Nampak Limited: Resolves To Pursue An Empowerment Transaction With Cambrian

1. Introduction
Nampak is pleased to announce that it will be partnering with respected South Africans as part of an empowerment transaction (the “Transaction”). The Transaction is poised to take Nampak into its next chapter sustainably and responsibly and will be implemented with a newly established private equity fund (the “Fund”). The Fund will be managed via the Nampak incubated private equity fund manager Cambrian Capital Partners Proprietary Limited (“Cambrian/Consortium”).
The founders of Cambrian are Tembinkosi Bonakele and Tembeka Ngcukaitobi. Mr Bonakele is Cambrian’s Managing Director and Mr Ngcukaitobi is its Non-Executive Chairman. Together they bring about more than 40 years of experience in regulatory, commercial, competition and legal fields. Cambrian aims to participate in high-impact economic sectors including manufacturing, green energies and services through direct participation and partnerships to create sustainable employment, enable rural communities to participate in the mainstream of the economy, and explore funding to generate new and innovative ideas.
The board of directors of Nampak believes that the Transaction provides a unique opportunity to be a catalyst for the development and empowerment of South African broad-based black economic empowerment (“BEE”) private equity opportunities. With these core values in mind, the Transaction will be used to provide a unique investment opportunity to the Consortium. This will involve managing the Fund and building a capital base to support future empowerment investments and initiatives that would not have been feasible without this transaction. Nampak looks forward to working closely with Cambrian to unlock further value in Nampak’s South African business.
  • In addition to the above, the Transaction aims to achieve the following objectives:
  • create a sustainable funding structure for the Consortium;
  • minimise dilution to existing shareholders of Nampak;
  • ensure that Nampak’s South African business (“Nampak Products”) maintains its current BEE rating and achieves full points on the BEE ownership scorecard with black ownership (together with other existing initiatives) exceeding 25%;
  • afford Cambrian the opportunity to bring value-accretive initiatives to Nampak; and
  • complement existing BEE initiatives.
2. Incorporation and purpose of new Fund
Nampak has assisted in the incubation of the Fund, managed by Cambrian, to subscribe for shares in Nampak Products. Subsequently, Nampak Intermediate Holdings Limited, a wholly owned subsidiary of Nampak (“Nampak Intermediate Holdings”), has entered into an en commandite partnership agreement with Cambrian as the general partner and Fund Manager, to provide, inter alia, committed capital to the Fund. Through the Fund, the Consortium will aim to seek and realise value-accretive opportunities for Nampak, whilst both contributing and adhering to the transformation and empowerment objectives of the BEE Codes.
The Fund will have the following salient features:
  • Nampak Intermediate Holdings is a limited partner of the Fund and will act as the capital provider to the Fund;
  • Cambrian is both the general partner of the Fund as well as the Fund Manager, which entitles them to fund management fees along with the general partner’s share of the returns in the Fund;
  • the principal objectives of the Fund will be:
  • to facilitate and promote the BEE ownership of Nampak Products and, by extension, Nampak;
  • to further grow the business of Nampak Products over and above what is currently forecasted; and
  • to facilitate the growth and expansion of Cambrian as a BEE private equity fund manager.
3. Salient features of the Transaction
Nampak Intermediate Holdings (being the sole shareholder of Nampak Products) will acquire cumulative, non-participating, non-convertible, redeemable preference shares (“Preference Shares”) in Nampak Products, equal to the full market value of Nampak Products (“Intra-group Transaction”).
The Intra-group Transaction will enable the Fund to acquire Nampak Products ordinary shares (“Subscription”) at nominal value and without the need to raise acquisition funding and provide it with immediate ownership in Nampak Products and indirectly all the assets and liabilities of Nampak Products.
The Preference Shares will carry a preferred return at a spread to the official prime lending rate. The Fund will then subscribe to a 15% ordinary share interest in Nampak Products, while Nampak Intermediate Holdings will hold the remaining 85% ordinary share interest.
4. Conditions Precedent
The remaining conditions precedent to the Transaction, include the entering of appropriate agreements post the conclusion of the following
  • .Nampak Intermediate Holdings has waived its pre-emptive rights in relation to the Fund’s subscription; and
  • all required documentation in terms of the approvals received from third parties to implement the Transaction is provided.
5. Effective Date
Subject to the fulfilment or waiver as the case may be of conditions precedent as stipulated in paragraph 4 above, it is anticipated that the Transaction will become effective by [30] November 2024, or such later date as Nampak may, in its sole and absolute discretion, determine in writing.
6. Financial effects of the Transaction
The valuation of Nampak Products was performed by an independent third party to determine the value of the Preference Shares and has been signed off by the Independent Expert (see paragraph 7 below) to confirm that the valuation underlying the Transaction is fair
Nampak Intermediate Holdings, as the limited partner to the Fund, will provide committed capital of up to R12,5 million over the life of the Fund
7. Fairness Opinion
Although the Transaction does not require a fairness opinion, the Board resolved that a fairness opinion be conducted on the fairness of the Transaction for transparency purposes.
Moore Infinity Proprietary Limited (“Independent Expert”) has been appointed as the independent professional expert by the Board and has provided the Board with a fairness opinion with regard to the Transaction (“Fairness Opinion”), in which they have advised the Board that they believe that the terms of the Transaction are fair to the shareholders of Nampak.
The Fairness Opinion will lie open for inspection at the registered office of Nampak Nampak House, Hampton Office Park, 20 Georgian Crescent East, Bryanston, 2191, Gauteng for 14 days from the date of this announcement.
8. Shareholder Approval
The Transaction is deemed as a category 2 transaction and, as such, does not require Nampak shareholder approval. Furthermore, the Fund is not a related party to the Company as defined by the JSE Listing Requirements.
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Nampak Limited
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