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Development Bank sheds tentative light on secret Ohorongo majority sale

Development Bank sheds tentative light on secret Ohorongo majority sale

In a carefully worded statement released on Thursday, the Development Bank of Namibia stated that it was not informed of the deal to sell Schwenk Namibia to an international investment group, until a day before the sale agreement was signed. That day was a Sunday.

Schwenk Namibia, a subsidiary of German industrial giant, Schwenk Zement International GmbH, is the holding link between the wholly owned parent and the Namibian operational entity, Ohorongo Cement Pty Ltd. It holds 69.83% of the equity. There are three minority Ohorongo shareholders, the Industrial Development Corporation of South Africa with 14.27%, the Development Bank of Namibia with 11.73% and the Development Bank of Southern Africa with 4.17%.

The sales purchase agreement between Schwenk Zement International and International Cement Group, lists the transaction at a consideration of US$104.4 million, approximately N$1.5 billion. This indicates that the buyers valued one Schwenk Namibia share equal to US$1.5 million. It further implies that the Development Bank of Namibia’s shareholding is worth around US$17.6 million or N$255.5 million at the exchange rate at the time of signing the purchase agreement.

“The Development Bank of Namibia and its shareholder the Government of the Republic of Namibia were 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,” the Development Bank of Namibia stated.

According to the bank, the purchaser appears to be a predominantly Chinese-owned company listed on the Singapore Stock Exchange, trading as International Cement Group.

The bank pointed out that the transaction does not affect their ownership in Ohorongo Cement, neither is there a dilution of shareholding. What is not explained is the obvious obsolescence of Schwenk Namibia as a holding company unless it has other commercial interests of which the Development Bank is not aware.

Signalling the uncertainty about the way forward and the bank’s continued position as a shareholder, it said these issues will only be clarified after consultation with the government.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at https://economist.com.na. His editorial focus is on economic analysis based on budget analysis, dissecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]