DBN clarifies proposed Ohorongo Cement share transaction

WINDHOEK, APRIL 25 – The Development Bank of Namibia (DBN) herewith announces the departure of SCHWENK International from Ohorongo Cement, as a co-owner and shareholder.

This follows the 100% sale of SCHWENK Namibia to what appears to be a predominantly Chinese-owned company, listed on the Singaporean Stock Exchange, known as International Cement Group (ICG).

Ohorongo Cement (OC) was until recently owned by SCHWENK Namibia (SN) 69.83%, Industrial Corporation South Africa (IDC) 14.27% and Development Bank Namibia (DBN) 11.73% and Development Bank of Southern Africa (DBSA) 4.17%.

The Development Bank of Namibia and its shareholder the Government of the Republic of Namibia was not aware of Schwenk International’s intention to sell. The minority owners and shareholders of Ohorongo, were only formally informed about the transaction at its last Board Meeting held in Windhoek recently.

Communication informing DBN of such intention was sent on Sunday 10th March 2019. On Monday 11th March 2019 Schwenk International announced that they negotiated and signed a Sales Purchase Agreement (SPA) with International Cement Group (ICG) to sell 100% of their stake in Schwenk Namibia.

The SPA is for ICG to acquire 100% of Schwenk International’s stake in Schwenk Namibia, which ultimately owns a 69.83% stake in Ohorongo Cement. According to the Singapore Stock Exchange News Service (SENS), the agreed total price is US104.4 million in cash (approximately N$1.5 billion using a rate of USD to NAD14.5212 as at 12 March 2019).

OHORONGO CEMENT SHAREHOLDING
In terms of the deal, International Cement Group (ICG) will take ownership of Schwenk Namibia and through its ownership, will own 69.83% of Ohorongo Cement.

The 30.17% held by DBN, DBSA and IDC is direct ownership in Ohorongo, and is not shares in Schwenk Namibia. The sale of Schwenk Namibia does not reduce the number of shares owned by DBN, DBSA and IDC.
ACQUIRING SHAREHOLDER (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.

DBN’S INVOLVEMENT
The overriding objective of DBN in undertaking equity investments is to promote economic development in Namibia and in particular to invest in strategic, significant projects, with the potential to impact positively on the socio-economic challenges faced by the country and on the transformation of Namibia.

Furthermore, the equity participation has the objective of promoting the efficient use of resources, promoting local participation, playing a catalytic role in attracting other investors and lenders and mobilising the flow of domestic and external resources to financially viable projects which also have significant economic merit.

WAY FORWARD FOR THE DEVELOPMENT BANK OF NAMIBIA
We will formally announce the way forward concerning our investments in OC after consultations with our Shareholder. – DBN