TSL Limited has announced its intention to acquire a 52.43% interest in Nampak Zimbabwe for US$25 million, with the offer now accepted. Nampak Zimbabwe is fully owned by Nampak Southern Africa Holdings Limited.
TSL is currently working on finalizing the sale and purchase agreement with Nampak SAHL. The company has begun preparing a circular for shareholders that will provide comprehensive details about the transaction, including a notice for an extraordinary general meeting (EGM) and the necessary shareholder resolutions, along with required statutory and regulatory approvals.
The acquisition will require shareholder consent, which will be sought at the EGM, prompting caution for those dealing in the company’s securities.
TSL operates as a holding company with interests in tobacco auctioning, printing and packaging, agricultural inputs, storage and distribution, as well as various services. Its operations are segmented into logistics, agriculture, real estate, and services.
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For the quarter ending July 2024, group revenue rose by 13% compared to the previous year, driven primarily by growth in the logistics sector, with approximately 83% of revenue generated in US dollars. However, the company noted a significant increase in US dollar costs during this period, contributing to inflation.
In a separate statement, Nampak Zimbabwe indicated that the sale remains subject to several conditions, including the completion of binding transaction agreements and obtaining all necessary regulatory approvals. According to the Companies and Other Business Entities Act and the Zimbabwe Stock Exchange Listings Rules, the purchaser is obligated to make an offer to remaining Nampak Zimbabwe shareholders after the disposal is finalized.
The purchaser has assured that it can fulfill the mandatory offer within the stipulated timeframes, which may be settled in cash or through a share swap using its own shares. It is important to note that the mandatory offer will be conducted independently by the purchaser, without involvement from Nampak.
Nampak has indicated that further announcements will follow once the binding agreements are executed after ongoing negotiations. The rationale for this disposal aligns with Nampak’s strategy for asset disposal.
In its trading update for the quarter ending June 30, 2024, Nampak Zimbabwe reported that group volumes were up 2% compared to the previous year, with most product lines showing growth, except for high-density polyethylene (HPDE) and commercial cartons, which faced reduced demand and heightened competition.
Cumulative volumes for the nine-month period up to June 2024 were 3% lower than the prior year, though recent recoveries have compensated for earlier volume declines, particularly in the paper and metals sectors.
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