Namibia Stock Exchange-listed private equity firm, Stimulus Investments, is in discussion with potential buyers to offload its Joe’s Beerhouse property portfolio, Chief Executive Officer, Josephat Mwatotele, has said.
Speaking exclusively to the Windhoek Observer last Friday after presenting Stimulus’ financial results for the year ended 28 February 2017, Mwatotele said they were in advanced talks with potential buyers or investors keen on the Joe’s Beerhouse property, which is valued between N$20 million and N$30 million.
Stimulus seems to have been forced its hand to sell its only property portfolio to comply with Namibia Financial Institutions Supervisory Authority (NAMFISA) rules, which prohibit private equity companies from investing in property.
“The rationale of selling the Joe’s Beerhouse property is that it is a non-core asset, and according to NAMFISA, property is defined as one of the assets that private equity companies cannot invest in,” Mwatotele said.
News of the property sale comes exactly five years after Stimulus announced that it has disinvested from the internationally renowned restaurant, for strategic reasons.
At the time, the business was sold to the Rechter family as a going concern, but Stimulus retained 100 percent ownership of the property located in Eros, Windhoek.
Prior to the business sale in June 2012, Stimulus had an 82,5 percent stake in the joint venture project while Habo Gerdes held a 5,9 percent shareholding with founding member Anette Gross owning the remaining shares.
Meanwhile, Stimulus, which has business interests in Angola through Cymot and Plastic Packaging, says it is still struggling to repatriate profits back into the country from the oil-rich country.
Although Mwatotele could not say how much money in total was still locked up in Angola - which has faced a severe economic downturn over the last two years - he said the funds were being remitted in small tranches.
“Angola has always been an attractive market for Namibian companies due to the close proximity and historical relationship, and recovering funds from there is an ongoing operation.
“The amount in Angola keeps fluctuating for different companies because there are continuous remittances being received from time to time. The two companies we are talking about are Cymot and Plastic Packaging and I know they have been reducing the balance.
“All I can say for now is that the figures of both [companies] have been reducing, but I am not in a position to give the numbers now,” Mwatotele said.
He ruled out investments in the region, although he said Zambia might be an exciting prospect.
“We have not cast our eyes further than Angola presently, but in due course we might look at countries like Zambia which naturally expands via our trade links through the Zambezi region,” Mwatotele said.
During the financial year under review, Stimulus, which is currently sitting on N$121,9 million in additional capital, acquired N$87,5 million worth of shares in Khomas Solar Saver, and made an additional investment in one of its recent acquisitions’ Namibia Media Holdings.
Stimulus recorded an 11,6 percent improvement in portfolio growth and now has total assets under management of N$503 million, up from N$382 million last year.
The company recorded a 161 percent growth in its preference dividend of N$32 million, compared to the N$12 million of 2016, which translated into a dividend of N$6,93 per preference share, compared to N$3,29 last year.
Looking forward, Mwatotele said the prevailing economic challenges in Namibia will have minimal impact on the business because of its diversified portfolio.
“We are mindful and know that it is going to be a tough economic environment over the next 12 months or so, but I think having a strong diversified portfolio will help us whether the storm.
“We know there are headwinds and the results we just presented now are a reflection of what we are likely to be in the next 12 months.
“But I think it helps to have a strong management team, a well-diversified portfolio and focus on the operational efficiencies within the company, as opposed to trying to look for more growth areas.
“We need to find ways that we can increase our market share rationalise our costs and streamline our operations,” Mwatotele said.