Public Finance Management Act, 1999 (Act No. 1 of 1999)NoticesBorrowing Powers of Water Boards listed under Schedule 3 Part B of the Act - Mhlathuze WaterNotice No. 2049 of 2022 |
Notice No. 2049
29 April 2022
GG 46288
National Treasury
I, ENOCH GODOGWANA, MINISTER OF FINANCE, acting in terms of section 66(3)(b) of the Public Finance Management Act, 1999 (Act No 1 of 1999), hereby authorise the accounting authority of Mhlathuze Water to have the following limited borrowings:
MHLATHUZE WATER: BORROWING AUTHORISATION AND RELATED LIMIT |
|
FINANCIAL YEAR |
TOTAL INTEREST-BEARING DEBT/ BORROWINGS AMOUNT |
Ending 30 June 2022 Ending 30 June 2023 Ending 30 June 2024 |
R136.610 million R216.265 million R265.920 million |
The proposed borrowing limits reflect the maximum interest-bearing borrowings that Mhlathuze Water may have at the end each respective financial period. This means that for as long as Mhlathuze Water has interest-bearing borrowings on its statement of financial position (or balance sheet), it will need to adhere to the limits above. A new authorisation will have to be considered upon expiry, provided Mhlathuze Water has outstanding interest-bearing borrowings.
The borrowing authorisation and related limit is approved with the following compliance requirements:
| 1. | A minimum cash interest cover (CIC) ratio of 3 times, calculated as follows: cash generated from operations (after changes in working capital) divided by cash finance costs (from the cash flow statement); |
| 2. | A minimum debt service cover ratio (DSCR) of 1 time, calculated as follows: cash generated from operations (after changes in working capital) divided by total debt service costs (debt capital repayments plus gross interest paid – from the cash flow statement); |
| 3. | A gearing limit of 50% calculated as follows: interest-bearing borrowings divided by total equity; |
| 4. | Mhlathuze Water submits quarterly progress reports to the Asset and Liability Management Division on the above-mentioned requirements as well as the Borrowing Programme and Funding Plan, including utilisation of the borrowing limit within 30 days after the end of each quarter; and |
| 5. | Mhlathuze Water submits bi-annual reports to the Asset and Liability Management Division on the progress of major capital expenditure projects and the project plans for the upcoming 6 months. |
Enoch Godongwana
Minister of Finance
Date: 14/01/2022