PetroSA: Loans chosen over bonds for growth

State oil company PetroSA was shunning the bond market in favour of loans because dwindling natural-gas reserves would increase its borrowing costs, the acting chief financial officer said. “Bonds are not the best option at this stage,” Webster Fanadzo said on October 11. “We know we won’t get a good rating because of the short lifespan of our current reserves.” The company is seeking to buy filling stations and develop energy projects to offset a loss of revenue from its sole refinery at Mossel Bay. The plant, which converts natural gas into motor fuel, is operating at about 50 percent capacity because of the depletion of gas from off-shore fields. The lack of alternate supplies would deter investors, Fanadzo said. Eskom plans to raise R250 billion from bonds by 2018 for expansion. – Bloomberg