Latest news with #Transnet
Japan Times
8 hours ago
- Automotive
- Japan Times
Toyota files $361 million South Africa flood damage lawsuit
Toyota has filed a lawsuit for 6.5 billion rand ($361 million) in a South African court over 2022 flood damages that shuttered its plant near Durban, Business Day reported. The claim against Transnet SOC, the KwaZulu-Natal Department of Transport and eThekwini Municipality has been brought to the high court in Durban by Toyota South Africa Motors' insurer, Tokio Marine & Nichido Fire Insurance. It alleges that the floods, which closed the Prospecton plant for four months, cost the company about 4.5 billion rand in plant repairs and rehabilitation and more than 2 billion rand in business interruption, the newspaper reported. The suit, which claims interest on the sum, alleges that by failing to maintain waterways and drainage systems that carried the floodwater, the three defendants shared responsibility for the damage. "A successful case on behalf of Toyota could encourage others to seek compensation from municipalities and state-owned enterprises whose failure to deliver causes them losses,' Business Day cited a lawyer unconnected to the case. Immediately after the flood, Toyota predicted a 33% drop in planned vehicle production in 2022 and potential sales revenue losses of over 27 billion rand, the newspaper reported. Prospecton builds the Hilux pickup truck, the Fortuner SUV, Quest and Corolla Cross cars, HiAce minibuses and Hino trucks and buses. About half of production is exported, mainly to Europe. The 2022 KwaZulu-Natal floods and landslides were declared a national disaster and left more than 400 people dead.
Bloomberg
12 hours ago
- Automotive
- Bloomberg
Toyota Files $361 Million South Africa Flood Damage Lawsuit: BD
Toyota Motors Corp. has brought a lawsuit for 6.5 billion rand ($361 million) in a South African court for 2022 flood damages that shuttered its plant near Durban, Business Day reported. The claim against Transnet SOC Ltd., the KwaZulu-Natal Department of Transport and eThekwini Municipality has been brought in the high court in Durban by Toyota South Africa Motors' insurer, Tokio Marine & Nichido Fire Insurance.
IOL News
a day ago
- Business
- IOL News
Moody's warns of threat to Transnet ratings as government steps in with guarantees
This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to Transnet to allow the company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. Image: File Moody's Ratings has warned that Transnet's ratings will remain under review for downgrade until the South African government completes the process to allocate additional guarantees by the end of July. This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to allow the State-owned freight and logistics company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. The Minister of Transport, with the concurrence of the Minister of Finance, approved a R51 billion guarantee facility for Transnet's capital investment programme and debt obligations. The facility will enable Transnet to refinance maturing debt and ensure the organisation's continued access to adequate resources and facilities to be able to continue its operations as well as fund the capital investment programme for the foreseeable future, while also enabling Transnet to focus on operational improvements and strategic reforms. The formalized R51bn guarantee facility has been structured to cover R41bn in funding needs that Transnet expects through the end of financial year 2027, along with R10bn in guarantees for liquidity facilities. Moody's on Thursday said it viewed the significant support measures as strengthening the financial stability of Transnet. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Moody's senior credit analyst Lisa Jaeger said they viewed the announcements as materially credit positive for Transnet and will monitor the outcome of the process as part of the ratings review on Transnet. 'Until the conclusion of our review, Transnet's ratings, including its long-term corporate family rating (CFR) of Ba3, and its Baseline Credit Assessment (BCA) of b3 remain under review for downgrade,' Jaeger said. 'Based on the government's most recent statement, we understand that it is working on providing at least an additional R48.6bn in guarantees, available until March 2030. This would bring the total guarantees announced in 2025 to R99.6bn, the amount needed to cover Transnet's debt maturities over the next five years.' The new guarantee facilities would be following a previous R47bn guarantee facility provided in December 2023, which has been exhausted. The R51bn guarantee facility that has already been formalized is easing Transnet's immediate liquidity pressure and will enable it to meet a R9.9bn local bond maturity in August 2025,. Jaeger said this was a payment they did not expect Transnet would be able to reliably meet without additional government support. 'While this facility does not provide a permanent solution to Transnet's ongoing liquidity challenges, we believe the announced additional guarantees would support a sustainable improvement in the company's liquidity position,' Jaeger said. 'If the government provides an additional R48.6bn in guarantees as implied by the latest announcement, the total guarantees to Transnet would increase to R150.1bn, which exceeds Transnet's total debt balance of R136bn as of September 2024. 'We expect Transnet's total debt will continue to slightly increase over the next two years, nevertheless, the company would then be able to refinance nearly its entire debt with government guarantees. We believe this will substantially reduce the company's refinancing risk and ensure it maintains an adequate liquidity profile while Transnet continues to progress with its operational turnaround plan.' Transnet falls under Moody's Government-Related Issuers (GRI) methodology given its 100% government ownership. Moody's GRI assumptions are comprised of 'Very High' default dependence with the government of South Africa and 'High' probability of extraordinary support from the government, resulting in three notches of uplift of the company's Ba3 CFR from its b3 BCA. Jaeger said Moody's rating review will focus on the sufficiency of government support measures to bring the company's capital structure and liquidity position on a sustainable footing.
The South African
a day ago
- Business
- The South African
South African economy failing behinds its counterparts
The South Africa economy would be R5-trillion better off if we'd simply kept pace with other emerging countries over the last 15 years. In the last decade and a half, the South African economy has grown at an average of 1% annually. However, other emerging counterparts have grown at 1.4% or higher. This damning data was revealed by Investec's Osagyefo Mazwai. 15 years of lost growth coincides with the South African economy plowing money in State-Owned Entities (SOEs) like Eskom, Transnet and the Post Office. 'It is our proposition that the South African economy is falling behind. Had it followed a more pragmatic approach, focusing on the structural enablers of the economy, the outcomes could be much better for society,' Mazwai said in a Daily Investor report. Likewise, the South African economy displays a stark dislocation in GDP per capita. Proving that, essentially, residents are worse off than they were in 2010. The government has been ineffectual in addressing poverty, unemployment and inequality. And, per capita, the rest of the world is 50% richer than the average South African. With more money to play with, many of the country's crippling debt issues could've been avoided. Image: File As such, Investec compared the South African economy to other emerging markets over the same period. Many emerging nations have been growing at upwards of 4.5% per year. 'Had we grown at 4.5%, our nominal GDP would have been just below R12 trillion. Compared this with the actual number, R7.5 trillion, which is 35% less,' explained Mazwai. This lack of economic growth cost government revenue R800 billion in 2024 alone. And remember that the 2025 Budget impasse squabbled over a mere R75 billion from proposed VAT increases. This is an insignificant amount when one considers how much more growth our emerging-market peers have to play with. In practical terms, Mazwai explains that the missing R5 trillion would have been enough to clear nearly all of the country's national debt. Should SASSA grants be given a re-think in light of this damning data? Image: File As such, finance experts point out that Eskom and Transnet's lacklustre performance is arguably the most significant factor impeding the South African economy. Eskom is R400 billion in debt. Transnet is R140 billion in debt. Likewise, South African Social Security Agency (SASSA) grants cost the fiscus around R265 billion annually. SASSA grants, while well-intentioned, breed an unhealthy dependency on the social welfare system, reducing employment. SASSA grant beneficiaries now number 45% of all residents, and five out of nine provinces have more SASSA recipients than salaried employees. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
2 days ago
- Automotive
- IOL News
Toyota files R6. 5 billion lawsuit against KZN government for flood damages
Toyota's Prospecton plant was flooded in the April 2022 floods. | Supplied by Motor Industry Staff Association. Image: Supplied Toyota South Africa Motors has initiated a R6.5 billion lawsuit against the KwaZulu-Natal provincial government, Transnet, and the eThekwini Municipality, claiming damages from the April 2022 floods that severely impacted its Prospecton plant. In summons filed in the Durban High Court, Toyota South Africa Motors Pty Ltd said it had suffered damages to the tune of R6.5 billion. This included costs in excess of R4 billion for repairs and reinstatement work at the storm-impacted plant and R2 billion for business interruption. Transnet, the KZN Department of Transport, and the eThekwini Municipality have been cited as the defendants. Craig Woolley, a director at law firm Norton Rose Fulbright South Africa Inc, which is acting for Toyota, said all three defendants had 'entered an appearance to defend.' In the court papers, Toyota said that the three organisations had failed in their duty to maintain infrastructure and should have known that neglecting such responsibilities could lead to flooding. During the April floods, the structural integrity of the Umlaas Canal and the diversion berm were compromised, leading to stormwater flowing into the Prospecton Industrial Area, where the Toyota plant is situated, causing extensive flooding and damage, read the court papers. It stated that Transnet owned the Umlaas Canal and was responsible for its management and maintenance, as well as the flood risk associated with it. The concrete-lined canal is intended to channel and divert the uMlazi River around the Prospecton Industrial Area. Together with the diversion berm, it forms an integral part of the flood control and prevention mechanism for the Prospecton Industrial Area, it further stated. It said the Department of Transport was responsible for the management and maintenance of the diversion berm, while the municipality owned, managed, and was responsible for the maintenance and control of the stormwater management system for the Prospecton Industrial Area. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The Umlaas Canal, south of Durban, pictured yesterday. The canal was compromised during the April 2022 storm leading to extensive flooding of the Prospection Industrial Area, according to Toyota's court papers. Image: Doctor Ngcobo Independent Newspapers Detailing its court action against each of the defendants, Toyota said Transnet should have known that in the event of the Umlaas Canal and the diversion berm failing to manage this stormwater, the Prospecton Industrial Area was likely to be flooded, resulting in damage to the company's premises and property. It said the defendants failed to ensure that these structures were functioning as required to prevent flooding in the Prospecton Industrial Area. Additionally, it had neglected to carry out regular maintenance on the Umlaas Canal, resulting in structural weaknesses, and failed to repair previous flood damage. It said it fell on the Department of Transport to ensure that the diversion berm and canal were functioning properly and it had failed to do so. It added that the municipality should have known that in the event of the stormwater management system not functioning as required, the area where the plaintiff's business was situated was likely to be flooded. 'As a result of these failures, Toyota was compelled to engage various contractors to repair the damage caused by the flooding and hired specialist engineers to repair the structural damage to the premises, as well as damage to electrical installations, plumbing, air conditioning, and assembly systems.' The company suffered 'damages to fixtures and fittings, office contents, and electronic equipment, and experienced losses due to vehicles being flooded and damaged.' Furthermore, they were unable to conduct business activities during the repair period, leading to additional business interruption losses. 'As a result of the aforementioned issues, Toyota claims to have suffered damages amounting to R6 540 980 194.00, which includes R4 488 642 693.00 for the fair and reasonable costs incurred in the repair and reinstatement of the plaintiff's premises and property and R2 052 337 501.00 for business interruption.' 'The defendants are jointly and severally liable to compensate the plaintiff for the aforementioned amounts, along with interest thereon,' stated the court papers. Ndabe Sibiya, the spokesperson for the KZN Department of Transport, said that MEC Siboniso Duma regarded Toyota as an important stakeholder in the province. 'Respectfully, he does not believe that it will be appropriate at this stage to engage on this matter through the media,' said Sibiya. 'We can only indicate that the cut-off low-pressure system continues to leave a trail of destruction across the province. It has triggered floods, mudslides, and a rise in the water table. Bridges, road infrastructure, and houses have been damaged, costing both the KZN Transport and Human Settlements Departments billions of rands. For instance, in 2022 alone, we needed more than R6 billion to repair roads, and we could only reprioritise R2 billion from our budget,' Sibiya said. eThekwini Municipality spokesperson Gugu Sisilana said the municipality was aware of Toyota's action and had filed a notice to defend. Transnet did not respond to a request for comment by the time of publication. THE MERCURY
