Bakwena Platinum Corridor Concession is proud to announce that it has successfully re-financed the debt of the Bakwena N1N4 Toll Road Project to the value of R3.7 billion, resulting in the largest re-financing of an infrastructure project yet completed in South Africa.
This is a landmark transaction both in terms of the size of the deal and in that it has been achieved under current economic market conditions, where locally and internationally there has been a significant reduction in the volume and value of project financings brought about by the international credit crisis.
The funding, arranged by Nedbank Capital, the investment banking business of Nedbank Group Limited, has been provided to Bakwena, the owner and operator of the 30-year toll concession which provides for the design, finance, construction and is responsible for the ongoing operations, maintenance and upgrading of 385 kilometres of toll road between Pretoria and Bela Bela on the N1, and between Pretoria and the Botswana Border on the N4.
The funds will be used to re-finance existing debt on more attractive terms which reflect the successful operation of the project, and will also be applied to ongoing capital expansion plans of the project.
Said Graeme Blewitt, CEO of Bakwena , “The company is in its eighth year of operation, its stable and successful operations has enabled it to procure better priced debt which reflects the fact that the risks have reduced, and investor and lender confidence has increased over time. The initial road construction has been successfully completed and traffic forecasts are proving themselves to be comfortingly accurate”.
The re-financing had been achieved through the collaborative efforts of Bakwena, its shareholders, the South African National Roads Agency Limited (“SANRAL”), the Company’s lenders and transaction advisors.
“The re-financing helps Bakwena to focus on providing its road users with a road that meets international engineering and safety standards by providing various upgrades on the N1 and N4. It also allows for the upgrade of existing infrastructure and further supports the upliftment of the communities along its corridor through various corporate social initiatives” said Blewitt.
Mike Peo, head of Infrastructure and Energy at Nedbank Capital, said the bank is extremely proud to have led a transaction of such landmark importance under current market conditions. He also gave credit to the existing Lenders to the company who’s participation enabled the transaction to complete, which included Nedbank, Absa, Futuregrowth, Momentum, Metropolitan Life, Standard Bank and the European Investment Bank.
“Bakwena has proven to be one of the most successful public private partnerships in the South African market and the performance of the management and operations of the toll concession supported the largest financing of this nature to date.
This is testimony to both the importance of the sector, which assumes increasing significance under the economic stimulus plans of Government and to the robustness of the underlying project which has proven its viability over eight years of operations. SANRAL is currently investing enormous sums into infrastructure, aided and complemented by the private sector financial institutions, which demonstrates the financial sector’s confidence in the local economy and in the importance of investment in the infrastructure space. Nedbank Capital continues to be a leading investor in infrastructure projects of this nature,” said Peo.
The positive sentiment was echoed by Andrew Johnstone, Managing Director of the African Infrastructure Investment Managers, representing the largest domestic shareholder in the Company, The South Africa Infrastructure Fund. “This transaction reflects the successful coming together, and proving of, international investors in the form of ACS Dragados and Cofides of Spain and South African Investors, the private and public sector, and the disciplines of technical and financial, into a project which makes a significant difference to South Africa’s economic capacity and social well being.”
Theuns Ehlers, head of Project Finance at Absa Corporate and Business Bank said “As a lender to the original Bakwena transaction in 2001, Absa’s role as co-underwriter and its significantly expanded funding participation in this refinancing is not only a reflection of the bank’s recognition of the success of Bakwena and comfort with management and shareholders, but also an indication of Absa’s commitment and appetite for funding in the infrastructure and the public private partnership arenas.”
The transaction benefited from the professional services of Macquarie First South – financial advisor, Webber Wentzel, Werksmans and Bell Dewar – legal, Arcus Gibb, Jeffares and Green, and GOBA – technical.
Nedbank Capital was the Mandated Lead Arranger of all facilities in the re-financing and is the largest single lender to the project alongside Absa Corporate and Business Bank, the second largest underwriter and funder of the new facilities.
