Airports Company South Africa has concluded the issuance of the “A” preference shares with the Department of Transport as the majority shareholder for an amount of R2,324-billion.
The issuance of preference shares bolsters the company’s liquidity position and is part of the company’s response to the impact of the COVID-19 pandemic and ensures progress towards securing long-term financial sustainability.
Moody’s Investor Services view this issuance as credit positive because it bolsters the company’s liquidity and evidence strong support from the government.
Siphamandla Mthethwa, ACSA’s Chief Financial Officer, says the company has made substantial progress in securing the financial sustainability of the business.
“At a time when we were faced with financial uncertainty and a weakened liquidity position, it is encouraging to learn that shareholders are prepared to support our funding strategy,” he says.
“It is very important to note that taking up these preference shares is a creative investment instrument of financial support under exceptional Covid-19 circumstances. The preference shares have been taken up by the majority shareholder through the Department of Transport in terms of an allocation made in the Second Adjustments Appropriation Act of 2020.
“ACSA’s long track record of being a profitable and well-run state-owned company gives government confidence of earning an additional return as the global and local aviation sectors recover over the next three to five years. The structure of preference shares gives ACSA sufficient space to recover while also guaranteeing shareholders a return on their investment,” says Mthethwa.