Airports Company SA signs new R3 billion loan with banks

Airports Company SA (Acsa) has signed a new R3bn loan with domestic banks and shelved major projects to shore up its finances during the coronavirus crisis, its chief financial officer said on Thursday.

Since March, when a state of disaster was declared to contain the Covid-19 pandemic, major domestic airports, such as the continent’s busiest, OR Tambo closed, knocking revenue at Acsa.

“We’ve got facilities of R3bn confirmed,” Siphamandla Mthethwa said.

The deal with Standard Bank, Rand Merchant Bank and Nedbank doubled an existing R1.5bn overdraft-type facility up for renewal in June, he said, adding that further easing of lockdown restrictions this week to allow inter-provincial leisure travel will help.

Acsa, which is 74%-owned by the government and counts the Public Investment Corporation as its second-biggest shareholder, told lawmakers in May that it needed the Treasury’s support to finance up to R11bn of new debt by 2025.

But Mthethwa said on Thursday this sum was a “worst-case projection” over a six-year period, and the more relevant number is the R3.5bn Acsa needs by 2023.

“So, the nature and form of this support is not confirmed, it is at a sensitive stage and we cannot say whether we are getting a guarantee, an equity injection, or some form of debt,” he said.

Acsa, downgraded by ratings agency Moody’s Investors Service in June for the second time in 2020, has slashed its three-year capital expenditure bill to R2.8bn from a previously projected R17.6bn, Mthethwa said, after shelving a new runway and terminal planned at Cape Town international airport and similar large upgrades at OR Tambo.

The company, which also holds concessions at São Paulo’s Guarulhos International Airport and Chhatrapati Shivaji International Airport in Mumbai, is on track to sell its 10% stake in Mumbai to an unidentified buyer, said Mthethwa, adding, “We have set ourselves a target of June 2021 as the latest we need to conclude the transaction.” — Reuters