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 declined to 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.
(Updates with Gunvor declining to comment in fifth paragraph)
