TO realise its five-year business plan, TransNamib will seek N$2,5 billion through long-term borrowing, the rail transport executive, Johny Smith, told yesterday.
According to Smith, the commercial public enterprise would use local and regional lenders to fund its strategy, which involves refurbishing 33 locomotives and buying 10 new ones.
The company, which relies on the constant injection of capital by the government, would use its assets to raise the required funds this time.
The Namibian capital market is dominated by government debt with a few corporate bonds that led to the exposure of most investment fund managers and pension funds to the same risk.
Smith, who was appointed as the chief executive officer after years of infighting and no direction at the transport and logistics company, indicated that the parastatal is engaging local and regional lenders to get the funds.
Public enterprises minister Leon Jooste confirmed to The Namibian yesterday that the parastatal is on its own and he gave it the green light to seek funding for its strategy.
Jooste also explained that no funding guarantee would be extended to TransNamib, meaning that the company would have to use assets in its balance sheet to get credit in case it defaults.
He also said he was informed that the parastal is already in discussions with prospective lenders.
“TransNamib will be using their own balance sheet to raise the funding,” he said.
In the past, parastatals would either get bailouts or government guarantees for them to borrow in the market.
By the end of 2019, loan guarantees to public entities stood at N$11,5 billion, with Air Namibia getting a fresh loan guarantee of N$578 million in addition to its budget allocation.
According to a recent Institute for Public Policy Research (IPPR) report on public enterprises, TransNamib has not published an annual report since 2013 and has not submitted income tax or paid dividends to the government for many years.
TransNamib made a loss of N$317 million in 2018. However, in the 2019 financial year, the company generated N$517 million in revenue.
Under the current five-year business plan, it expects to make the first profit by 2022.
TransNamib is also set to receive a subsidy from the national budget of N$50 million in FY2020/21, according to IPPR.
On not publishing its financials, Smith indicated that the parastatal had its first annual general meeting in seven years on 28 March 2020.
“We are up to date to the last financial year, which ended 31 March 2019. After the annual report is presented to Cabinet we will publish it,” he assured.
