Namcor gets N$1,2b Govt bailout

… paid directly to suppliers

The government’s N$1,2 billion bailout for the National Petroleum Corporation of Namibia (Namcor) has been paid directly to Namcor’s suppliers and creditors.

The bailout, aimed at stabilising the national oil company, was paid last month.

Namcor confirmed the payment yesterday.

The bailout means Namcor, which owed its suppliers N$1,9 billion as of September 2023, now has a lifeline to avoid liquidation.

“Namcor received a sovereign guarantee to the tune of N$1,2 billion. I must make it clear that this did not involve any direct cash injection to Namcor. Financial institutions paid the money directly to our creditors and suppliers around mid April 2024,” Namcor spokesperson Utaara Hoveka confirmed to The Namibian.

A sovereign guarantee means that if Namcor defaults on their debt, the government will step in and cover the cost.

This is the second publicly known bailout Namcor has received, as the government made a cash injection, including paying off Namcor’s debts, of nearly N$260 million in 2010.

Unlike typical cash injections, the 2024 bailout was paid directly to Namcor’s suppliers and creditors.

This move aims to strengthen Namcor’s financial position while settling debts and supporting its operations.

The national oil parastatal made a N$700-million loss in the 2022/23 financial year.

“The guarantee is vital to execute Namcor’s turnaround strategy and to sustain its operations. We have identified control weaknesses that gave rise to financial losses and improved governance processes to prevent re-occurrence,” said Hoveka.

Board chairperson Jennifer Comalie yesterday said the loans have been crucial in stabilising the company during challenging times.

“It has provided much-needed liquidity, allowing us to meet immediate financial obligations, maintain operations and preserve jobs,” she said.

POWER STRUGGLES, DEBT, DRUGS, SUSPENSIONS

Namcor has dealt with it all.

Over the years, the company has been immersed in debt, power struggles, drug accusations, mismanagement of funds, managing directors’ suspensions and allegations of corruption.

As of September 2023, Namcor owed its creditors N$1,9 billion – a decrease of N$600 million from N$2,5 billion the parastatal owed in May 2023.

Some of Namcor’s suppliers had threatened to take action, including liquidating the state-owned oil company.

To fend off such demands before the government’s intervention, the Namcor board gave suppliers guarantees that it would settle its debts by 30 November 2023.

Those suppliers include European commodity trader Gunvor Group, owned by Swedish billionaire Torbjörn Törnqvist.

Namcor owed the company N$1,1 billion. The two entities have now entered into a debt restructuring agreement after getting board approval, as well as ministerial support.

Namcor has, in addition, reached an agreement with United Arab Emirates company Augusta Energy, which had threatened to take over its oil stock due to a N$176-million debt.

Namcor has further entered into an agreement with PetroSA, of which oil stock was sold by the parastatal without paying for it.

These agreements were made during Shiwana Ndeunyema’s time as acting managing director, which started in April 2023 and ended in January this year.

Ndeunyema, whose permanent position is that of business strategy executive, lasted in the acting role for eight months after Namcor’s board was forced to reverse its initial decision of appointing Lionel Matthews as interim managing director.

Matthews, a former Nedbank managing director, was set to act in the position for six months following the suspension of Imms Mulunga.

However, the board made a U-turn on the decision after a report by The Namibian revealed that Matthews was part of a consortium called Fullbright Investments and Omahooli Solutions, that won a contract worth N$1 billion to build, finance, operate and maintain oil depots for Namcor.

The interim managing director appointment situation was brought up when Mulunga was suspended in early April 2023, just days after board chairperson Jennifer Comalie was arrested on drug charges.

The drugs, suspected to have been planted in Comalie’s car, were discovered while she was in a board meeting believed to be about Mulunga’s suspension regarding the payment of N$100 million for an oil block in Angola.

The board said Mulunga made the payment without authorisation, but the deal has, however, been hailed by industry players.
The Anti-Corruption Commission also said Mulunga acted in the best interest of the state-owned enterprise, as well as the country.

Mulunga, however, remains on suspension and has since been given additional disciplinary charges for his alleged involvement in a N$53-million transaction between Namcor and military contractor Enercon.

Mulunga has denied any wrongdoing. Comalie said the funds have given them an opportunity to restructure and implement necessary changes to improve Namcor’s efficiency and sustainability.

“With this support, we’ve been able to renegotiate terms with creditors, address legacy issues and implement strategic initiatives aimed at long-term viability,” she said.

FRESH START

The Bank of Namibia’s deputy governor, Ebson Uanguta, has since taken over the managing director acting role, from January until June this year. Uanguta was brought in to give Namcor a fresh start, especially in handling the bailout.

Under his leadership, the team has been identifying weaknesses that gave rise to the financial losses, and improved governing processes to prevent re-occurrence.

“Ever since he (Uanguta) came in things started moving differently. He is on everyone’s case to finish their tasks. Reports should be concluded. You will have to do it even if it means working over the weekend. He implemented control measures and transparency,” a source said.

In February, the police arrested four people accused of stealing a total of 79 000 litres of diesel valued at N$1 million from Namcor.

Namcor also this year tipped off the police to investigate a potential large-scale fuel theft after 69 trucks, dispatched from a Namcor depot, reportedly failed to deliver their cargo to customers.

The value of the missing fuel is not yet confirmed, but sources familiar with the case estimate losses at around N$49 million.

The government allegedly wants to start on a ‘clean slate’ with Namcor, which includes getting rid of the current board and Mulunga.

The current board’s tenure was supposed to end last year, but it was extended to allegedly finish dealing with Mulunga’s disciplinary hearing.

“The term of the current board will come to an end in June 2024. We await further updates from the appointing authority, specifically the minister of finance and public enterprises in this regard,” said Hoveka.