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BL Premium reports that debt-laden Nampak is preparing for huge job cuts, salary freezes and a reduction in overtime as it battles a cash crunch that eroded its share value over the past five years.
Nampak interim CEO Phil Roux also announced a reduced rights offer of up to R1bn to help raise capital to pay off R6bn in debt incurred after a disastrous expansion into Africa. Nampak’s debt far outweighs its R455m market value. The packaging manufacturer plans to merge two divisions, BevCan and DivFood, into one entity as it works to simplify its structure and draw on efficiencies to turn around its fortunes. “We will reduce our headcount significantly across the entire organisation,” said Roux. This is one of the difficult decisions he has had to make since his appointment just more than four weeks ago. Roux added: “There is a vacancy freeze edict from my desk. Absolute salaries will be reduced and reinstated when our cash generation allows for that.” This will be done in accordance with the right-sizing of the portfolio. “We are going to attack over time. It’s a big number in our organisation, and the head office reduction will be real,” Roux said without elaborating. He assured that the chop would not be made all in one go. “We will not be reckless,” said Roux. Nampak employs just more than 4,000 people in its metals, paper and plastics divisions in SA, with its Cape Town-based R&D division employing many scientists, engineers, technologists and technicians.
- Read the full original of the report in the above regard by Michelle Gumede & Andries Mahlangu at BusinessLive (subscriber access only)
- Read too, Nampak 'cannot and simply won't fail' says new CEO as he grapples with crippling R5.9bn debt pile, at Fin24 (subscriber access only)
Get other news reports at the SA Labour News home page