Acsa reports successful issuance of preference shares

8th March 2021 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

State-owned Airports Company South Africa (Acsa) reported on Monday that it had finished issuing ‘A’ preference shares, to increase its liquidity. The majority purchaser of the new shares was the South African Department of Transport, which acquired them for R2.324-billion.

The issuance was one of the measures adopted by Acsa to meet the challenges created by the Covid-19 pandemic. It advanced the company’s aim of achieving long-term financial stability.  

“At a time when we were faced with financial uncertainty and a weakening liquidity position, it is encouraging to learn that shareholders are prepared to support our funding strategy,” highlighted Acsa CFO Siphamandla Mthethwa. The company stated that ratings agency Moody’s Investors Service regarded the issuance of the preference shares as credit positive, as it demonstrated the government’s strong support for the company, as well as strengthening its liquidity.

“It is very important to note that taking up these preference shares is a creative investment instrument of financial support under exceptional Covid-19 circumstances,” he pointed out. “The preference shares have been taken up by the majority shareholder through the Department of Transport in terms of an allocation made in the Second Adjustments Appropriation Act of 2020.”

“Acsa’s long track record of being a profitable and well-run State-owned company gives government confidence of earning an additional return as the global and local aviation sectors recover over the next three to five years,” he stressed. “The structure of preference shares gives Acsa sufficient space to recover while also guaranteeing shareholders a return of their investment.” 

Acsa owns and operates nine South African airports, including Johannesburg’s OR Tambo International, Cape Town International, and Durban’s King Shaka International. It was currently also still a member of the consortia that ran Guarulhos (São Paulo) International Airport in Brazil, although it was considering an offer for its shareholding in that airport. It recently sold its stake in the Chhatrapati Shivaji (Mumbai) International Airport in India.