Algerian NCA Rouiba in a difficult period
In an open letter, the management of the Nouvelles canneries algériennes de Rouiba (NCA-Rouiba), the Algerian leader in fruit-based drinks, reported the company’s serious financial difficulties.
In this letter of 5 November addressed to its shareholders, consumers, suppliers and partners, Slim Othmani, the company’s Chairman of the Board of Directors, explains that « the good governance that has always characterised our company, our presence on the Algiers Stock Exchange, as well as our duty of transparency towards all stakeholders, requires us to inform you of this delicate situation and the safeguard measures currently being implemented ». In fact, the group has confirmed that it can no longer meet market demand due to a lack of products, while at the same time facing financial deadlines that it is struggling to meet. A situation sufficiently alarming for the manager to mention a « cash shock » that he justifies by « the economic crisis that is hitting the country », « the weak dynamics of the Algiers Stock Exchange », « the explosion of the practices of the without invoice », but also, more problematic, « deficiencies in the management of receivables, debts and internal control ».
Among the measures already taken, the family-owned industrial group thanked its Managing Director, Sahbi Othmani - cousin of Slim Othmani - and launched audits to identify shortcomings in the management of the previous period. In addition to reducing its expenses, possibly selling assets and renegotiating its debt with its suppliers and financial partners, NCA-Rouiba has also announced its intention to use legal proceedings more systematically to collect its receivables, and to cover the risk of non-payment for 100% of its customers through the Algerian Export Insurance and Guarantee Company (CAGEX). However, Slim Othmani pointed out that, in addition to the results expected following the current action plan, « it is nevertheless necessary for the company to strengthen its equity capital[…] ». To this end, two scenarios are currently being studied by the Board of Directors - increasing the company’s capital (around 7 million dollars today) or calling on a new « strategic and/or financial partner » (Cevital, the leading Algerian private group, has held 15% of Rouiba since 2014) - and will be discussed « soon in a general meeting », said NCA-Rouiba’s management.