Transnet’s capital expansion programme has received a boost after the state owned freight and logistics company signed a $1.5 billion five-year senior unsecured term loan facility, led by the Deutsche Bank AG.
In a statement on Wednesday, the company said the facility will also be utilised to “refinance existing debt in line with Transnet’s corporate funding plan” for this financial year.
Transnet’s Group Chief Financial Officer, Nonkululeko Dlamini, said the facility will go a long way to supporting the company’s sustainability.
“This is a significant milestone to stabilise Transnet’s liquidity position in support of our financial sustainability. It has been the single largest funding transaction which Transnet has been able to secure in the last seven years with the benefit of diversifying our investor base in the process.
“The confidence that these investors have demonstrated is encouraging and we continue to focus on improving the operational and financial performance of Transnet,” Dlamini said.
The company explained that the first tranche of $685 million is scheduled to be drawdown this month while it will be done in “eight equal semi-annual instalments” following a grace period of a year.
“There is an Accordion feature in the transaction for up to $1.5 billion, subject to Transnet’s consent until December 2022. Given the Accordion feature, Transnet will have approximately $800 million available for drawdown up until 31 December 2022, subject to market conditions and investor appetite.
“The transaction saw participation from a number of investors and DFIs, demonstrating confidence in Transnet and expanding the company’s investor base. The institutions included Deutsche Bank AG as Global Coordinator, book runner and arranger, Africa Finance Corporation as book runner and arranger, African Export-Import Bank as book runner and arranger and Ahli United Bank as Lead Manager,” Transnet said.
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