http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.04Change: -0.16
R/$ = 12.07Change: -0.10
Au 1204.60 $/ozChange: 1.40
Pt 1170.50 $/ozChange: 4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 24, 2009

Transnet finalising plans for a R5bn global bond issue

Back
Transnet acting CEO Chris Wells outlines the group's funding options. He was speaking at Transnet's 2009 results presentation on Wednesday. Editing: Darlene Creamer. (24/6/2009)
 
 
 
Aggregates|Projects|Transnet|Equipment|Operations
Aggregates|Projects|Transnet|Equipment|Operations
aggregates|projects|transnet|equipment|operations
© Reuse this



South African transport utility Transnet was currently preparing the necessary documentation and fulfilling the legal requirements for a R5-billion global bond issue, acting CEO Chris Wells said on Wednesday.

However, he provided no details as to the timing of such an issuance, saying only that the group intended to enter the European and North American markets as soon as the net costs of raising foreign-market bonds became attractive again.

“We are watching it daily, and there will come a time, in the short- to medium-term, when the pricing will be right and we will issue a R5-billion or so bond into that market,” Wells said.

The State-owned enterprise (SoE) had already established a domestic medium-term note programme, which it was currently tapping at a rate of R1-billion a month and which would remain the “backbone” of its funding strategy.

“But as other South African SoEs increasingly move to tap the domestic bond market, one has to have alternative sources,” Wells said in a presentation in Sandton.

The international markets would be accessed through a so-called global medium-term note programme, but only once the “spreads” between emerging-market and developed-market debt had narrowed.

In the wake of the global financial crisis and associated credit crunch, emerging markets and their companies had been “penalised”, with investors demanding higher spreads, which had effectively shut off that source of funding to the developing world.

“The amount of funding we need . . . is intense over three years and aggregates to R27-billion,” Wells said, arguing that, while its current projections showed net surplus cash positions for the 2012/13 and 2013/14 periods, it was likely that these would not materialise as new projects were added as growth resumed.

The group is looking to tap several funding sources over-and-above the issuing of bonds, including:

  • Development finance institution capital, with an African Development Bank due diligence exercise already under way;
  • Loans from domestic and foreign institutions, including a deal with the Japanese Insurance Corporation, which was in place but awaiting improved rand-to-yen swap rates;
  • The issuance of commercial paper for short-term funding purposes; and
  • Export credit-agency finance, placed with agencies in the countries from where Transnet was importing capital equipment.

Transnet had recently recommitted itself to an R80,5-billion five-year capital programme, and had budgeted for a R12,9-billion funding shortfall in 2009/10, as it prepared to spend nearly R22-billion on capital projects in that financial year.

Capital expenditure over the next three years was being budgeted at R57,7-billion, which Wells indicated would be funded through borrowings of R28,4-billion and cash from operations of R29,3-billion.

The group spent R19-billion on capital programmes in the year ending March 31, 2009, a 22% increase on the R15,6-billion it spent in the previous year.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Transport & Logistics News
Buying the catering unit of cash-strapped state airline South African Airways (SAA) could work for Bidvest Group, its chief executive said on Friday. SAA is considering selling some of its units including its inflight and airport lounge catering business, Air Chefs,...
KPMG International’s latest Global Automotive Executive Survey, which canvassed 200 automotive executives, shows that short-term market issues are taking precedence over strategic innovations. The document, the sixtheenth survey, notes that respondents view market...
Cameroon state airline Camair-Co will use $50-million from African lender Ecobank to relaunch its operations, a senior executive said, as national carriers in West Africa seek cash and strategic partners to stay afloat. Camair-Co general manager Jean Paul Nana Sandjo...
More
 
 
Latest News
Two influential US senators, central to the so-called ‘chicken war’, have announced their intention to pursue amendments to the African Growth and Opportunity Act (Agoa) to secure greater access for US poultry into the SA market. “We believe passionately in Agoa’s...
The Independent Communications Authority of South Africa (Icasa) on Friday published the findings of a discussion document on South Africa’s television and radio local content environment. Icasa last year requested industry input as it reviewed and revamped...
Buying the catering unit of cash-strapped state airline South African Airways (SAA) could work for Bidvest Group, its chief executive said on Friday. SAA is considering selling some of its units including its inflight and airport lounge catering business, Air Chefs,...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
SMART DISTRIBUTION Providing funds to introduce smart grid technologies in the absence of a clearly defined strategy will not result in the desired outcome
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96