We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

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. 



Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.