Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698147228427.pdf (Namibia)
REPUBLIC OF NAMIBIA MINISTRY OF PUBLIC ENTERPRISES Office of the Minister RESPONSE TO QUESTIONS POSED BY HONORABLE NICO SMIT IN RESPECT OF FUNDING REQUIRED BY THE NAMIBIA AIRPORTS COMPANY FOR VARIOUS CAPITAL EXPENDITURE INITIATIVES Background The Namibia Airports Company ("NAC")recently hosted various stakeholders in the aviation and financial services industries to, among others: • Update them on the progress made on various initiatives embarked on over the past few years; • Share the challenges and experiences encountered during the past year as a result of the COVID-19 pandemic; and • Communicate NAC's plans for infrastructure over the next five years.
development envisaged During these engagements NACinformed the stakeholders that N$1.3 billion worth of capital expenditure is envisaged over the next five years in order for NAC to adequately meet its commercial and compliance mandate across all Included in these planned expenditure are projects worth N$143 airports.

million for which NAC is seeking debt funding backed by a Government guarantee.
Question 1 Can the Hon Minister tell Parliament what happened to the N$255 million for the (N$155 million from taxpayers) if there should still be N$100 upgrading of Hosea Kutako Airport and why, million left, more money is required?

Was some of it diverted for paying salaries and Xmas bonuses at NAC?
that was given to NAC in 2019/20 All officiol Correspondence must be addressed to the Permanent Secretary Answer 3 to note that over the past few years (from when the debt It is important accrued), NACmanagement and the Board (even at the time the current CEO was not attached to NAC)adopted various measures aimed at recovering the then existing debt and limiting further exposure to Air Namibia debt.
These include: • Entering into an agreement to recover aeronautical charges through the International Air Transport Association (lATA)towards the end of 2018.

Despite efforts by Air Namibia during 2019 to request the shareholder to intervene and compel NAC to withdraw from this agreement, NAC continued to seek enforcement of this agreement.

Air Namibia however ended up defaulting on the lATAplatforms.
• Various engagements were held with Air Namibia at management and Board level where NAC sought to compel Air Namibia to settle outstanding balances.

There were instances were Air Namibia would commit to payment plans which were unfortunately not fully honoured.

• Pursuant to Air Namibia's failure to pay what it owes NACthrough the aforementioned means, it was resolved that Air Namibia be placed on an advance payment basis in respect of services rendered to it by NAC.
This was implemented in 2020 and was in effect until Air Namibia's liquidation.

NAC managed to receive pre-payments on a weekly basis from Air Namibia since the implementation of this debt mitigation measure.

• Furthermore, NAC,through its CEO and Board of Directors, on several occasions requested intervention from the shareholder in respect of Air to NAC.
Various letters were written to the Namibia's indebtedness the Ministry that I head, and in some Ministry of Works and Transport, instances, to written addition to the various Ministries referred to above over the correspondences past few years, there were engagements in various fora with myself and the Honourable Minster of Works and Transport, during which the NAC Board and the CEO raised the issue of Air Namibia's increasing debt and requested urgent intervention.
This was however to no avail, as there remained no solution to the matter.

the Ministry of Finance.

In The characterisation that NAC's failure to collect outstanding debt was a dereliction of duty or ineptitude is therefore factually incorrect as it does not the efforts referred to above, coupled with the nuanced take into account and the Board faced in remedially challenges addressing this issue.
that NAC's management All official Correspondence must be addressed to the Permanent Secretary from the Government Over the past year NAC has utilized its existing reserves as well as some and capital assistance expenditure obligations.

The company is also using its own balance sheet to to cater for future capital needs.
seek funding from financial Although the effects of COVID continue to be felt, NAC is optimistic that its financial situation, which is not dissimilar to that of other airport operators worldwide, will gradually improve once travelling gradually normalises.

to fund its operational institutions To pointedly answer the question, as at 31 December 2020, NAC's total assets were valued at N$2.7 billion, and its current assets were N$253 million, whilst its obligations to third parties were only N$91 million.
Despite the bleak global economy and low air traffic, NACalso remains able to pay its debts as they become due.

It is noteworthy to take cognizance of the fact that NAC's financial position is undoubtedly solvent, so much so that it has never had to borrow from any financial institution and/ or capital markets in its entire period of existence from inception to date.
The fact that airlines such as Ethiopian Airways and Eurowings have resumed passenger service and the Turkish Airline commenced cargo operations, while others have increased the frequency and expanded their operations at airports operated by NAC,Westair and Airlink being a case in point; with the likes of Condor, TAAGand Comair having conveyed their intention to likewise resume operations in April/May 2021 means that NAC's financial position is exponentially aircraft movements.
commensurate improving, increased with the Non-aeronautical revenue generated from retail activities at NAC airports is also expected to correspondingly increase in light of increased passenger numbers, which will enable NACto collect more revenue to buffer its reserves, thereby continuing to be a going concern, as has always been the case.
NAC is firmly solvent and is not anywhere near being insolvent as it has a healthy assets-liabilities ratio and continues to be able to pay its debts when they fall due, as corroborated by the concrete facts provided above .

.... END .... All official Correspondence must be addressed to the Permanent Secretary