New Nampak CEO to start on Monday, as De Ruyter leaves to head up Eskom

JSE-listed packaging company Nampak [JSE: NPK] says its new CEO Erik Smuts will start his duties on Monday, as the group's outgoing CEO Andre de Ruyter joins struggling power utility Eskom earlier than planned.

Africa's largest packaging manufacturer on Friday morning issued a notice to shareholders indicating that Smuts would take over from De Ruyter 10 days earlier than planned.  

Public Enterprises Minister Pravin Gordhan announced De Ruyter's appointment as head of the debt-ridden power utility in November, following a search for a new CEO that lasted months. He is taking over from the utility's acting CEO and chairperson Jabu Mabuza. 

De Ruyter was meant take up his duties on January 15, but the implementation of Stage 6 load shedding in early December led Cabinet to ask De Ruyter to start earlier in order to focus on the power crisis. 

Business Day previously reported that De Ruyter started at the power utility on December 25, 2019. However, Eskom has not confirmed this to Fin24, saying it would be providing on update next week. 

The shareholder notice from Nampak is the latest confirmed update on the matter.

"Mr de Ruyter will commence his services with Eskom earlier than expected," the notice read.

De Ruyter's appointment at Eskom was heavily criticised by the Economic Freedom Fighters for the fall of Nampak's share price under his leadership, among other things. The National Union of Metalworkers of South Africa, meanwhile, criticised his appointment as being anti-transformative, and promised to protest on his first day. 

Cabinet, Mabuza and Gordhan have backed De Ruyter.  Mabuza told journalists at a briefing on Eskom's interim results in late November that share price is not the only measure of value for a company, and that De Ruyter was the most suitable candidate to take the helm at the power utility.

Nampak's share price opened at R6.87 on Friday morning and was trading 0.15% stronger than the previous close at R6.81 by 11:35.

The packaging company's share price plummeted 17% on the release of its annual results for 2019 in late December. Nampak reported a loss of R390m, compared to the previous year's profit of R1.2bn, Fin24 previously reported.

The group's headline earnings per share declined by 69% from 173.3c to 54.1c and the board resolved not to pay out dividends until the debt levels were "significantly" reduced.

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