Namibia’s state oil company signed a supply deal with Gunvor Group Ltd. after reporting an “unprecedented” loss because of market volatility and governance issues.
The Namibian National Petroleum Corp., or Namcor, posted a loss of 700 million Namibian dollars ($37 million) and said it faces “significant cash flow challenges” due to the lack of working capital. The loss prompted the company to seek a turnaround plan, according to a statement on Thursday.
Namcor reached an agreement with a key supplier as part of the plan, Shiwana Ndeunyema, the acting managing director, told reporters in the capital Windhoek. While he didn’t name the company, a Namcor spokesperson identified the supplier as Gunvor.
“We negotiated from a point of weakness but it was an interim solution for a potentially permanent problem,” Ndeunyema said. “The idea was to buy time to ensure continued supply of product to supply our customers.”
The trading company didn’t immediately reply to a request for comment.
The main reason for the loss include “market volatility, and significant breach of internal controls and governance systems,” Namcor said in the statement. It’s recovery plan includes a capital injection.
--With assistance from Archie Hunter.
