins Property Group, said, “as one of South Africa’s largest private property owning company, with a history spanning more than 100 years and invaluable experience in commercial property development and investment,  we are delighted to be Nampak’s new landlord for its South African operations as we believe this extensive industrial portfolio complements our existing portfolio extremely well. Nampak is a blue chip tenant with an exceptional credit rating and we look forward to a long association with them.”  

The transaction was managed by Knight Frank LLP, a leading independent global property consultancy. Their knowledge and experience in structuring such transactions together with insights on well-placed investors gave comfort to Nampak regarding the successful conclusion of the deal. The highest possible capital value balanced with the optimised rentals for Nampak was key to concluding the transaction. This indicates that exceptional yields are still achievable in the current market despite bond yields having pushed out significantly over the last 2 years.

ENDS 

About Nampak

Nampak is Africa’s largest diversified packaging manufacturer by volume and revenue. We leverage the skills of our 6 663 people and capitalise on our substantial investment in state-of-the-art facilities to produce world-class metal, glass and rigid plastics packaging from facilities in 12 countries across Africa, and in the United Kingdom. Our customers – many of them large fast-moving consumer goods companies – benefit from our extensive research and development services, which provide them with innovative solutions that promote their own products while keeping their impact on the environment in check.  

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