Second chance for RCC

The Roads Contractor Company (RCC) has confirmed it is in the final stages of securing financing that will enable it to implement projects and that does not require any government guarantees.RCC board chairperson Fritz Jacobs said the off-balance-sheet financing had been sought with the approval of cabinet.This development now means the RCC board has secured financing to implement its projects, Jacobs said in a brief statement.According to him, the RCC was tasked to accelerate a process to secure funding, which will not rely on government guarantees.“We are currently finalising an off-balance-sheet funding solution. This funding does not require government guarantees, as per cabinet decision,” Jacobs told Namibian Sun. This would help normalise the RCC's cash flow woes, he said, while strengthening its balance sheet.Jacobs did not provide further details, but said the RCC would now have to put work into strengthening its corporate governance framework and organisational structure. Jacobs would also not comment on the future of acting RCC CEO Seth Herunga and said the board's priority was now to stabilise the beleaguered entity. The appointment of a substantive CEO, he said, would be attended to afterwards. “We have to focus on the right priorities,” Jacobs said.Works minister John Mutorwa said during a recent public briefing the RCC board would have to present a strong enough case to him, in terms of a turnaround strategy.He would then escalate this to a cabinet committee on overall policy and priorities, which will then discuss the turnaround strategy before cabinet makes a final decision on the future of the RCC.“I was thoroughly briefed about the self-sustaining model and we are waiting for the RCC's model. Some people doubt that the RCC can be turned around, but you must give people the benefit of the doubt,” said Mutorwa. The RCC board was working towards finding a solution, Mutorwa stressed.“If we find a solution, I will report back to the cabinet committee on overall policy and priorities and then cabinet. I cannot say what the [final] decision will be. Only if everything fails, then we will go to judicial management,” Mutorwa said.The RCC recently had 13 of its pickups attached for auctioning by Nedloans, while RexQuip also attached a range of RCC vehicles and equipment for auctioning. Another creditor, Namibia Protection Services, was owed N$4 million.These developments were, however, not a cause for concern to Jacobs, who said that tireless efforts were being made to ensure the continued operations of the parastatal.“We are not taking our eye off the ball. We will very soon make very significant announcements,” Jacobs said. First of many plansJacobs would also not go into detail about the off-balance-sheet financing option that the RCC was pursing.The RCC last year planned to turn the site of its Windhoek head office into an N$800 million business, it was reported. The RCC would have built its plaza opposite M&Z Motors on a 5.3 hectare piece of land donated to the entity by government. The plan included widening a stretch of Lazarett Street into four lanes that connect to where the new Nictus furniture showroom is.Part of the plan was also is to privatise a portion of the land for the construction of underground parking and offices. The documents do not, however, explain the disadvantages of the plan, but said the plaza will be a good deal for the RCC.More recently, the RCC was said to be in bed with a Chinese firm that is believed to have made available N$570 million in financing to the parastatal, according to a media report. “RCC has teamed up with a Chinese company called Jiangsu Nantong Sanjian (Pty) Ltd on a project participation basis. The Chinese firm will provide a N$570 million loan facility to RCC. However, we doubt this is a loan, it is more like a joint venture,” a source with intimate knowledge about the happenings at the parastatal told a weekly newspaper.Judicial management Public enterprises minister Leon Jooste in September 2017 sought to place the RCC under judicial management due to the company's inability to make profit and always requiring government bailouts.If judicial management is approved, the current RCC board will be disempowered.The duration of the period of judicial management, if approved, cannot be pre-empted, Jooste said at the time. He also explained that the RCC's current 393 employees will not be affected, because judicial management will try and prevent the company from closing down.“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.Furthermore, Jooste said the judicial manager, if appointed, will be empowered to make far-reaching decisions on the company's business transactions, covering all aspects of its operations, human resources and financial management. OGONE TLHAGE

Second chance for RCC

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Namibian Sun 2025-08-05

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Second chance for RCC

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Namibian Sun 2025-08-05

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