14 February 2013

Namibia: Country Club Stands On Solid Balance Sheet

The golfing resort Windhoek Country Club Resort and Casino is now standing on its own feet, boasting a strong balance sheet which is so solid that this week the resort settled its loan with the Government Institutions Pension Fund (GIPF).

Government nearly came close to disposing the resort for a song in the open market about seven years ago, in a bid to block financial drainage and cut losses, but the board persisted in its insistence that the Windhoek Country Club Resort and Casino (WCCR) could be profitable. This week the WCCR board chairman Sven Thieme handed GIPF a cheque of N$40 million as settlement for the debt that goes back to 1994. The total value of loan repayments as of this week stood at N$282 million, including the nominal interest rate of 13,6 percent - and compounded interest charged on late payments.

"As in life so in business there have been challenges which we have had to overcome without losing sight of our strategic objectives. While to a large degree the Windhoek Country Club has been in a profitable trading position for quite some time now and we possess large cash reserves - we have not rested on our laurels. In fact we have completed numerous upgrades and we continue to look at areas where we can improve our product and add value for our guests," said Thieme.

It has been a long road since the 1990's, when the then Stock and Stocks that was building the resort fell behind the launch schedule and hosted the Miss Universe 1995 in an incomplete hotel. The company eventually couldn't pay its debt and government, as the guarantor, had to assume ownership of the debt. Subsequently the WCCR has been the subject of numerous negative media reports as it continued devouring large government financial injections, mainly in the form of debt guarantees, one after the other.

The WCCR was one of the first institutions to receive loans from the GIPF, through a combination of a discretionary portfolio held by asset management companies and the now defunct Development Capital Portfolio (DCP), GIPF's first unlisted investment vehicle.

The total loans disbursed amounted to N$105 million, with N$30 million through the DCP. There was also a bond of N$40 million registered over the WCCR property as security for loan.

For the 2012 financial year the WCCR recorded revenue increases of 9 percent representing N$106.7 million, from N$97.6 million in 2011. In 2010 revenue stood at N$93.1 million. Operational expenses rose by 9.2 percent from N$39.1 million to N$42.7 million.

Operating income rose 10.3 percent from N$51.6 million to N$56.9 million, while earnings before income tax, depreciation and amortisation show an increase of 16.6 percent up from N$19.9 million to N$23.2 million.

The chief executive officer of GIPF David Nuyoma says the investment into the WCCR "did not only facilitate the growth of our economy in terms of strategic infrastructure, promotion of tourism and the creation of much needed employment, but had indeed also generated more value to the fund and its members."

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