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Transnet SOC Ltd: TNFG34- Tap Issuance
Transnet SOC Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1990/000900/30)
Issuer Bond Code: BITRA
Bond code: TNFG34
ISIN: ZAG000203605
TAP ISSUE – TNFG34
The JSE Limited has granted TRANSNET SOC LIMITED'S an additional listing of its TNFG34 Senior,
Unsecured Floating Rate Note, with effect from 27 September 2024. This Applicable Pricing Supplement must
be read in conjunction with the amended and restated Programme Memorandum, dated 17 October 2022,
prepared by Transnet SOC Ltd in connection with the Transnet SOC Ltd ZAR80,000,000,000 Domestic Medium-
Term Note and Commercial Paper Programme.
INSTRUMENT TYPE FLOATING RATE NOTE
Full note details are set out below:
Tap Amount R6,000,000,000.00
Total Amount Following Tap Issue R7,588,000,000.00
Bond Code TNFG34
Issue price 102.54487%
Coupon 3 Month JIBAR plus 350 basis points to be added to the Reference
Rate
Coupon Rate Indicator Floating
Trade Type Price
Maturity Date 7 March 2034
Last day to register By 17h00 on 27 May, 27 August and 26 November, and 25
February of each year until the Maturity Date, or if such day is not
a Business Day, the Business Day before each Books Closed
Period, in each year until the Maturity Date (provided that in each
year which is not a leap year the Last Day to Register in February
shall fall on 24 February)
Books Close Period The Register will be closed from 28 May to 6 June, 28 August to
6 September and 27 November to 6 December and 26 February
to 6 March (all dates inclusive) to Maturity Date in each year until
the Maturity Date (provided that in each year which is not a leap
year, the Books Closed Period in February shall fall between 25
February to 6 March)
Interest Rate Determination Dates 7 June, 7 September, 7 December and 7 March with the interest
determination date being 7 September 2024
Interest Payment Dates 7 June, 7 September, 7 December and 7 March
Issue Date 27 September 2024
Interest Commencement Date 9 September 2024
First Interest Payment Date 7 December 2024
Date Convention Following Business Day
ISIN No ZAG000203605
Additional Information Senior, Unsecured Floating Rate Note
Additional Disclosures
Noteholders are advised of the below updated disclosures in terms of Paragraph 3(5) of the Commercial paper
regulations in relation to this issue of the notes as at the issue date.
As disclosed in Note 40 of the Annual Financial Statements for the year ended 31 March 2024, after performing
the assessment and considering all associated risks, the directors believe that material uncertainties relating to
events or conditions which may cast significant doubt on the entity's ability to continue as a going concern
There is a material uncertainty on whether the Issuer can in all circumstances be reasonably expected to meet
its commitments under the Notes. These are adequately mitigated as detailed in the above-mentioned note. The
directors will continue to manage these mitigation strategies as a priority as it is important that they materialise
as envisaged. The directors after carefully considering the progress of the recovery plan and the financial
support from the Government, through the provision of guarantees, still believes that the Group will continue to
have access to adequate resources and facilities to be able to continue its operations and fund the capital
investment programme for the foreseeable future. However, as at the Issue Date, the Issuer is a going concern
and can in all circumstances be reasonably expected to meet its commitments under the Notes. As at the Issue
Date, the Issuer is a going concern.
All information that may reasonably be necessary to enable the investor to ascertain the nature of the
financial and commercial risk of its investment in the Notes is contained in the Programme Memorandum
and the Applicable Pricing Supplement. The Issuer's latest financial and commercial risks are contained
in its latest annual financial statements for the year ended 31 March 2024 which can be accessed on the
following link: https://www.transnet.net/InvestorRelations/AR2024/31%20March%202024%20AFS.pdf
A summary of the financial and commercial risks are highlighted below:
• The Issuer incurred a net loss of R7,3 billion for the period ended 31 March 2024 (2023 Restated: R5,1
billion) and reported a net current liability position of R62,4 billion for the period ended 31 March 2024
(2023 Restated: R51,1 billion). The Issuer may still be in a net loss and net current liability position at
the financial reporting dates of 30 September 2024 and 31 March 2025.
• For the period ended 31 March 2024, the Issuer achieved a cash interest cover (CIC) of 1,9 times (2023:
2,1 times). Several loans require the Issuer to maintain a CIC covenant at a minimum of 2,5 times and
2,0 times on 31 March and 30 September of each financial year. There is a risk that the Issuer may
breach the CIC covenant as at the financial reporting dates of 30 September 2024 and 31 March 2025.
• The Issuer has been experiencing operational challenges which affected the Group's performance. The
operational challenges, mainly at Freight Rail division contributed to the decline in volumes in the past
few financial years.
• The total borrowings and finance costs significantly increased during the year due to the Issuer obtaining
additional debt and interest rate hikes which puts pressure on the group's cash flows.
• The Issuer continues to navigate an ever-changing legislative landscape on its path of recovery,
including reforms that could result in the corporatisation of National Ports Authority into a wholly owned
subsidiary of the Issuer and split of Freight Rail into Transnet Freight Rail Operating Company (TFROC)
and the Transnet Rail Infrastructure Manager (TRIM) (could also become a wholly owned subsidiary of
the Issuer) which is expected to oversee rail network quality and reliability to deliver the highest possible
tonnage for the business. These reforms are still in the process of assessment, refinement and full
quantification.
• Litigations - The Issuer is a defendant in a litigation with Total Energies Marketing South Africa and
Sasol Oil (Pty) Ltd. The public entity was ordered to pay over R6,0 billion flowing from an alleged breach
of a 1991 contract, as it is alleged that the Issuer overcharged the plaintiffs for the transportation of
crude oil through its pipeline system by not correctly using an agreed formula to determine tariff or price
for such transportation. A provision to the value of R9,3 billion was made in the financial statements,
which considered the claim, interest and legal fees as estimated. The Issuer has filed an application for
leave to appeal on 8 July 2024 which was acknowledged by the appeals registrar on 12 July 2024.
The Issuer's board has developed mitigation strategies and actions to address the challenges that the Group is
experiencing.as disclosed in Note 40 of the annual financial statements for the year ended 31 March 2024.
26 September 2024
Debt Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Date: 26-09-2024 05:31:00
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