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LAGOS (Capital Markets in Africa) – Nampak Limited fell after Africa’s biggest beverage-can maker said cash stranded in Nigeria and Angola rose in the five months through February as it continues to battle to get money out of the countries.
The stock fell as much as 2.3 percent to 15.99 rand before trading 0.7 percent lower at 10:30 a.m. in Johannesburg, extending its decline this year to 12 percent and giving the company a market value of 11 billion rand ($855 million).
“Slower than optimal cash extraction from Nigeria and Angola as well as the exposure to currency volatility of cash held in these restricted areas remain the key issues impacting overall performance,” the Johannesburg-based company said in a statement on Wednesday. “While we have taken all possible steps to extract cash from these markets, we cannot rule out further impacts resulting from exchange rate fluctuations.”
Total cash on hand in the two African countries increased 10 percent to 2.2 billion rand, Nampak said. Its hedged position rose to 68 percent from 50 percent as it covered 1.5 billion rand against the effects of currency fluctuations at Feb. 28. Operations can be sustained at current production for 24 to 30 months with existing financing and funding facilities for Angola and Nigeria, it said.
Foreign companies have struggled to repatriate earnings from Nigeria and Angola because of the scarcity of foreign exchange. The situation in Nigeria “is being closely monitored and alternative methodologies for the extraction” of dollars are being investigated, Nampak said.