Transnet is paying about R400m to R500m more in interest annually than it was in 2016-17 because of sovereign credit ratings downgrades, the state-owned rail, freight and logistics company said on Wednesday. The higher interest bill was negotiated with lenders as an alternative to their demand that Transnet debt be guaranteed by the state, which Transnet chief financial officer Garry Pita said the company wanted to avoid at all costs. Being 100% state-owned, Transnet was downgraded by ratings agencies along with the sovereign downgrade, though on a stand-alone basis it has an investment grade rating of BBB by Standard & Poor’s. Transnet CEO Siyabonga Gama and Pita briefed Parliament’s public enterprises committee on the parastatal’s 2016-17 financial results. Transnet, which currently has about R125bn in debt, is able to borrow on the strength of its own balance sheet and has not had to resort to government guarantees since 1998-99. Pita explained that because Transnet did not have ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.