Nampak Limited (NPK) Earnings Call Transcript & Summary

The results are on the screen, Chair.

The results on the screen. So special resolution #1: For, 91.4%; against, 8.6%; and a very small abstention. Ordinary resolution #1: 88.76% for that, 11.24% against it and small abstention. And ordinary resolution #2: 91.35% for, and 8.65% against, with small abstention. So all the resolutions have passed with the requisite majority. Before I close the meeting, the one issue which the Board and specifically the RemCo has been dealing with during, I'd say, the last couple of weeks, has been the time delay between the date on which we completed the agreement in principle with the executives in question and the date on which the transaction was implemented. So as most shareholders are aware, we did the rights issue at ZAR 175. And during the course of implementing the incentive scheme, which is detailed in the circular, Nampak suffered a cyberattack, which caused a number of constraints in terms of, one, our financial systems but, secondly, our business operations. So this really resulted in a significant delay between the time period which the scheme was agreed with the executives. And just to refresh everybody's mind, I think shareholders, at the point when we were doing the rights issue at ZAR 175, were particularly interested to understand the alignment between shareholders, management and the company. And as part of the roadshow, we specifically can the shareholders on the type of alignment, which the shareholders would like to see. And part of this feedback resulted in the shareholders themselves -- the executives themselves acquiring shares pursuant to the rights issue process at ZAR 175 and also then participating in the scheme, where we have provided a loan to them to acquire further shares in Nampak. So that was all done at ZAR 175. Unfortunately, the share price -- fortunately to shareholders, but unfortunately for the transaction mechanics, the share price significantly appreciated between the rights issue date and the implementation date of the scheme. So it's created substantial value for shareholders, and we have commended the executive for their hard work and the efforts which they've made to really turn around the fortune of Nampak, I guess, finally, culminating in the refinancing, which was announced to shareholders, where we refinanced all our onerous debt and now sit with a very stable balance sheet. So from a Nampak point of view, we've now got a stable earnings stream, and we've got a stable debt package, which has secured the balance sheet. So the markets have recognized that, and the share price has appreciated substantially to over ZAR 400. Now the delayed implementation of that scheme has resulted in a tax event where the executives will be required to pay a substantial tax amount on the difference between those 2 prices. So we are not keen to see the executives sell any shares in question in order to meet that obligation, and the Remuneration Committee has been engaging with the Board and with the executives to determine what is the most appropriate structure to alleviate the cash flow, which is required by the executives to meet their tax obligations. In addition, as part of the feedback with shareholders, there were certain concerns raised by shareholders with respect to the locking of the executives. And in principle, we've concluded that, one, we will be completing a restraint agreement and a notice period agreement with the executives. And as part of those agreements, we will be making cash payments to the executives. So that's one part of addressing shareholder concerns and alleviating some of the cash flow constraints. And secondly, we will be engaging with those executives to see what assistance they may require in order to meet any tax consequences of the proposed transactions. So I guess -- and the principle which we've agreed with the executives is that essentially, they should be in the same position from a personal tax point of view as if the scheme was implemented at ZAR 1.75 (sic) [ ZAR 175 ], and the difference between any cash flow amounts that are incurred as a result of delayed implementation is a discussion and assistance which the company will seek to provide. So I've got the other members of the RemCo on the call or in the meeting, and Simon Ridley is -- Chair of the Audit Committee, is also present. I don't know, Simon or Nooraya, whether you want to make any comments at this stage or whether my description is adequate for the purposes of this meeting.

No, I think that was perfect, André. I think basically, essentially, we are making good the executives on the additional tax potentially in terms of a -- from a financial assistance center, and that will be finalized in due course. It's not finalized yet.

Chair, Simon here, if I may. We will be providing full detail in the remuneration report. So yes, which will be discussed to shareholders.

So there -- is there no other comments? Omeshnee, is there any other matters that I need to deal with before I close this meeting?

No, Chair, there aren't any further questions. No further business for this meeting.

Okay. Thank you very much for your attendance at our general meeting. If there's no other business, I declare this meeting closed.