Fitch Upgrades Namport to A+

FITCH Ratings has upgraded Namibian Ports Authority’s (NamPort) national long term rating to A+ from A- and national short term rating to F1 from F2. The outlook is stable, Fitch said.

The upgrade reflects the strengthening of the links between NamPort and the government, demonstrated by the increasing amount of government guarantees for NamPort’s debt and direct equity contributions, Fitch said.

“NamPort’s rating continues to benefit from g parental support as Fitch considers the legal, operational and strategic ties between the company and its sole shareholder to be g. The company is rated on a top down basis from its shareholder, and Fitch assesses that NamPort’s stand alone rating would be significantly below the support driven rating level,” said Fitch.

NamPort remains a strategic asset for the economy, operating the country’s two ports at Walvis Bay and Luumlderitz. Fitch believes NamPort is likely to play a critical role in infrastructure development given its planned port expansion project of N$3,9 billion in the next three years.

“Despite the tangible support, we expect NamPort’s credit metrics to deteriorate, which is a concern for the ratings,” Fitch said.

In addition to the previous state guarantee for NamPort’s loan received from the European Investment Bank in 2002, the Namibian government has guaranteed NamPort’s N$2,98 billion loan from the African Development Bank (AfDB), which is the debt funded portion of its Walvis Bay port expansion.

The size of the port expansion is beyond NamPort’s financial capacity, which means the government has to provide a significant contribution by guaranteeing the AfDB loan and limiting financial risks for NamPort. NamPort’s 24% equity contribution is estimated at N$941million.

In the 2013 budget, the Namibian government provided for a N$ 250 million equity contribution, the first portion of which (N$100 million) was received in February 2014.

Of NamPort’s volume, 53% (in tonnes) relates to landed cargo, which consists of petroleum, bulk and break bulk, containerised cargo and sulphuric acid. The remaining 47% is split between shipped cargo (exports 25%), which comprises mainly salt (largest contributor 42%), fish products, manganese ore, copper and lead, and transhipped cargo (22%), which either combines small shipments into a large shipment or divides the large shipment into smaller shipments mainly on the Asia-Pacific route.

Source : The Namibian