After Transnet, a state-owned freight and logistics operator, inked a $1.5 billion, five-year senior unsecured term loan facility, sponsored by the Deutsche Bank AG, the program for capital development got a boost.
The company stated the facility will also be used to “refinance existing debt in line with Transnet’s corporate funding plan” for this fiscal year, according to a statement released on Wednesday.
Nonkululeko Dlamini, group chief financial officer at Transnet, stated that the facility will significantly contribute to the firm’s sustainability.
“Stabilizing Transnet’s liquidity position is a critical milestone in ensuring our financial sustainability.
It was the single largest funding deal Transnet was able to do in the previous seven years, and as a result, our investor base was diversified.
The trust these investors have shown is encouraging, and we’re still working to boost Transnet’s operational and financial performance, according to Dlamini.
The first $685 million tranche, according to the business, will be drawn down this month and will then be distributed in “eight equal semi-annual instalments” after a one-year grace period.
“Subject to Transnet’s approval through December 2022, the transaction includes an accordion mechanism with a maximum value of $1.5 billion.
Transnet will have roughly $800 million available for drawdown through December 31, 2022, depending on market conditions and investor interest.
“A number of investors and DFIs participated in the transaction, expressing their belief in Transnet and broadening the company’s investor base.
The institutions comprised Ahli United Bank as Lead Manager, Africa Finance Corporation as Book Runner and Arranger, African Export-Import Bank as Book Runner and Arranger, and Deutsche Bank AG as Global Coordinator, Book Runner and Arranger, according to Transnet.