….Board chair says company is not for sale
The Roads Contractor Company-which could soon go under judicial management- dismissed claims that it intends to sell half of its stake.
The company, which is currently in the financial doldrums, has allegedly reached out to potential investors including overseas, two of the people said.
The stake could be valued at about N500 million, said a company source. The company’s debts are slightly under N$1 billion while its assets have an estimated value of N$300 million.
The Patriot has learned of a well-crafted conspiracy, which allegedly includes senior government officials, aimed at deliberately ensuring that a portion of the company is sold to an unnamed foreign investor from Russia Preliminary information have fingered RCC board chair Fritz Jacobs and Works and Transport minister Alpheus !Naruseb of allegedly having knowledge of the purported sale.
RCC workers last week raised the alarm on the possibility of attracting proposals with the intention of “looting” the company’s significant N$300 million property portfolio.
“Just want to let you know that about a week ago I was approached by prominent people businesspeople wanting to know the status of affairs of RCC. Of course, I did not provide them with any useful information. Strangely they told me that they were approached by the RCC Chairman with a proposal for them to consider buying 50% of RCC. And they only contacted me as part of their due diligence exercise. I cannot confirm their claim that Fritz approached them with a proposal to sell part of RCC, but based on my relationship with some of them I believe their claim hold water. My intention is to alert Hon. that there seems to be proposal presented by Fritz of selling part of RCC that is making rounds in some circles,” reads part of the text from a RCC source sent to a senior government official.
When approached to comment on the alleged sale and the decision to place RCC under judicial management, !Naruseb bluntly refused to speak on the two matters.
!Naruseb has been a strong proponent for the recapilatisation of RCC, and even went as far as saying that the company’s business plan is feasible.
The Patriot has it on good grounds that !Naruseb attempted to convince the Cabinet Committee on Overall Policy and Priorities to give RCC 30 more days in a bid to come up with a bankaable plan for the company’s future. The proposal was out rightly rejected, according to sources within the committee.
Jacobs this week vehemently denied any plan or having knowledge of a plan to sell 50% of RCC to a Russian investor when approached this week.
“Unfortunately for those who created such a story/claim: RCC is not for sale, unless if the shareholder decides so. Such stories are devoid of any truth and are malicious. It’s an attempt to distract us from focusing on the success of RCC,” said Jacobs in a text response.
Treasury has in recent months been encouraging State-owned enterprises to bring in internal and external investors and boost competitiveness under the public private partnership arrangement as part of the nation’s most sweeping economic reforms since Independence.
In fact, the Treasury’s growing desperation to avoid further descent into growth-crippling “junk” status – amid falling revenues, rising expenditure and ballooning debt obligations centred around state-owned companies such as RCC – has forced its leading officials to consider some outright asset sales and partial privatisation of some SOEs.
Inside the grim battle for RCC’s survival is a political battle that signifies the underlying hostility amongst ministers in Cabinet over the future of the embattled roads company.
The company’s leadership even went as far as making efforts to have the company recapitalised and also craft a business plan which has since been rejected. Public Enterprise Minister Leon Jooste said the business plan was rejected because it is not feasible, but !Natuseb maintains the plan is fisible.
The minister lamented that in the past turnaround strategies were approved without proper assessment to see if they are feasible.
The RCC board recently said it is confident that the company could be transformed from a historic liability to a shareholder’s investment within 3 -5 years provided everyone made constructive contributions.
To work towards that goal, a number of initiatives, plans and strategic efforts have apparently been developed and put into place, such as board governance structures, a 5-year strategic business plan and restructuring the organization.
According to the board, the company had commenced the process of strengthening its financials, especially the balance sheet, as well as the pursuit for interim cash requirements for operational turnaround and that it has identified the need of enhancing our human resource base in order to realign it to our new strategy.
To achieve the goal of a net asset base of N$ 900million, the board claimed the organization needed a once-off capital injection of N$300 million from its shareholder.