New RCC rescue plan confirmed
The RCC is finalising a new rescue plan, which will first be discussed by the full board and then with the government as the shareholder.
21 September 2018 | Government
Current RCC board chairperson Obren Sibeya, who took over from Fritz Jacobs who had championed the Jiangsu Nantong Sanjian deal until the government unceremoniously pulled the plug in May, told Namibian Sun this week that they were working on a new rescue plan.
“The RCC is at an advanced stage of finalising its rescue plan, which will first be discussed by the full board, the shareholder and thereafter communicated to all other stakeholders,” Sibeya told Namibian Sun.
“At this stage I cannot divulge any concrete information as contained in the plan, until the full board has deliberated on the draft rescue plan and has accordingly informed the shareholder.”
Sibeya added that because the transport ministry was finalising a bill that would see the RCC being placed under judicial management, the treasury had already been instructed to pay employee salaries.
The RCC was also honouring its obligations to its creditors, with the assistance of the government, Sibeya said.
“The shareholder, together with RCC, has been working together in the process of settling the verified claims of the creditors of the RCC. It is through this process that the RCC managed to stop auctions of its properties.”
In October 2016, it was reported that the RCC faced liquidation if the government did not urgently inject capital.
At the time, the RCC's liabilities were reported as N$775 million, while its assets were valued at N$190 million.
The government, through the transport ministry, pulled the plug on the RCC/Jiangsu deal a few months ago, after stern opposition.
The beleaguered RCC had increasingly come under fire for arranging off-balance-sheet financing from Jiangsu to the tune of N$580 million.
Repayment would have taken place in the form of participation by the Chinese company in current and other identified future projects for “five years or earlier”.
The 47% stake that would have gone to the Chinese firm in these projects was worth an estimated N$2 billion.
Judicial management delayed
The so-called judicial management bill, which will seal the fate of the RCC, is not expected to be tabled during the current session of the National Assembly.
The National Assembly session resumed last Tuesday and a number of bills are expected to be tabled, including those on financial institutions and markets, transfer duties, public enterprises, deposit guarantees and obsolete laws.
The RCC bill does not appear on the list.
Transport ministry spokesperson Julius Ngweda said certain aspects of the bill were still being worked on.
“We are still busy working on it; that is why it is not on that list,” he said.
Transport minister John Mutorwa was advised by attorney-general Albert Kawana to change aspects of the bill in July, a previous media report indicated.
Under judicial management, the current RCC board would be stripped of its powers.
When he announced that the RCC would be placed under judicial management, public enterprises minister Leon Jooste said: “The RCC has many creditors who will, while the company is under judicial management, have to wait to see their claims against the company settled.
“The judicial manager will proactively seek ways to restructure the debt of the company and respond to the financial demands of the company.”
Jooste said the judicial manager would be empowered to make far-reaching decisions on the company's business transactions, covering all aspects of its operations, human resources and financial management.