The Development Bank of Namibia is seeking relief of at least N$26 million in a matter in which it has sued Growmax Agri- Fertilizer (Pty) Ltd, an agri-outfit that is owned by Profile Investments Holdings for breaching their property finance agreement.
The finance obtained from the Bank is believed to have been deployed into the development of Namibia’s first and only such chemical fertilizer manufacturing plant Growmax. The 200 tonne per day fertiliser manufacturing plant is located on the outskirts of Otjiwarongo.
In documents seen by Business Express, Profile Investment Holdings (Pty) Ltd, Turki Shangelao Nghipondoka and Vaino Nghipondoka are also cited as the second, third and fourth defendants respectively.
THE MATTER
In the matter, DBN claims that in 2017, they entered into an agreement to lend and advance a Property Finance Facility to Growmax with which it complied with fully. Part of the conditions of this facility were that Growmax shall repay the loan amount within a period of 84 months; that DBN shall be entitled to charge interest on the loan amount and that interest on the loan amount shall be charged on the FNB Prime Rate (at the time 10.75%) plus 1% per annum.
Failure to repay any amount in terms of the agreement, inter alia, constitutes a breach of the agreement; the agreement reads in part.
“Notwithstanding the DBN’s compliance, Growmax has breached the terms of the loan agreement by failing/ refusing and/ or neglecting to repay the loan amount in terms of the repayment terms as set out in the agreement, with its first overdue instalment becoming due, owing and payable on the 31st of January 2020.
“On or about the 03rd day of June 2022, the DBN sent a letter of demand to the Defendants, notifying the Defendants of the outstanding amount on the loan facility in terms of the agreement and requiring payment on or before the 04th of July 2022, failing which DBN would be forced to enforce its rights in terms of the agreement and/ or cancel same. Despite demand, alternatively, summons constituting demand, the Growmax has failed/ refused and/ or neglected to remedy its breach of agreement, in which breach it still persists,” the documents read.
Documents further read that on or about the 30th of September 2022, a certificate of indebtedness was prepared by DBN, indicating an outstanding balance of N$26 480 319.77 as at 31 August 2022, an amount due, owing and payable.
“In the premises, the Defendants are liable to DBN, jointly and severally in the sum of N$26 480 319.77 together with interest accrued thereon at FNB’s prime rate plus 1% from the 03rd day of June 2022 until the date of final payment,” claims DBN.
PLEAD FOR ENGAGEMENT
Elia Erastus who is the Managing Director of Profile Investments, the holding company for Growmax in a recent condonation and extension affidavit also seen by Business Express pleaded Growmax’s case explaining that failure to make payment on their loan agreements as particularised by DBN, was not wilful but due to the economic situation and the effect of Covid-19 on their business.
He notes that the Defendants are however at a turning point of getting the business profitable and would like an opportunity to engage DBN with regard to their position.
“I as the Defendants representative have been in communication with DBN since 16 November 2022 and it was agreed that the Defendants should formally request for a business rescue, which was done. I submit that the business rescue application by the Defendants is still under consideration by DBN as the Bank indicated so in its letter of 23 February 2023,” he said adding that Defendants have good prospect of success in that they have made payment towards the amount claimed, substantially reducing their indebtedness and they are willing to make payment if their proposal is accepted by the Bank.
“I submit that it will be just and equitable if the Defendants are allowed to make payments towards their indebtedness and to retain their properties. Growmax (represented by the 3rd Defendant) as a means of making their business a profitable one has entered into a partnership agreement with A&G Agro Mechanical Industries Ghana. I submit that this venture will ensure that the Growmax is able to pay its debts when they are due and payable,” writes Erastus in his affidavit.