Namibian Sun

The Development Bank of Namibia says it has not been approached to purchase shares Schwenk Namibia wanted to sell to Sino-Singaporean Company International Cement Group.

This follows the rejection of a bid by the company to buy Schwenk Namibia's shareholding in Ohorongo Cement by the Singapore Stock Exchange (SGX). The bank has also not indicated whether it remains open to the possibility of acquiring more shareholding, saying that such a decision would need to be well considered. The Singaporean bourse recently turned down International Cement Group 's (ICG) intent to purchase Schwenk Namibia's shareholding in Ohorongo Cement, saying that it did not see how the company would derive any benefit from the purchase of the shares. SGX said it is of the view that the proposed acquisition would not be profitable enough for ICG to satisfy stock exchange rules Business Times of Singapore reported.

SGX also noted that ICG does not have sufficient cash resources to fund the acquisition and intends to possibly obtain significant external loans from financial institutions and shareholders' loans.

“Such loans when considered with the potential losses of Schwenk Namibia will result in a material adverse financial impact on the enlarged group,” SGX said.

There was also no certainty that the target business will be able to generate sufficient profits to service the loans, and SGX said the acquisition would have put ICG out of a healthy financial position. When approached for comment to determine whether they were open to the possibility of acquiring more shareholding, the bank said it had not taken a position on a potential purchase and had not been approached either. DBN has not been approached to purchase Schwenk's shares in Ohorongo Cement, and the bank has not initiated talks for such acquisition,” its spokesperson Di-Anna Grobler told this publication when approached for comment.

According to her, DBN would have to properly assess any decision to buy into, or make an investment in, Ohorongo and would not go about it haphazardly. “Any investment decision is made subject to the bank having satisfied itself on the viability and developmental impact of the investment. We can therefore not speculate or pre-empt such a decision,” Grobler said. Grobler however did not respond to a question on whether its relationship with Schwenk Namibia had been affected in light of it wanting to dispose of its shareholding.

DBN had earlier said it would consult with government on the way forward when the news initially broke of Schwenk expressing its desire to sell to ICG. “The DBN is not familiar with ICG or its strategic intentions in Ohorongo Cement at this stage. However, a shareholders' meeting which includes ICG is scheduled to take place in due course,” the bank said in April in a statement.

The other minority shareholder in Ohorongo Cement, South African based lender the Industrial Development Corporation (IDC) has previously indicated to this publication that it would be open to acquiring a bigger stake. The IDC remains committed to Ohorongo. Further to this and in support of Namibia's indigenisation programme, it is our view that the locals (Namibians) should hold a considerable shareholding in Ohorongo. IDC, in consultation with other minority shareholders, is exploring possible opportunities aimed at achieving this objective,” its spokesperson Zama Luthuli said in April.

Schwenk Namibia owns a 69.83% stake in Ohorongo Cement together with DBN with an 11% stake, the Industrial Development Corporation with a 14% stake and the Development Bank of Southern Africa with the remainder of the shareholding. The Otavi based plant has a capacity of 1 million tonnes annually. Schwenk Namibia also holds a 100% interest in alternative energy sourcing firm EFF. The firm had entered into a conditional sale and purchase agreement with vendor Schwenk Zement International GmbH for the 100%. It had intended to fund the proposed acquisition through third-party financing or borrowings.

OGONE TLHAGE