Johannesburg, South Africa — March 25, 2013 – Transnet SOC Limited “’ South Africa’s state-owned ports and rail operator “’ is planning to raise R20 billion (US$2.16 billion) for the fiscal year through to March 2014 to fund its expansion plans.
This is of major importance to the mining industry “’ a top customer which has literally all its bulk minerals like coal, iron ore and manganese transported to the coast by Transnet for export, reports Bloomberg News.
The figure compares to about R18 billion raised in the current financial year, Transnet CFO Anoj Singh said in an interview here. About 60% of the target of R20 billion may be reached by selling five-to-ten year bonds, he added. “Beyond that, it gets expensive.”
Transnet plans to tap the South African market for about 60% of the bond issue and offshore investors for the rest, according to Singh. The money will go toward capital expenditure for the year of R35 billion rand, while debt funding requirements will be 11% higher than a year ago, he said.
Transnet started a seven year R300 billion development plan across South Africa and its neighbouring commodity-producing countries last year.
The company’s financial performance for the year ending March 2013 will be “reasonable,” Singh said. Transnet is “commodities linked” and weaker “global economic growth has impacted us,” he added.
In the 2012 fiscal year, earnings before interest, taxes, depreciation and amortisation rose 20% to R18.9 billion.
Source: Bloomberg News. For more information, click here.