01 Oct 2019 Nampak cracks R1.5-billion glass sale

The packaging group has sold its glass unit to a joint venture between Kwande Capital and SA Breweries.

Nampak has finally reached a deal to sell its glass business to a joint venture between black-owned investment company, Kwande Capital, and SABSA Holdings, the SA holding company of SA Breweries. SABSA is own by Anheuser-Busch InBev, the world’s biggest brewer and one of the largest glass manufacturers.

Isanti Glass 1,as the venture is called, will pay R1.5-billion for Nampak Glass, one of two primary glass container manufacturers in SA which lists a number of large players in the food and beverage industry as its customers.

It operates three furnaces, supplying nine forming lines at its site in Roodekop, southeast of Johannesburg, and operates its own cullet sorting and processing plant on the property.

Despite investment in the division, which has resulted in a turnaround in its performance, the packaging group pushed ahead with the sale due to the significant capital it would continue to require. It previously said the money would be better spent elsewhere in its operations.

Nampak said the proceeds from the disposal would be used primarily to reduce interest bearing debt. It said the sale was in line with its portfolio optimisation strategy and would leave it focused on the balance of its portfolio.

Nampak Glass grew revenue in the single digits in the year to end-August. In a trading update last week, it said volumes remained relatively flat, constrained by production output.

The deal remains subject to approval by the country’s competition authorities.

Its shares rose 1.5% to R9.11 on Friday, 27 September.

Source: InceConnect.co.za