Brazil’s National Bank for Economic and Social Development (BNDES) has agreed to lend Reais 3.5bn ($US 1.1 billion) to rail and port operator Rumo Logistics in order to fund part of its 2015-2018 investment program.
This is the third element in a financial restructuring of Rumo following its merger with Latin American Logistics (ALL) in 2015. In March Rumo reached an agreement with six banks to repay Reais 2.9 billion of its Reais 8.58 billion of debt between now and 2018. This was followed in April by a capital injection of Reais 2.6 billion. As a result, international rating agency Fitch raised Rumo Logistics’ rating outlook from BB- negative to stable.
Rumo now plans to use the funds to acquire 170 locomotives, 2307 freight wagons, double and upgrade sections of track on its main freight corridors, and improve working conditions for its employees.
Rumo currently operates a fleet of around 1000 locomotives and 24,000 wagons on its 12,000 kilometer (7456 mile) network serving the ports of Santos, Paranaguá, São Francisco, and Rio Grande. Rumo increased tonne-km by 3.1% in the first half of 2016 to 20.91 billion from 20.29 billion in 2015. First-half net revenue rose by 17% to Reais 2.56 billion from Reais 2.19 billion last year, while first-half Ebitda increased by 15% to Reais 1 billion and gross profit grew by 8% to Reais 783m.