Johannesburg - Transnet's credit rating was upgraded by Fitch Ratings agency on Wednesday, the company said.
Transnet's rating was changed from BB+ to BBB, confirming the success of efforts to strengthen its business and financial position, group CEO Brian Molefe said in a statement.
“This is in the midst of downgrades by other rating agencies.”
He said the upgrade confirmed that Transnet had a robust execution plan and appropriate mitigating strategies for its investment programme, the market demand strategy.
It also affirmed Transnet’s ability to raise funds in the market on the strength of its balance sheet without government guarantees, which allowed the fiscus to focus on the country’s other pressing needs.
“The agency stated that Transnet’s credit profile benefits from its position in the country’s rail, port and pipeline services, with a long-term contract base and business diversification underpinning its strong operating cash flows,” said Molefe.
“This upgrade by Fitch Ratings confirms that Transnet has appropriate processes and controls to execute the market demand strategy.”
Transnet planned to raise a third of the R307 billion seven-year infrastructure investment programme from a variety of funding sources.
These included domestic and international bond markets, bank loans and export credit agencies, among others.
“The rest will be funded through cash generated from its operations,” Molefe said.
“This endorsement of our hard work and financial discipline is encouraging.”
He said Transnet was confident that its plans for the execution of the investment programme would enable it to maintain or improve its current credit rating.
Sapa