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Nampak CEO Erik Smuts has resigned with effect from Thursday, with the debt-laden packaging company saying his decision reflects the fact the role is changing as a disposal programme is shrinking the group.
The imminent disposal of non-core assets and divestitures from unprofitable operations means the size and nature of the role has changed, the company said, thanking Smuts for his "loyal service in excess of 25 years". Nampak said Smuts established "a strong foundation for delivery of the turnaround initiatives."
Now valued at about R650 million on the JSE, Nampak's shares have lost more than two-thirds of their value over the past year, and it has been struggling under the weight of a debt pile that stood at a net R5.2 billion at the end of September. It has also been trying to convince shareholders to back a rights issue that will potentially be more than twice its current market value.
The company has also flagged operational difficulties and tough market conditions, notably in Angola and Nigeria, also recently announced the appointment of a chief restructuring officer, Michael Dorn.
At the end of March, it said its plans to exit from current businesses in Ethiopia, Kenya, Tanzania, as well as its general metals business in Nigeria, were "progressing well."
Smuts had been appointed CEO in January 2020, replacing André de Ruyter, who then went on to take the helm at Eskom, a position he has since resigned from.
Nampak said on Thursday it had appointed Phildon Roux, an independent non-executive director, as interim CEO with effect from Thursday, saying it was confident he will leverage his "extensive and strategic experience" in the fast-moving consumer goods sector, as well as his skill in organisational turnarounds.
Click here for details on Nampak's shares as well as other info.
Roux was appointed to Nampak's board in March, and was formerly the CEO of Adcorp and Pioneer Foods.
Chris Logan, MD of Opportune Investments, said turnarounds were notoriously difficult, with Nampak's "as difficult as it can possibly get."
"It is an excellent appointment with Phil having the energy, track record and skill set to be the best possible appointment," said Logan.
"It's not just Nampak's very high debt and the mishmash of underperforming diversified operations, but Nampak operates in extremely poorly managed economies like Nigeria, Zimbabwe and South Africa which adds another daunting level of complexity," he said.
Nampak's shares were up by just over 1% on Thursday morning, but are down almost 70% on a one-year basis.
