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Air Namibia debt haunts TransNamib

2022-03-24  Edgar Brandt

Air Namibia debt haunts TransNamib

Rail and road services operator TransNamib last Thursday received a letter of demand from now defunct Belgian company, Challenge Air, to pay more than N$160 million (9.863 million euros) for a botched lease agreement with Air Namibia in 1998. 

TransNamib is, however, unwavering in its stance that it was not part of the initial lease agreement. The letter from Challenge Air’s local lawyer, Sisa Namandje, demanded the amount be paid within 15 days of receipt of the letter, failure of which would result in an application for State-owned enterprise TransNamib’s liquidation. While Air Namibia was incorporated into TransNamib until the late 1990s, around the time when the lease agreement was made, the TransNamib board and management is adamant the company was in no way involved in the agreement with Challenge Air. 

A statement received from TransNamib yesterday confirms receipt of the letter of demand from Challenge Air. 

“TransNamib would like to reiterate its stance that it was not party to the settlement agreement entered into between Air Namibia and Challenge Air in 2019, in respect of the arbitration award. In the meantime, TransNamib is consulting its legal representatives on the appropriate action to defend this letter of demand,” reads the statement from TransNamib spokesperson Abigail Raubenheimer.  Air Namibia and Challenge Air parted ways after the former agreed in 1998 to lease a 351-seater plane from Challenge Air. 

However, the deal was subsequently cancelled because Air Namibia believed the aircraft to be defective. As a result of the cancellation, Challenge Air hauled Air Namibia in front of European courts in an attempt to recover 25 million euros.

Now, the latest letter of demand states that Challenge Air has “only received partial payments from Air Namibia before its liquidation”. 

Namandje cites a court order made in Germany in 2015 against Air Namibia and TransNamib. It was also reported in the local media that last year, Namandje threatened to seize TransNamib’s assets if government proceeded with the liquidation of Air Namibia. 

When contacted for comment yesterday, public enterprises minister Leon Jooste said the legal matter is nothing new. 

“TransNamib has been aware of this for some time. I believe that they will be opposing this matter,” Jooste responded while referring this reporter to TransNamib for clarity. 

Last year, TransNamib, which has been struggling financially, requested N$2.6 billion from government for their five-year business plan and to reach breakeven by 2023. The company made a loss of N$317 million in 2018 and in 2019 generated N$517 million in revenue.

2022-03-24  Edgar Brandt

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