KAT's management last week rejected a counter-proposal by Nafau after the union rejected the company's offer.

The Namibian has it on good authority that KAT cited financial problems as its reason for rejecting the union's demands.

The company has offered three months' full pay, one week's severance pay for every year worked and compensation for accumulated leave.

The union is pushing for two weeks' severance pay for every year worked, long-service bonuses of N$1 500, a relocation allowance of N$600 and a pro-rata bonus for workers employed after January 2006.

In addition, the union wants tax exemption on severance packages and an additional amount of N$1 500 for every worker "as a token of appreciation".

A union source told The Namibian that the package offered by the company was not acceptable.

"We had no choice but to go back to the negotiation table," the source said.

KAT's Managing Director, Frikkie Mouton, declined to comment.

"At this stage I'm busy with negotiations," he said.

Nothing seems to have come from recent attempts by the Karas Regional Council to persuade the company's management to halt the restructuring.

Regional Councillor Hilma Nikanor told The Namibian that a meeting held recently with Mouton and workers had been unsuccessful.

Nikanor said the Regional Council planned to hold a follow-up meeting where all stakeholders, including the KAT Board of Directors, union shop stewards and regional councillors, would be present.

The restructuring process was necessitated by the closure of KAT's unprofitable ostrich slaughtering plant.

According to financial results for the year ending June 2006 in possession of The Namibian, the company suffered a loss of N$8,7 million in the 2005-2006 financial year.

Despite impending job slashes, the financial results forecast a further loss of N$1,7 million for the 2006-2007 financial year.

In an earlier interview, Mouton declined to comment on the company's financial results.

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