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Pretoria - Transport parastatal Transnet announced on Tuesday it will sell
bonds worth $2bn on the London Stock Exchange using its
Global Medium-Term Note (GMTN) programme.
This was "a new milestone" in the implementation of its plan to
fund its R80.5bn infrastructure investment programme,
Transnet said in a statement.
Transnet would be able to issue notes or bonds in either the
United States or European Debt Capital Markets when market
conditions were favourable and cost competitive.
"With the GMTN in place, Transnet does not have to go through
the cumbersome, lengthy and costly process associated with
preparing the legal documentation required for listing a bond each
and every time Transnet wishes to raise debt funding," the
parastatal said.
Acting group chief executive Chris Wells said the bond sale
would enable Transnet to tap international markets to complement
its R30bn Domestic Medium-Term Note Programme.
"Crucially, it will help us to further diversify our sources of
funds - a key objective of our funding strategy."
Through the launch of the GMTN, Transnet will become the first
South African state-owned enterprise to tap international markets
without an explicit government guarantee in recent years, he said.
"The new Transnet is a self-funding entity which receives
neither government subsidy nor explicit government guarantees.
"It borrows on the strength of its balance sheet."
Transnet was confident it offered an attractive investment
proposition and was planning roadshows in key centres in the US and
UK to assess investor appetite for a possible debut issue.
"We are confident of the attractiveness of our portfolio of
projects and, with the successful establishment of the GMTN, we
have met some of the most stringent governance and disclosure
standards in terms of Regulation S 144A (as required for any
company wishing to issue notes to the US investor community).
"We believe investors will find Transnet's offering compelling
given their drive for infrastructure investment in well-managed
companies in developing countries with sound economic management,"
Wells said.
Transnet plans to raise about R35bn in the medium term to
fund its capital investment programme.
- Sapa