Staff Reporter
WINDHOEK, November 24 — Namibia’s state-owned oil company, Namcor, has taken a strategic step to counter its “unprecedented” financial losses by entering a supply agreement with Gunvor Group Ltd., a prominent global energy commodities trading company. The company, grappling with significant setbacks stemming from market volatility and governance issues, recently disclosed a substantial loss of 700 million Namibian dollars (approximately $37 million), leading to severe cash flow constraints.
To stabilize its operations, Namcor has inked a crucial supply deal with Gunvor, marking a pivotal move in addressing what acting managing director Shiwana Ndeunyema describes as an “interim solution for a potentially permanent problem.” Ndeunyema emphasizes that the primary goal is to “ensure continued supply of product to supply our customers.” Gunvor, the trading company involved in the agreement, has opted not to provide comments on the matter at this time.
Namcor’s financial challenges are attributed to a combination of factors, including market volatility and a “significant breach of internal controls and governance systems,” as highlighted in the company’s statement. In response to these issues, Namcor has crafted a recovery plan that incorporates a necessary capital injection.
The collaboration with Gunvor stands as a pivotal measure in Namcor’s endeavour to navigate through its financial turmoil. While the agreement acts as an immediate solution, the company’s long-term stability depends on its successful implementation of the recovery plan and its capacity to address the foundational governance issues contributing to its current predicament.
