Windhoek Country Club Resort and Casino (WCCR) chairman Sven Thieme presents Government Institutions
THE Windhoek Country Club Resort and Casino (WCCR) on Tuesday removed the last remnants of its struggling financial past when it paid the final N$40 million it owed to the Government Institutions Pension Fund (GIPF).
Of this, N$10 million came out of the WCCR's own pocket. For the rest, the WCCR convinced FNB Namibia that the state-owned enterprise (SOE) is a sound business, getting the bank to invest in N$30 million worth of preferential shares.
The milestone "signifies the importance of having the right skills and attitudes in the successful management of business", GIPF chief executive officer David Nuyoma said accepting the N$40-million cheque from WCCR chairman Sven Thieme.
Thieme said the WCCR managed to pay the N$10 million from its cash reserves while still leaving a "significant" amount in its cash kitty. Getting FNB Namibia to buy into the WCCR also increased the SOE's creditworthiness, he said.
Settling the WCCR's debts - which, by 2009, also included N$227 million to Government - was the result of a turnaround strategy spearheaded by Thieme and the WCCR board of directors. When they inherited the driver's seat in 2003, the WCCR was technically insolvent with liabilities outstripping assets by N$170 million, and a gross operating profit of N$600 000.
Since then, the WCCR has been on a steady recovery path. By the end of 2011, the SOE reported revenue of N$97,6 million and earnings before income tax, depreciation and amortisation (Ebitda), used as a measure of a company's operating profitability, of N$19,7 million.
The board will continue with its programme to upgrade the WCCR, Thieme said. Its current strategic plan aims to push gross operating profit to N$50 million by 2014.
Nuyoma said since the GIPF got involved with the WCCR in 1994, it disbursed loans of N$105 million to the SOE. Of this, N$75 million were provided through a discretionary portfolio held by an asset manager and underwitten by Government, while N$30 million were provided through the GIPF's Development Capital Portfolio (DCP), now defunct.
With interest and penalties on late payments, the WCCR in total had to repay N$282 million to the GIPF.
With settling its debts, the WCCR became one of the few DCP investments where the GIPF got its money back. The 21 DCP loans became the subject of a police investigation after N$660 million were lost in dubious investments. Some of the dockets have already been referred to the Prosecutor General for decision, while the police is wrapping up their investigation into the remaining ones.