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TransNamib sells properties to raise funds

TransNamib says it is disposing its non-core properties around the country as it seeks to raise at least N$2.5 billion needed for the implementation of its turnaround plan.

The disposals, which have Cabinet approval, will see the rail operator hold a series of auctions starting this month for both vacant and improved properties in Windhoek, Seeis, Okahandja, Otavi, Karibib, Omaruru, Otjiwarongo, Maltahohe and Keetmanshoop, as it seeks to leverage the assets to raise the much-needed revenue.

The company, which has a property portfolio worth N$2.4 billion, is currently faced with an industrial action after management rejected employees' wage increase demands, amid concerns of an unsustainable wage bill.

“The properties being auctioned form part of the non-core properties that form part of the approval by Cabinet which gave TransNamib permission to alienate some of its non-core properties to raise funding for its Integrated Strategic Business Plan (ISBP),” TransNamib’s Manager: Corporate Communications, Abigail Raubenheimer told The Brief.

“The company needs to raise a total of N$2.5 billion over the period of five years to support the implementation of the Business Plan and to be able to lift itself from insolvency. The funds are expected to be raised from operations, debt, leveraging and/or selling off non-core assets and shareholder contributions.”

Raubenheimer justified the disposal of properties from the nine towns saying “these are the non-core commercial properties that have been identified for alienation.”

The TransNamib spokesperson added that the second stage of the non-core property disposal through an auction process will only be open to staff.

“Yes, this is just the initial stage in terms of the project to alienate non-core properties. Thus, the properties which are not central to the operational objectives of the company will be used to raise funding for the company’s business plan. The second stage of the project is the internal auctions for the staff members,” she said.

She noted that the company had initially planned to source funding through leveraging its non-core properties.

“However due to the impact on Covid 19 on the revenue of the Company, a decision was taken to proceed with the alienation of its non-core properties, as approved by Cabinet,” Raubenheimer said.

The national railway operator is currently incurring a N$10 million monthly loss due to delays in securing funding for its Integrated Strategic Business Plan (ISBP) which was coined in 2018, with the aim of turning around the financial fortunes of the rail operator into a profitable entity.

TransNamib’s strategic plan had hoped to make a financial breakthrough in 2023, attaining a trustworthy customer experience by transporting three million metric tonnes of cargo by 2023.

The company, which banking on a Development Bank of Namibia and Development Bank of South credit facility to fund its turnaround strategy to the tune of N$2.6 billion, has blamed its precarious financial position on salary increases and benefits awarded to staff over the years despite accumulated losses amounting to over N$ 4 billion for the period 2010-2017.

 

 

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Last modified on Wednesday, 24 August 2022 18:16

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