DaimlerChrysler South Africa raised R1 billion in the South African capital market that it said would be used as working capital for its group of companies in the country.
DaimlerChrysler South Africa raised R1 billion in the South African capital market that it said would be used as working capital for its group of companies in the country.
The DCSA corporate bond, the second in two years, was raised at a coupon of 11 per cent for a period of five and a half years.
Rudi Borgenheimer, DCSA’s management board member of finance, described the transaction as “a positive and major success using local markets, particularly in the current difficult capital market and unfavourable global circumstances”.
Numerous investors participated in the transaction, which was concluded after a three-day roadshow presented by DCSA and DCAG representatives in Cape Town, Johannesburg and Pretoria. The book was built this morning and the deal concluded later in the day.
The DCSA bond is guaranteed by DCAG and priced accordingly. The head managers for the issue were Standard Corporate Merchant Bank and Deutsche Bank SA.
An automotive industry observer told that the bond indicated that DCSA was likely to be successful in its bid for the new C-Class contract. He pointed out that seeing as DCSA had just reported an almost 50 per cent rise in revenue to R20,4 billion, he doubted the company would need the increased capital for anything other than a major investment.
A DCSA spokesman said recently that the company would probably need to invest a further R2-billion to upgrade the plant, increase staff and cater for the longer hours if it was awarded the contract. He said a decision on the contract would be made in October.
