Africa-Press – Zambia. INDENI Energy Limited Board Chairperson Watson Lumba has called on government to assist the state-owned company with working capital, stating that doing so would help the country address the current fuel problems.
Lumba says government should also help Indeni clear its huge legacy debt, which has distorted the company’s balance sheet, making it unable to borrow money from banks.
In an interview, Tuesday, Lumba lamented that if Indeni continued in its current financial state, it would face serious problems, including failing to pay workers’ salaries.
“There is a need to give Indeni capacity through working capital. I’m requesting that the government assists Indeni with working capital. This will help with fuel problems. Indeni has the potential to do well, but it is just there. The small margins we get from the international partner we’re selling that fuel [for], immediately we sell in Kwacha, we get the dollars and send them to them. If we have changed from the small margins they give us… But now with the dollar changing, now going up, it means that what Indeni is getting is being eroded. So, basically, if Indeni continues like that, we’re going to have serious problems even to pay salaries for the workers because the amount of money we get, with the exchange rate, is being eroded,” he said.
“So, all those tanks you see at Indeni are empty. They have no fuel there, and they are not even being used. So, if Indeni was given even a bit of money to start using those tanks, we can be working with other partners, they use those tanks as hospitality. Because as we are now, there is nothing we can do. Indeni doesn’t have money, and we owe a lot of money from the legacy debt which Indeni as a refinery had. We’ve been to court, we’ve been threatened by bailiffs. At one point, they almost bounced in, but because we’re a state-owned company, they got in but they quickly realised that this is a state-owned company and so they brought back the things”.
Lumba further indicated that fuel tanks at Indeni were currently empty, and filling them would enable the country to have strategic reserves.
“Indeni is currently not being useful. So, Indeni has got tanks, and if those tanks are filled and they’re keeping reserves, we can have strategic reserves. But currently, we can’t have strategic reserves at Indeni because we do not have money. And the government has not given us any single ngwee. So, there’s nothing Indeni can do. Indeni currently has a huge legacy debt which distorts the balance sheet so that we cannot borrow money. Our balance sheet is not worth [it], everyone that looks at our balance sheet will not give us money because of the legacy debt, we cannot borrow money from the bank. If the government can help us wipe out or clear out that legacy debt, we will be in a position to borrow money from the bank. Banks are willing to work with us, but because of the legacy debt, it turns out that banks are not interested because of our balance sheet,” said Lumba.
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