Minibus taxi financier Bridge Taxi Finance has raised over R280 million as part of a R1 billion fund raising programme to enable it to continue to finance affordable and safe taxis for the South African taxi industry. The successful fundraising took place during the global COVID-19 pandemic and consequent national lock-down.
“Our ability to raise funding in the debt capital market when South Africa is facing a health pandemic and an economic crisis, shows investors have confidence in our business model, and in the country as a whole,” says Vincent Raseroka, Bridge Taxi Finance chairman.
Redinkcapital, a boutique corporate finance advisory firm, arranged and structured a non-traditional funding solution for Bridge Taxi Finance, through its secured note programme registered with the Johannesburg Stock Exchange.
The Bridge Taxi Finance funding included a single A note rated by Global Credit Ratings and listed on the Johannesburg Stock Exchange (Bridge did not issue any senior notes). Funding was secured at a weighted average interest rate of 11.82% that was slightly above the rate that South Africa’s 10 year government bonds were yielding at that time.
Bridge Taxi Finance provides affordable credit facilities to South African entrepreneurs in the minibus taxi industry. The company sources quality Chinese-made vehicles that are manufactured to South African specifications, and comply with the highest vehicle manufacturing standards in the world. These vehicles play a significant role in the ongoing process of renewing the minibus taxi fleet in South Africa.
As part of the national efforts to fight the spread of the COVID-19 virus, and to assist national health services in providing the best possible care for patients while protecting health professionals, Bridge Taxi Finance is importing 500 ambulances fitted with mobile testing stations from China. These vehicles, together with 150 state of the art ambulances fitted with negative pressure chambers, will be made available to health authorities at cost.
“These vehicles are not bought for profit,” says Raseroka. “We are currently at an advanced level of negotiations to get the new negative pressure chambered-vehicles vetted by the CSIR and local health authorities to get them operational as soon as possible.”
During the COVID-19 crisis, Bridge Taxi Finance has cut its clients’ monthly repayments by R200 per vehicle, to assist operators to purchase sanitising material for drivers who are transporting essential services workers to and from work. Clients’ monthly instalments have been placed on hold where their vehicles are not operational.
“Our policy from the first day that we started our business was that if your vehicle is not operating, you don’t pay your instalment,” says Raseroka.
