Latest news with #R41bn
IOL News
a day ago
- Business
- IOL News
Government approves R94. 8bn guarantee to bolster Transnet's finances
This decision made on Friday comes as a part of the government's ongoing efforts to support Transnet's operational stability amid mounting challenges posed by credit downgrades and economic volatility. The government has approved an additional R48.6 billion guarantee for Transnet, ensuring that the entity can cover all debt redemptions over the next five years and maintain adequate liquidity levels. This decision made on Friday comes as a part of the government's ongoing efforts to support Transnet's operational stability amid mounting challenges posed by credit downgrades and economic volatility. The newly approved R48.6bn guarantee follows an earlier allocation in May, which saw the government approving R51bn in guarantees, including R41bn aimed at funding requirements for the 2025/26-2026/27 fiscal years and R10bn designated for liquidity management purposes. The total financial backing for Transnet now amounts to R94.8bn, what the Department of Transport said was a testament to the government's commitment to restoring the financial health of the embattled entity. Transnet, which plays a crucial role in the logistical backbone of the country, has been grappling with operational inefficiencies and financial strain exacerbated by credit rating downgrades. These downgrades have not only affected the company's access to capital but have also heightened the risk associated with its existing debt obligations. Recognising these challenges, the government has allocated an additional R46.2bn to mitigate the risks from potential further negative credit actions, thereby seeking to safeguard the company's financial future. In her announcement last month, Transport Minister Barbara Creecy indicated that the government was committed to working closely with Transnet to ensure both operational and financial improvements. This initiative is part of a broader strategy aimed at accelerating reforms within the logistics sector, which includes encouraging private sector participation to enhance efficiency and productivity. This latest financial intervention is critical in ensuring that Transnet can continue to operate effectively while implementing necessary reforms. The government's steadfast support reflects its recognition of the vital role Transnet plays in South Africa's economy, responsible for moving goods across vast distances and supporting numerous industries. BUSINESS REPORT
TimesLIVE
2 days ago
- Business
- TimesLIVE
Transnet secures nearly R95bn in fresh government guarantees
The government will give Transnet an additional R94.8bn guarantee facility to support the ailing state-owned logistics firm's recovery plan, the transport ministry said on Sunday. The facility comes on top of a R51bn guarantee the government announced for Transnet in May, including R41bn to cover the company's funding needs over the 2025/26 and 2026/27 financial years, and R10bn earmarked for debt servicing and capital investments. The new guarantee comprises R48.6bn to cover all debt redemptions over the next five years, and an additional R46.2bn to mitigate against further credit rating actions, the ministry said in a statement. The government is supporting Transnet's five-year turnaround strategy, which seeks to restore freight rail volumes to 250-million metric tons per year by the end of the period. The volumes fell to 152 million metric tons in the 2023/24 financial year, from a peak of 226 million metric tons in 2017/18. Transnet has failed to deliver reliable freight rail and port services due to equipment shortages and maintenance backlogs after years of under-investment. Its capacity has been further constrained by widespread cable theft and vandalism. The company's debt has risen to R145bn from R138bn at the end of the 2023/24 financial year, according to its chairperson Andile Sangqu. Its loss widened to R7.3bn in 2023/24, from R5.7bn the year before . Transnet's struggles have cost mineral exporters, primarily coal and iron ore producers, billions in lost revenue. The exporters account for nearly 70% of Transnet's freight volumes. Due to a lack of railway capacity, most chrome exports now reach ports by road, raising costs, damaging roads and the environment.
IOL News
19-06-2025
- Business
- IOL News
Moody's warns of threat to Transnet ratings as government steps in with guarantees
This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to Transnet to allow the company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. Image: File Moody's Ratings has warned that Transnet's ratings will remain under review for downgrade until the South African government completes the process to allocate additional guarantees by the end of July. This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to allow the State-owned freight and logistics company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. The Minister of Transport, with the concurrence of the Minister of Finance, approved a R51 billion guarantee facility for Transnet's capital investment programme and debt obligations. The facility will enable Transnet to refinance maturing debt and ensure the organisation's continued access to adequate resources and facilities to be able to continue its operations as well as fund the capital investment programme for the foreseeable future, while also enabling Transnet to focus on operational improvements and strategic reforms. The formalized R51bn guarantee facility has been structured to cover R41bn in funding needs that Transnet expects through the end of financial year 2027, along with R10bn in guarantees for liquidity facilities. Moody's on Thursday said it viewed the significant support measures as strengthening the financial stability of Transnet. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Moody's senior credit analyst Lisa Jaeger said they viewed the announcements as materially credit positive for Transnet and will monitor the outcome of the process as part of the ratings review on Transnet. 'Until the conclusion of our review, Transnet's ratings, including its long-term corporate family rating (CFR) of Ba3, and its Baseline Credit Assessment (BCA) of b3 remain under review for downgrade,' Jaeger said. 'Based on the government's most recent statement, we understand that it is working on providing at least an additional R48.6bn in guarantees, available until March 2030. This would bring the total guarantees announced in 2025 to R99.6bn, the amount needed to cover Transnet's debt maturities over the next five years.' The new guarantee facilities would be following a previous R47bn guarantee facility provided in December 2023, which has been exhausted. The R51bn guarantee facility that has already been formalized is easing Transnet's immediate liquidity pressure and will enable it to meet a R9.9bn local bond maturity in August 2025,. Jaeger said this was a payment they did not expect Transnet would be able to reliably meet without additional government support. 'While this facility does not provide a permanent solution to Transnet's ongoing liquidity challenges, we believe the announced additional guarantees would support a sustainable improvement in the company's liquidity position,' Jaeger said. 'If the government provides an additional R48.6bn in guarantees as implied by the latest announcement, the total guarantees to Transnet would increase to R150.1bn, which exceeds Transnet's total debt balance of R136bn as of September 2024. 'We expect Transnet's total debt will continue to slightly increase over the next two years, nevertheless, the company would then be able to refinance nearly its entire debt with government guarantees. We believe this will substantially reduce the company's refinancing risk and ensure it maintains an adequate liquidity profile while Transnet continues to progress with its operational turnaround plan.' Transnet falls under Moody's Government-Related Issuers (GRI) methodology given its 100% government ownership. Moody's GRI assumptions are comprised of 'Very High' default dependence with the government of South Africa and 'High' probability of extraordinary support from the government, resulting in three notches of uplift of the company's Ba3 CFR from its b3 BCA. Jaeger said Moody's rating review will focus on the sufficiency of government support measures to bring the company's capital structure and liquidity position on a sustainable footing.
IOL News
11-06-2025
- Business
- IOL News
Sana Bidco raises final offer for Assura to £1. 7bn as board withdraws support for rival PHP bid
Assura, a leading UK healthcare real estate investment trust, on Tuesday accepted a sweetened, best and final cash offer from private equity-backed Sana Bidco, valuing the company at approximately £1.7 billion (R41bn). Image: File Assura, a leading UK healthcare real estate investment trust, on Tuesday accepted a sweetened, best and final cash offer from private equity-backed Sana Bidco, valuing the company at approximately £1.7 billion (R41bn). Assura is listed on the London Stock Exchange with a secondry listing on the JSE. The deal comes after a brief bidding war with Primary Health Properties (PHP), which has now been effectively sidelined. Sana Bidco - a consortium formed by US private equity giant Kohlberg Kravis Roberts (KKR) and infrastructure investor Stonepeak - increased its cash offer to 50.42 pence per share, up from its original bid announced on April 9. Including declared dividends of 1.68 pence, the offer values Assura shares at 52.1 pence, representing a 39.2% premium over the pre-offer closing price on February 13. It values the entire issued and to be issued ordinary share capital of Assura at approximately £1.7bn on a fully diluted basis. In a statement, Assura said the revised terms are now unanimously recommended by its board, following a 'careful and thorough' evaluation of the rival PHP bid, which was announced in May and offered a mix of shares and cash. "The Board's decision to recommend the offer from KKR and Stonepeak follows a careful and thorough evaluation of both offers, during which the Board has been firmly focused on its fiduciary duty to shareholders," said Assura's non-executive chair Ed Smith. "KKR and Stonepeak are highly experienced investors in healthcare and infrastructure and I am confident that with their support, and the additional capital they will provide, Assura will continue to deliver the high-quality healthcare infrastructure our communities need." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Certainty Over Synergies The board cited several concerns over PHP's proposal, saying it "presents material risks and downsides to Assura shareholders, which undermine the potential benefits of the proposed combination under the PHP offer". Concerns including: Elevated leverage " significantly exceeding the target loan-to-value ratios of both Assura and PHP" , , Execution risk: The Assura Board noted the intention of PHP to reduce leverage of the combined group through asset disposals, including that of Assura's portfolio of UK private hospitals. Reduced exposure to long-dated, inflation-linked leases. The PHP offer would have involved asset disposals, notably Assura's private hospital portfolio, to manage debt – a move the Assura board viewed as high-risk and potentially value-destructive. The Assura board said it believes that Bidco's best and final increased cash offer provides the certainty of cash today to Assura shareholders, alongside long-term capital to fund significant investment in the UK's healthcare infrastructure and support investments in the NHS estate. The Bidco offer now moves forward via a traditional takeover offer under the Companies Act, replacing the previously proposed scheme of arrangement. The switch allows Bidco to move quicker and provides more deal certainty. To succeed, Bidco must secure over 50% of Assura's share capital, a threshold it aims to surpass with acceptances and acquisitions. With the board's full support, a higher cash price, and diminishing prospects for the PHP proposal, the path appears clear for Bidco to take control of one of the UK's most prominent healthcare landlords in the coming weeks. BUSINESS REPORT Visit:
TimesLIVE
22-05-2025
- Business
- TimesLIVE
Transnet gets R51bn government guarantee
The government has agreed to give ailing state-owned logistics group Transnet a R51bn guarantee facility, the transport ministry said on Thursday. Transnet has struggled to provide adequate freight rail and port services for years because of equipment shortages and maintenance backlogs linked to underinvestment, with cable theft and vandalism also damaging the rail network. The support package comprises a R41bn guarantee for Transnet's funding requirements in the 2025/2026 and the 2026/2027 financial years and a R10bn guarantee to help it service debt and make capital investments. Transnet said the support would allow it to build on progress with strategic rail and port reforms.
