10 July 2018

Namibia: Namsov Stand-Off Drags On

The decision by Bidvest Namibia to buy a fishing factory from its own company - Namsov Fishing - for N$210 million has left several business people fuming.

The Namibian has been reporting since May this year how Namsov minority shareholders complained about being bullied into agreeing to sell the company's properties cheaply.

Namsov Fishing (formerly a Namibia and Soviet Union joint venture), employs close to 1 200 people, and is owned by Bidvest Namibia Fisheries (69,5%), Namsov Community Trust (10%), Henties Bay People Fishing Company (5,5%) and Prestige Fisheries Holding (4,9%).

The other owners were Khomas Fishing and Packaging (4,9%) and Oshakati Fishing Company (4,9%).

Bidvest Fishing Namibia, however, decided to pull out of the fishing business, partly because of fisheries minister Bernhard Esau's decision to reduce their fishing quotas in recent years.

The company, through its subsidiary Bidfish, wants to sell its stake in Namsov and other fishing entities. But the process has been hit with controversy, thereby making the company's exit appear intricate.

However, documents so far show that the company wanted to take 100% charge of Namsov's properties, estimated to be worth around N$450 million, by March this year.

Bidvest wants to sell its shares in Namsov to Tunacor, excluding assets in Namibia, Angola and Mozambique.

The Namibian understands the Namsov board met on 25 June 2018 to discuss the sale of its properties. One of the properties discussed was that owned by a Namsov subsidiary called United Fishing Enterprises.

Documents show that United Fishing Enterprises owns Erf 1239 and Erf 3685 at Walvis Bay, and all buildings, fixed assets, plant and equipment of the canning factory on these properties. The two plots are on seven hectares (seven average football fields) of land.

Bidvest valued the properties at N$229 million in March this year while there was a N$290 million offer, documents show.

A source familiar with this matter said the 25 June 2018 Namsov board meeting decided to sell the properties owned by United Fishing Enterprises to Bidvest for N$210 million.

A person involved in this matter said this effectively meant that Bidvest bought Namsov property for themselves cheaply.

According to the same source, Bidvest overruled the concerns and objections of minority shareholders in this matter.

As the biggest shareholder, Bidvest had enough Namsov directors on the board to make decisions, even when minority shareholders disagreed.

Namsov board chairperson Sebby Kankondi declined to comment on the matter yesterday.

"The laws that regulate listed companies will not allow us to share the information in the fashion you requested it," he said.

However, documents show that a company known as New Economic Empowerment Enterprise Proprietary Limited wanted to buy Namsov's United Fishing Enterprises for N$291 million, but Namsov directors who represent Bidvest rejected the offer.

New Economic Empowerment Enterprise wanted to pay N$320 million, including commission of N$29 million for J&B Estates, which represented them in the transaction.

Little is known about the New Economic Empowerment Enterprise company - who its main owners are, and whether it was genuine in its bid.

It appears Namsov had reservations about New Economic Empowerment Enterprise and the offer, which seemed to have been planned to push Bidvest to pay more for the factory.

The website of the Business and Intellectual Property Authority (Bipa) which registers companies shows that the New Economic Empowerment Enterprise is not yet registered, but only reserved.

There has been a disagreement among Namsov owners about how much their fishing company is worth.

The Namibian reported in May 2018 that minority owners questioned how Namsov assets valued at N$530 million in 2017 suddenly fell to N$450 million.

Kankondi told the Namsov directors' meeting in March this year that the value of the assets went down because of several reasons, including the fall of the Angolan currency, which affected the value of the company's assets in Angola.

The value of Namsov assets, according to him, also decreased because of the government's decision to ban pilchard fishing for three years.

"Property prices are under pressure, which seems to be as a result of the general decline of the Namibian economy," Kankondi said.

He added: "Bidfish would not be fulfilling their fiduciary duties should the shareholders agree to a value that is about N$176 million more than what the informed value of the assets is."

Besides the sale of the United Fishing Enterprises properties, Bidvest is also said to be finalising the sale of their shares in Namsov to Namibian fishing outfit, Tunacor.

Bidvest would have to announce the deal on the Namibia Stock Exchange when it is finalised.

The value of that transaction is not known, but Tunacor is owned by Namibians, including businessman Sidney Martin, through Beluga Investment, and a consortium called Kaume Group, which is fronted by businessman Olavi Hamutumwa.

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