Transnet today signed a R12-billion club loan with five major local and international financial institutions to help fund its infrastructure investments under the Market Demand Strategy (MDS).
Transnet acting chief executive, Siyabonga Gama, pointed out that the proceeds of the loan would be used to fund its planned acquisition of 1064 locomotives under the MDS.
Three institutions – Absa Bank, Nedbank and the Bank of China– each provided financing of R3bn, while Old Mutual Specialised Finance and Futuregrowth Asset Managers provided R1.5bn each. Gama pointed out that the club loan was in addition to the $1.5bn loan facility agreed with China Development Bank in June this year.
“We are dealing with the challenge of an economic slowdown but we have to ride out the downward cycle and not let it detract from our investment plans. We need the investment to increase our efficiency,” Gama told FTW Online.
He added that all funders had agreed to a term of 15 years, including a grace period of four and a half years while the locomotives were under construction.
