TransNamib weighs options after property auction flops

TransNamib is now weighing its options after plans to dispose some of its properties flopped.

This was after bidders placed below market value at the company's initial auction.

The national rail operator, which has a property portfolio worth N$2.4 billion, was in the market seeking buyers for its non-core properties around the country as it seeks to raise at least N$2.5 billion needed for the implementation of its turnaround plan.

“While we received considerable interest in the Commercial Properties Auction, there were only a few substantial offers which we were able to accept.  The majority of the offers received for the commercial properties were 50% below the market value,” TransNamib’s Manager for Corporate Communications, Abigail Raubenheimer, told The Brief.

“The alienation of the properties serves as a function to support the funding of our business plan, thus if we are not able to receive substantial market related offers for the properties, it would better serve TransNamib to keep the properties on the company’s balance sheet.  We have many different options to leverage the properties of TransNamib and will utilise the company’s properties in the best interest of the company and can therefore not compromise the total property base of the company.”

Raubenheimer noted that a number of factors might have impacted the commercial property auction. 

"We understand that given the current retracted market conditions, offers tend to be lower.  Buyers may be influenced by the perceived negative perception of TransNamib and that the company is desperate to generate funding but TransNamib will not alienate properties below market value.”

The TransNamib Spokesperson said the company was now busy with the second stage of its non-core property disposal, with property disposals to its staff.

“At the moment we are busy with the internal auctions for staff members.  Employees at the lower grades received a preferential option to acquire these properties through auction.  As we have stated the alienation will be done in phases, after which once the process is concluded we will make the information available to the public,” said Raubenheimer, without revealing the number of properties on offer to staff.

The disposals, which have Cabinet approval, will see the rail operator hold a series of auctions for both vacant and improved properties in Windhoek, Seeis, Okahandja, Otavi, Karibib, Omaruru, Otjiwarongo, Maltahohe and Keetmanshoop, as it seeks to leverage the assets to raise the much-needed revenue.

The national railway operator is currently incurring a N$10 million monthly loss due to delays in securing funding for its Integrated Strategic Business Plan (ISBP) which was coined in 2018, with the aim of turning around the financial fortunes of the rail operator into a profitable entity.

 TransNamib’s strategic plan had hoped to make a financial breakthrough in 2023, attaining a trustworthy customer experience by transporting three million metric tonnes of cargo by 2023.

The company is banking on a Development Bank of Namibia’s and Development Bank of South’s credit facility to fund its turnaround strategy to the tune of N$2.6 billion. 

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Last modified on Wednesday, 11 January 2023 19:58

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