!Uri !Khubis abattoir moves a step closer to bankruptcy

Articles: !Uri !Khubis abattoir moves a step closer to bankruptcy

Posted by admin on Tuesday, July 13, 2004 - 01:52 AM

THE woes of the troubled !Uri !Khubis abattoir at Witvlei deepened yesterday, when the High Court in Windhoek granted an order for the winding up of the financially struggling slaughterhouse.
With its debts totalling about N$80 million and assets valued at between N$33,8 million and N$21,2 million, !Uri !Khubis is insolvent, unable to pay its debts, and without a reasonable prospect of recovery, the Senior Manager:Loans of the Agricultural Bank of Namibia, George Riarua Katjiuongua, told the High Court in an affidavit. AgriBank yesterday asked the court to order !Uri !Khubis to be wound up. With no opposition to such an order registered with the court, Acting Judge Petrus Damaseb granted the request. The !Uri !Khubis abattoir has not operated since November last year, when export regulations cruelly intervened to prevent the then newly-opened abattoir from exporting its first consignment of Namibian beef to the lucrative European Union market. !Uri !Khubis explained earlier this year in a memorandum to one of its financiers, the Government Institutions Pension Fund (GIPF), that on the very day that a container of beef from the abattoir was to be packed with 60 tons of prime cut beef for export to the EU, all Namibian meat exports to the EU were halted for a month. That was caused by the discovery that Namibia's meat exports at that stage did not comply with the EU's stringent standards. The !Uri !Khubis abattoir has not been able to recover from that setback, which came just as a long wait for the abattoir to be given EU approval finally paid off. !Uri !Khubis was listed as an EU-approved abattoir in November last year. That was some four months after the date that it had originally been expected that the abattoir would be EU-approved. That delay in itself cost the company about N$5 million of its working capital while it could not get its operations under way and start earning to repay the large loans that it had had needed to start. This, according to the memorandum to the GIPF, which now forms part of the record of the winding-up application in the High Court. The company, which was envisaged as a black economic empowerment initiative that was to enter the potentially lucrative market for the export of Namibian beef to the EU, has also struggled with disunity amongst its shareholders and board of directors, the GIPF was informed further in the memorandum dated March 31. The !Uri !Khubis Abattoir (Pty) Ltd set itself up - or rather tried to do that - with interest-bearing loans. This resulted in the large debt burden that yesterday prompted AgriBank, as the abattoir's largest lender, to ask for the company to be wound up. According to Katjiuongua, AgriBank granted loans totalling N$47 million to !Uri !Khubis - N$23 million in February 2001, N$9 million in July 2002 and a further N$15 million in June 2003. With interest, the abattoir's debts to AgriBank now amount to some N$61 million, Katjiuongua stated in his affidavit. He added that by !Uri !Khubis's own account, the company owed a further N$19,4 million to other creditors a month ago already. This included N$9,85 million that it owed to the GIPF, N$7,8 million that it owed to Namibia Harvest and N$367 665 in salaries and benefits that was owed to abattoir staff, who have not been paid over the past two months. According to valuator Christian Erb, !Uri !Khubis's slaughtering plant and property at Witvlei - on an 11 hectare plot of land that, according to Katjiuongua, was bought for some N$1 790 in July 2000 - has a market value of N$32 million, or N$20 million on the basis of a forced sale, Katjiuongua also stated. Erb has valued the abattoir's movable property at N$1,8 million - or, in the case of a forced sale, at N$1,2 million. That would put the abattoir in the red to the tune of N$46,6 million to N$59,2 million, and counting, since !Uri !Khubis's debts are continuing to grow with interest of about N$1 million being added each month, and expenses also continuing to pile up at a rate of N$0,7 million a month.

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