(Bloomberg) -- South Africa’s National Treasury agreed to provide a 47 billion-rand ($2.5 billion) guarantee facility to Transnet SOC Ltd., the nation’s beleaguered rail and ports operator.

The company will be able to access 22.8 billion rand immediately, the Treasury said in a statement on Friday. Transnet will have to meet “strict guarantee conditions” for the rest of the funds, according to the statement.

Inefficiencies at Transnet have prompted companies to cut thousands of jobs to reduce costs after failing to ship commodities and other goods. Transnet had requested an equity injection from the state, as its 130 billion-rand debt pile means it’s unable to fund itself in capital markets. It also needs money for a turnaround plan to increase exports that are vital for the economy.

The state rail and port company’s performance has deteriorated rapidly over the past decade as corruption and mismanagement during the administration of former President Jacob Zuma took their toll, followed by pandemic-induced losses. A surge in infrastructure theft and restrictive graft-prevention measures by the Treasury deepened the malaise.

Portia Derby, appointed three years ago as chief executive officer to fix the business, left as the situation grew worse.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.

Author: Paul Burkhardt and S'thembile Cele