- South African ports, rail operator to borrow from five lenders
- Bank of China, Nedbank, Barclays' Absa unit among the banks
Transnet SOC Ltd. signed 12 billion rand ($853 million) of loans with five lenders including Bank of China Ltd. and Nedbank Group Ltd. to help fund the state-owned ports and rail operator’s acquisition of more than 1,000 locomotives.
The financial institutions agreed to separate deals with Transnet on the same commercial terms, acting Chief Executive Officer Siyabonga Gama told reporters on Monday at the company’s Johannesburg head office. The three other lenders are Barclays Bank Plc’s Absa unit, Futuregrowth Asset Management and Old Mutual Plc.
“The company will use the proceeds of the loan to fund its locomotive fleet acquisition program,” Transnet said in a statement handed to reporters. The purchase of trains from companies including General Electric Co. and Bombardier Inc. “is the single-biggest item of Transnet’s record breaking infrastructure investment,” the company said.
Transnet plans to spend as much as 380 billion rand over the next decade to expand and upgrade rail and port capacity in South Africa, the world’s biggest manganese producer and the continent’s largest source of iron ore and coal. The company said last month it was slowing some investment and shifting from a previous seven-year investment plan amid slumping commodity prices. The acquisition of locomotives will help increase volumes while lowering the average age of the company’s fleet, Transnet said.
Bank of China, Nedbank and Absa will each lend Transnet 3 billion rand, while Futuregrowth and Old Mutual will provide 1.5 billion rand each, Gama said.