Transnet sweet-talks itself out of credit default
SA’s state-owned ports and rail operator says it is putting together a plan to stamp out irregular spending that has damaged its reputation
Rail monopoly Transnet, whose CEO is under fire for his role in a questionable locomotives deal, has had to sweet-talk lenders holding R15.8bn of its debt after a qualified audit on its 2018 results triggered a credit default. In its agreement with the lenders, a qualified audit gives lenders the right to call in those loans, immediately. Despite SA’s sovereign downgrade to junk status by ratings agencies S&P Global and Fitch, Transnet, which also controls SA’s ports and fuel pipelines, has managed to keep a stand-alone investment-grade credit rating. But it needs to maintain a good relationship with its lenders if it is to complete a planned R164bn investment programme over the next five years. Transnet’s former CEO Brian Molefe and former CFO Anoj Singh have been deeply implicated in corrupt deals with the Gupta family, and the state-owned entity said it had uncovered R8.1bn in irregular expenditure going back to 2005 — R800m of that incurred in the past financial year to end-Marc...