Transnet secures R6bn in funding
US-Exim for the funding of the diesel locomotives the company is buying from General Electric (GE), reported Business Day.
The group CE of the state-owned ports, rail and pipeline company, Brian Molefe, said on Wednesday that the guarantee was “a massive thumbs-up from the international investor community, affirming Transnet’s credit-worthiness and South Africa’s attractiveness as an investment destination.
“The guarantee from US-Exim enables Transnet to raise funds in the markets for the financing of the GE locomotive transaction. It allows for Transnet to negotiate favourable repayment terms, including the tenor and interest rates.
“The required funding will be raised through bank loans supported by the US-Exim guarantee. The terms of funding to be backed by the guarantee will be dependent on a number of factors, including market conditions, pricing and investor appetite,” Molefe said.
The facility will be drawn over a three-year period in line with the delivery schedule for the locomotives. The repayment period is 14 years. Molefe said this term would extend Transnet’s debt maturity profile while improving the match between assets and liabilities.