RCC unpaid overdraft puts head office building at risk

WINDHOEK, 18 JUN  – The Roads Contractor Company (RCC) has been given 30 days by Bank Windhoek to pay back an overdraft of N.dollars 80.2 million, or face auctioning off of its assets.
Failure to pay the money will result in the auctioning off of the State-owned enterprise’s properties attached to the overdraft, including its head office building in Windhoek’s Southern Industrial Area.
Public Relations Officer (PRO) of the Ministry of Works and Transport, Julius Ngweda confirmed to Nampa on Monday that an urgent meeting was held by the ministry regarding the payment of the overdraft.
He said the ministry was only notified last week Wednesday by RCC about the outstanding debt.
In a letter obtained by Nampa on Monday, RCC’s Acting Chief Executive Officer, Seth Herunga wrote to Minister John Mutorwa, requesting a bail-out for the debt.
“The company’s dire situation has been worsened by lawsuits against the company for non-payment of creditor’s obligations,” he stated in the letter.
Herunga wrote that the company’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 that would result in a 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.dollars 2 billion. If we lose the property, it will be a big loss to Government,” he added.
He indicated that the RCC’s plant and machinery had been auctioned off in Keetmanshoop and Ondangwa in a forced disposal, whose proceeds were by far below the market value of the assets.
The assets in Gobabis and Ondangwa were auctioned off last week, whilst assets in Keetmanshoop were auctioned off last month for N.dollars 4.2 million owed to Namibia Protection Services.
Additionally, the RCC also owed Power Star and NedLoans N.dollars 167 000 and N.dollars 400 000 respectively.
Ministry of Works and Transport Permanent Secretary, Willem Goeieman is expected to urgently meet with the bank before the end of this week regarding matter.

NAMPA