Transnet signs loan deal with international banks worth over R25bn
Transnet says it will use the loan to fund its expansion projects and refinance existing debt
13 July 2022 - 13:00
byNelson Banya
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State-owned rail firm Transnet has agreed to a five-year loan worth $1.5bn (about R25.4bn) with a group of international lenders led by Deutsche Bank in its biggest funding transaction in seven years.
Poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism have disrupted Transnet’s freight rail services.
It reported a 14% decline in volumes hauled in its last financial year.
In April, Transnet declared force majeure, saying its capacity to provide services to mineral exporters was constrained by a lack of locomotives, large-scale theft of copper cables and vandalism of infrastructure.
Transnet will use the loan to fund its expansion projects and refinance existing debt, it said late on Tuesday.
“This is a significant milestone to stabilise Transnet’s liquidity position in support of our financial sustainability,” said Transnet group CFO Nonkululeko Dlamini.
The first draw-down of $685m (about R1.1bn) is scheduled for later in July, Transnet said.
Africa Finance Corporation, African Export-Import Bank and Bahrain-headquartered Ahli United Bank were involved in the syndicated loan transaction alongside Deutsche Bank.
Last week, Transnet issued a veiled threat to coal exporters that had not agreed to amend transportation contracts after its declaration of force majeure in April.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Transnet signs loan deal with international banks worth over R25bn
Transnet says it will use the loan to fund its expansion projects and refinance existing debt
State-owned rail firm Transnet has agreed to a five-year loan worth $1.5bn (about R25.4bn) with a group of international lenders led by Deutsche Bank in its biggest funding transaction in seven years.
Poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism have disrupted Transnet’s freight rail services.
It reported a 14% decline in volumes hauled in its last financial year.
In April, Transnet declared force majeure, saying its capacity to provide services to mineral exporters was constrained by a lack of locomotives, large-scale theft of copper cables and vandalism of infrastructure.
Transnet will use the loan to fund its expansion projects and refinance existing debt, it said late on Tuesday.
“This is a significant milestone to stabilise Transnet’s liquidity position in support of our financial sustainability,” said Transnet group CFO Nonkululeko Dlamini.
The first draw-down of $685m (about R1.1bn) is scheduled for later in July, Transnet said.
Africa Finance Corporation, African Export-Import Bank and Bahrain-headquartered Ahli United Bank were involved in the syndicated loan transaction alongside Deutsche Bank.
Last week, Transnet issued a veiled threat to coal exporters that had not agreed to amend transportation contracts after its declaration of force majeure in April.
Reuters
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