WINDHOEK – The Development Bank of Namibia (DBN) and other minority shareholders in Ohorongo Cement are unsure about the strategic intentions of a predominantly Chinese company, International Cement Group (ICG), which is set to become Ohorongo’s majority shareholder.
Without knowledge of its fellow shareholders, Schwenk International sold Schwenk Namibia – the majority owners of Ohorongo – for N$1.5 billion to ICG, a Singaporean Stock Exchange-listed entity of Chinese origins.
Ohorongo was until recently owned by Schwenk Namibia (69.83 percent), Industrial Corporation South Africa (14.27 percent), DBN (11.73 percent) and Development Bank of Southern Africa (4.17 percent).
DBN, in a statement late yesterday, said it was not made aware, until recently, of the transaction involving ICG.
“The Development Bank of Namibia and its shareholder, the government of the Republic of Namibia, was not aware of Schwenk International’s intention to sell . The minority owners and shareholders of Ohorongo were only formally informed about the transaction at its last board meeting held in Windhoek recently,” the state-owned bank said.
“Communication informing DBN of such intention was sent on Sunday 10th March 2019. On Monday 11th March 2019 Schwenk International announced that they negotiated and signed a sales purchase agreement with International Cement Group (ICG) to sell 100 percent of their stake in Schwenk Namibia.”
The sales purchase agreement is for ICG to acquire 100 percent of Schwenk International’s stake in Schwenk Namibia, which ultimately owns a 69.83 percent stake in Ohorongo.
“According to the Singapore Stock Exchange News Service (SENS), the agreed total price is US$104.4 million in cash – approximately N$1.5 billion using a rate of USD to NAD14.5212 as at 12 March 2019,” DBN said.
In terms of the deal, ICG will take ownership of Schwenk Namibia and through its ownership, will own 69.83 percent of Ohorongo Cement.
While the sale of Schwenk Namibia does not reduce the number of shares owned by the three minority sharehoders, DBN said it is “not familiar with ICG or its strategic intentions in Ohorongo Cement at this stage.”
A shareholders meeting scheduled for the coming days is expected to clear many of the uncertainties.
“The overriding objective of DBN in undertaking equity investments 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,” the bank said.
“We will formally announce the way forward concerning our investments in OC after consultations with our shareholder.”