9. May 2008

Ramatex 'Bankrupt'

The Ramatex textile company and its main subsidiary in Namibia were declared bankrupt by the High Court yesterday.
Through two court orders that were given two minutes apart, Judge Elton Hoff administered the legal last rites to an attempt to establish a textile industry in Namibia over the past six and a half years.
In the first of two related cases over which he presided in the High Court in Windhoek, Judge Hoff gave an order, applied for by Ramatex Textiles Namibia (Pty) Ltd, to have its subsidiary company, Flamingo Garments, placed under provisional liquidation.
Two minutes after that order had been granted, Ramatex Textiles Namibia (Pty) Ltd itself was also placed under provisional liquidation at the request of its Malaysian parent company, Ramatex Berhad. The two provisionally liquidated companies are more than half a billion Namibia dollars in the red, the court was told.
Flamingo Garments' liabilities outstrip its realisable assets - this however does not include money owed to the company - by over US$37,6 million (almost N$287 million), the court was informed in an affidavit by a Ramatex Textiles Namibia representative, Boon Keong Ong.
Ramatex Textiles Namibia is in similarly dire financial straits, according to another affidavit that Boon made on behalf of Ramatex Berhad, a Malaysian-registered company that is the sole shareholder of Ramatex Textiles Namibia.
In that sworn statement, Boon informed the court that Ramatex Textiles Namibia's debts exceeded its realisable assets - similarly not including money owed to the company - by more than US$35,53 million (N$271 million).
When debts owed to the two companies are taken into account, Flamingo Garments' liabilities exceeded its assets by US$30,45 million (N$232,3 million), while Ramatex Textiles Namibia is US$13,1 million (N$99,9 million) in the red, according to financial records of the two companies filed with the court.
Ramatex closed its clothing factory in Windhoek, where it had been operating from premises leased from the City of Windhoek since October 2001, in early March this year. With its sudden closure, about 3 000 Namibians and around 250 foreign workers lost their jobs overnight.
Worries over the impact the Ramatex factory would have on the environment, and especially on groundwater in its area, dogged the factory from its opening some six years ago.
It now emerges from the documents filed with the the court that the City of Windhoek cancelled its lease agreement with Ramatex Textiles Namibia on April 21.
Concerns about damage that the factory was doing to the environment was one of the reasons given for the cancellation. In terms of the agreement it had with the City, the company leased about 45 hectares of land from the City for a 99-year period for a total rent payment of N$1 188.
In a letter the City sent to Ramatex Textiles Namibia on April 21, the company was informed that the lease was being cancelled because the company had failed to follow and carry out sound environmental practices, it had failed to keep waste water treatment facilities at the factory in good order and to remove harmful residues from water before discharging the water, and because the company had closed down its operations and lost its export processing zone status.
"The waste water treatment facility is in a dilapidated state and unfit for further use in its current state", the City informed Ramatex.
Boon told the court that both companies had stopped their operations and had retrenched their employees in Namibia. They had gone through a succession of years of financial losses, he claimed.
According to financial statements filed with the court, Flamingo Garments lost US$9,88 million (N$75,3 million) in 2005, US$5,44 million (N$41,5 million) in 2006, and US$9,6 million (N$73,2 million) in 2007. Its total retained loss at the end of 2007 amounted to US$31,38 million (N$239,4 million).
Ramatex Textiles Namibia had accumulated losses of US$8,03 (N$61,2 million) by the end of 2006, its financial statements indicate. (The Namibian, Windhoek)


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