NPTH bails out Telecom

10 April 2015 Author  

front Theo 10 aprilTelecom Namibia acting Managing Director Theo Klein has confirmed that parent company Namibia Post and Telecom Holdings (NPTH) will inject a N$400 million bailout into the company.

 

Sources this week revealed that Telecom requested the bailout from the NPTH board last year in order to service loan repayments that mature this year.

However the two boards had struggled to agree on all the conditions set out by the NPTH board for Telecom to receive the funds.

In an interview on Thursday, Klein responded to claims that Telecom might not be able to pay one of its bonds with a face value of N$93 million, which matures next week on 17 April 2015.

“No that is not correct, we will redeem the bond as funds have been secured under point one of the turnaround plan,” he said

He said the NPTH board agreed to pay the N$400 million in three instalments with the first payment expected on 15 April 2015.

Sources closely linked to NPTH said the board did not have much faith in Telecom following bad investments in both Angola and South Africa over the years.

“They just don’t have the money to pay the bond because they used it and could not get it back. If they default they would be the first parastatal not only in Namibia but in SADC to do so,” the source said.

Klein did not dispute the company’s history of bad investments and the repercussions they had.

He merely confirmed that the company would not be able to recover the bulk of the money it invested in Angola and South Africa.

“We will be getting back some money from Neotel but definitely not everything we invested,” he said.

The acting MD said there were other factors, apart from previous bad investments, that had affected the company’s financial position such as the trading results, which had been affected by the new billing system.

Klein further refuted allegations that the company had not properly tested and verified the new billing system before it implemented it, and said that the company performed a host of tests on the new billing system.

“Testing was done with a 93 percent success rate on the billing system. The challenge that was presented was that the new billing system could not work in parallel with the old billing system,” he said.

It has further emerged that as part of the implementation of the parastatal’s turnaround strategy, Telecom is likely to announce a second phase of retrenchments or voluntary separation.

But Klein said retrenchments are off the table for now.

“I first need to strategically look at the process for now and put certain tools in place, like rolling out more fibre optic cables and less copper.

“Those kinds of processes will inform us as to which segments of the company could be targeted for voluntary separation, but even that won’t happen anytime soon, or at least not for the remainder of 2015,” Klein said.
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