Transnet confident it has allayed Moody’s main concerns

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South Africa Headlines News

A potential default on R14bn of debt by the rail utility has been resolved

Transnet, SA’s state-owned rail and ports utility, says it has addressed the concerns underlying the change in outlook to negative by ratings agency Moody’s Investors Service.

Transnet's acting chief financial officer Mark Gregg-Macdonald spoke to Business Day TV about the state-owned company's interim results. The R1.3bn relocation of locomotive manufacturing to Durban, which was prompted by a questionable decision by the previous Transnet management, has resulted in about one-fifth of locomotives being delivered from Canada’s Bombardier and China North Rail over the past five years, a situation Transnet finds untenable.

A potential default on R14bn of debt triggered by an audit qualification in the 2019 full-year results has also been resolved, with all the banks issuing a waiver on calling in their loans. Final letters stating this is the case will be signed on Monday, he said.

 

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