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March 17, 2003

SOUTH AFRICA: DaimlerChrysler 1 billion rand bond seen as next C-class production deal fund raiser

WMRC Daily Analysis reported that DaimlerChrysler South Africa has raised one billion rand ($US122.76m) through a corporate bond on the South African capital market. DCSA has said that the funds raised will be used as working capital for its group of companies in the country.

By bcusack

WMRC Daily Analysis reported that DaimlerChrysler South Africa has raised one billion rand ($US122.76m) through a corporate bond on the South African capital market. DCSA has said that the funds raised will be used as working capital for its group of companies in the country.

However, the bond is also seen as a sign that DCSA is likely to be successful in its bid to produce the new C-Class at its East London plant. Because DCSA has just reported a 50% rise in revenue in 2002, it is believed that it would not need the capital for anything other than a major investment.

The car maker has said previously that it would need to invest some 2 billion rand to upgrade its plant and increase the workforce if it were awarded the C-Class contract. This is the second good sign in recent months that DCSA’s bid for the contract could be successful.

Last month DaimlerChrysler announced plans to introduce 13 new Mercedes passenger car models from 2003 to 2005, suggesting that competition between the group’s production plants will be less intense. The contract for production of the Mercedes C-Class will be announced in October, the report noted.

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