Namcor seeks N$800m bailout

Blames Mulunga for financial losses

The National Petroleum Corporation of Namibia (Namcor) is seeking between N$700 million and N$800 million to pay its N$1.1-billion debt attributed to the company’s former managing director, Immanuel Mulunga’s tenure.

Namcor spokesperson Utaara Hoveka told The Namibian this yesterday.

“He joined us on 1 October 2015, and the company had above N$500 million in the bank by March 2016. Over the years, we just continued with losses upon losses. We are seeking assistance from the government to get out of this. . . probably in the range of N$700 million to N$800 million. It’s needed urgently,” Hoveka told said.

Mulunga, who left Namcor in April 2023, yesterday denied being responsible for the company’s financial troubles.

“How can you still blame that on me? It seems like it’s easier to continue putting the blame on Mulunga forever. Plus the company made profits for the majority of the years that I was in charge, although there were losses also,” Mulunga said.

He added that the losses that were made during his tenure were not necessarily due to mismanagement but due to unfavourable market conditions and the unwillingness of the shareholder (government) to assist the company like other state-owned companies.

TROUBLE BEGAN

According to a statement issued by Hoveka yesterday, between 2022 and mid-2023 the company ordered more volumes than it could sell.

This decision, he said, left the company vulnerable to international market fluctuations, resulting in major losses.

“Namcor Trading procured fuel volumes in excess of its actual market demand, exposing the company to market volatility and leading to significant trading losses,” Hoveka said.

By March 2024, Namcor’s total debt had reached N$3.3 billion, he said.

The 2024 bailout helped reduce this figure to N$2.1 billion, with N$500 million paid to Gunvor Energy Rotterdam, the company’s main supplier.

Hoveka added that further austerity and cost-cutting measures have since brought its debt down to N$1.6 billion.

However, the issue remains unresolved.

In August 2023, Namcor signed a 24-month diesel supply contract with Gunvor Energy Rotterdam to avoid the collapse.

The deal, which is expected to last until September, is subject to high interest rates, with most repayments going toward interest instead of reducing the principal debt.

“This agreement was crucial to keeping operations running and ensuring fuel supply security,” he said, adding that it continues to work closely with its shareholder – the government – to resolve the remaining debt.

The debt, according to Hoveka, has almost pushed the company into liquidation.

The request comes just over a year after Namcor received a N$1.2-billion government guarantee in April 2024, which was used to settle portions of its escalating debts.

Despite that bailout, the company says it still owes N$800 million under a restrictive diesel supply agreement, and another N$800 million to other creditors.

The Namibian reported last year that Namcor faced more pressure from Augusta Energy, a United Arab Emirates-based fuel supplier, over a N$176-million debt. Augusta at the time threatened to seize oil stock in storage if Namcor failed to settle the debt.

Augusta was owed N$50 million by 31 October last year, with an additional N$126 million due by 30 November 2024.

At the same time, Namcor was also facing legal action from Ndakalimwe Investments, a joint venture with Revival Construction and Engineering, over an unpaid N$13.1 million for constructing a pipeline at Walvis Bay.

Last month The Namibian reported that the Windhoek High Court ordered the provisional winding up of Enercon Namibia and the close corporation Erongo Petroleum, which by November 2023 owed a combined amount of more than N$381 million to a Namcor subsidiary.

OWED

Hoveka also said Namcor clients owed the company N$841 million.

These clients, he said, were granted excessive credit outside approved company limits.

“Legal action has been initiated, and provisional liquidation orders have already been granted against some defaulters,” said Hoveka.

Furthermore, unauthorised asset purchases worth N$53.2 million have been flagged.

“The transaction was not approved by the board and was executed outside the company’s established governance and procurement frameworks. As such, it has been declared unlawful and subsequently nullified,” he said.

He added that the board has since authorised legal proceedings to recover the funds advanced under this arrangement and to ensure full accountability for the irregular conduct.

Namcor’s management of the national oil storage facility at Walvis Bay has also come under scrutiny.

Hoveka said the facility, despite being operational since March 2021, has not yielded any profit.

“Currently, the facility is not operating at full capacity,” he said.

Hoveka said Namcor has now implemented a turnaround strategy, focusing on tighter governance, improved operational controls.

COURT CASE

Hoveka also addressed media reports regarding a recent arbitration ruling involving Mulunga, saying that the issue of unfair dismissal has not yet been decided.

“The matter is scheduled to be heard between 8 and 10 September 2025. The June ruling dealt only with a counterclaim involving breach of contract – not the dismissal itself,” Hoveka said.

He added that Namcor has spent around N$6 million in legal costs since March 2023 on the matter and other legal proceedings, which it defended as necessary to protect the company’s interests and integrity.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.