26 April 2019

Namibia: DBN to Consult Govt On Ohorongo Stake

The Development Bank of Namibia will consult the government on the way forward regarding their stake in Ohorongo Cement, which has been taken over by a Chinese-linked firm.

The DBN owns 11% in Ohorongo Cement, and said in a statement yesterday that they had not been warned by Schwenk Zement International that the company was selling its 69,83% stake in Ohorongo to Singaporean International Cement Group (ICG), which has ties to the Chinese.

The rest of the shares are owned by the Development Corporation of South Africa (14%) and the Development Bank of Southern Africa (4%).

"We will formally announce the way forward concerning our investments in Ohorongo Cement after consultations with our shareholder," DBN spokesperson Di-Anna Grobler said in a statement.

She added that "DBN is not familiar with ICG or its strategic intentions in Ohorongo Cement at this stage. However, a shareholders' meeting which includes ICG is scheduled to take place in due course."

Grobler said the minority shareholders of Ohorongo were only formally informed about the transaction at its last board meeting held in Windhoek in March.

The DBN said the reason why it invested in Ohorongo is to promote economic development in Namibia, and in particular to invest in strategic, significant projects, with the potential to impact positively on the socio-economic challenges faced by the country and on the transformation of Namibia.

"Furthermore, the equity participation has the objective of promoting the efficient use of resources, promoting local participation, playing a catalytic role in attracting other investors and lenders, and mobilising the flow of domestic and external resources to financially viable projects, which also have significant economic merit," the DBN said.

Singaporean International Cement Group (ICG) signed a share purchase agreement with German-owned Schwenk Zement International to acquire 69,83% share in Ohorongo Cement earlier this year.

According to the Singapore Stock Exchange News Service, the agreed total price is around N$1,5 billion, the DBN said.

The Namibian reported last month that two Chinese companies could dominate Namibia's cement industry if a Singapore-registered company buys Ohorongo Cement.

Although The Namibian could not establish a direct link between this company and the Chinese government, key people in the transaction and other past dealings connect the firm to Beijing.

Responding to questions from The Namibian last month, Ohorongo Cement's manager of customer relations and public affairs Frankleen Alberts said the final closing of the share purchase agreement is only expected on 31 July 2019.

Ohorongo's sales volumes have been under pressure since 2017 because of the current state of the construction industry in Namibia. Moreover, a continued downward trend of the industry is expected in 2019, driven largely by the lack of construction projects of the public and private sector.


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