Scramble to avoid RCC assets sale
The beleaguered RCC is facing the real possibility that its prized head office will go under the auctioneer's gavel.
20 June 2018 | Government
This comes amid the planned auction of its head office in Windhoek's southern industrial area.
It was reported this week that a commercial bank plans to auction off the building to recover money it had lent to the parastatal.
Herunga told Namibian Sun, however, his line ministry was working hard to avoid the sale of assets through auctioneering.
“The minister has tried to engage other ministries to ensure that we avert that assets will be auctioned off. My understanding is that he is engaging with the bank as well,” said Herunga.
Works minister John Mutorwa has written to the finance ministry in a bid to ward off the sale of RCC assets through auctioning, while making particular mention of its head office.
According to Herunga, if the head office were to be sold, a new developer stood to make considerable money off the sale of the property. He added the RCC's machinery and equipment had been sold in the past for a song by auctioneers.
Works ministry permanent secretary Willem Goeiemann has been instructed to engage RCC's lender to avoid having its property auctioned off this week, while Herunga had also received a set of instructions from Mutorwa.
Nampa reported the RCC risked having its Windhoek head office auctioned off.
“The company's dire situation has been worsened by lawsuits against the company for non-payment of creditor's obligations,” Herunga wrote to Mutorwa.
In the letter, Herunga said the RCC's main financial banker, Bank Windhoek, whose outstanding debt is secured against the entire head office property, was calling up the debt and invoked the security clause, which would result in the forced disposal of the property, should the company fail to pay the outstanding instalments overdue by 30 days.
“However, the property is having an investment development portfolio of N$2 billion. If we lose the property, it will be a big loss to government,” he said.
“We thought we secured funding, but we lost it,” he continued, referring to the controversial N$580 million partnership deal the RCC had signed with Chinese company Nantong Sanjian to boost its finances and survival chances, but which government recently declared illegal.
Herunga said it was difficult to manage the company's precarious financial situation without funding.
“Without funding, we are against the wall.”
Cabinet in September 2017 proposed having the RCC placed under judicial management. Under judicial management, a manager will be appointed by the High Court to try and revive the operations of the entity, while its assets cannot be sold off to pay creditors.
Mutorwa must still table a bill to place the entity under judicial management.