Grindrod Shipping announces agreement to acquire additional 33.25% stake in IVS Bulk JV
Grindrod Shipping Holdings Ltd., a global provider of maritime transportation services in the drybulk and product tanker sectors, announced a number of transactions relating to the acquisition of an additional 33.25% stake in its IVS Bulk joint venture (“IVS Bulk” or “JV”) and the sale of the 2010-built small product tanker Kowie, the company said in its release.
A subsidiary of the Company, Grindrod Shipping Pte. Ltd., or GSPL, has agreed to acquire the 33.25% ordinary and preferred equity shares held by one of its two JV partners in IVS Bulk for a total consideration of $44.1 million, thereby increasing its stake to 66.75%. The ordinary equity portion will be acquired for $35.0 million while the preferred equity component will be $9.1 million representing that partner’s 33.25% share of the $27.3 million preferred share capital in IVS Bulk.
The acquisition will be funded through a combination of cash on hand, proceeds received from a refinancing of the IVS Bulk capital structure, and a new loan at GSPL, as summarized below. The agreements are subject to customary closing conditions with an estimated closing date of February 14, 2020.
In order to optimize its capital structure, IVS Bulk has agreed comprehensive refinancing agreements with its lenders. The two existing credit facilities of IVS Bulk will be refinanced with two new senior secured loans totaling $127.3 million, representing an approximate 55% loan-to-value at drawdown with maturity scheduled for 2025.
About Grindrod Shipping Holdings Ltd.
Grindrod Shipping owns and operates a diversified fleet of owned and long-term and short-term chartered-in drybulk vessels and product tankers. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”) includes a fleet of 17 handysize drybulk carriers and 15 supramax/ultramax drybulk carriers on the water with two chartered-in ultramax drybulk carriers under construction in Japan due be delivered in 2020. The tanker business, which operates under the brand “Unicorn Shipping” (“Unicorn”) includes a fleet of seven medium range tankers and two small tankers, including the Kowie. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.