BY TATIRA ZWINOIRA
AMALGAMATED Regional Trading (ART) has assumed full control of Softex Tissue Products after clinching a US$800 000 deal to take over a 50% stake previously held by the Zimbabwe Stock Exchange-listed packaging products manufacturer, Nampak Zimbabwe Limited.
Softex had until last week been jointly controlled by the two giants.
In shareholder updates on Thursday and Friday, both firms confirmed agreeing on the Softex transaction, with ART laying out a payment plan that will see it making part payments for the acquisition until October.
The agreement followed an ART board decision to approach Nampak last year to take over its 1 448 500 shares in Softex.
The ART board said the transaction would be crucial in helping the firm consolidate a progressive turnaround of its business in the past five years.
The growth has been underpinned by the capitalisation of the conglomerate’s paper business, according to ART’s shareholder update.
ART directors were convinced that as Softex falls under the paper business, taking full control would streamline decision-making and eliminate red tape.
They said capital decisions would be based on a single shareholder, who would be able to respond faster to the environment.
“The offer was accepted and once consummated will leave ART as the sole shareholder of Softex,” ART said in a shareholder update on Friday.
“ART has offered and Nampak has accepted a total consideration of US$800 000 for the 1 448 500 ordinary shares of US$0,00066 each in Softex, all of which are issued and fully paid, and which constitutes 50% of the issued share capital of Softex.
“The purchase price shall be paid in six equal monthly instalments with the first instalment being due on or before the 30th of May 2021 and thereafter on or before the last day of each and every subsequent month with the last instalment being due on the 30th of October 2021.”
Softex manufactures hygiene solutions in Zimbabwe, where it has become a household name mostly known for its flagship tissue paper business which was established in 1983.
As of September 30, 2020, Softex had total assets worth $268,6 million, about US$3,18 million.
For Nampak, the deal will give it access to foreign currency after going through a difficult period in sourcing United States dollars for importing raw materials.
The firm has previously said difficulties in accessing foreign currency were of “paramount concern”.