The global provider of maritime transportation services in the drybulk and product tanker sectors Grindrod Shipping Holdings announced acquisition of an additional 33.25% stake in its IVS Bulk joint venture and the sale of the 2010-built small product tanker Kowie.
A subsidiary of the company, Grindrod Shipping Pte. Ltd (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 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. We can provide no assurance that we will complete the acquisition until such time that the agreements have been executed and implemented.
Separately, a subsidiary of the Company has contracted to sell to an unaffiliated third party the 2010-built small product tanker Kowie for a gross price of US$9.2 million. The vessel is expected to deliver to its new owners during February 2020.
Martyn Wade, the Company’s Chief Executive Officer, said: “The acquisition of one of our partners’ 33.25% stake in IVS Bulk, and corresponding consolidation of the JV’s financial results, represents a critical step in the growth and development of Grindrod Shipping. We will have reduced the number of vessels accounted for under unconsolidated joint ventures from 19 to one over approximately the last two years, a core focus of ours which has the benefit of simplifying the company’s financials and operations."
Martyn added: "IVS Bulk’s 12 vessels are all modern, Japanese built “Eco” vessels that ideally complement our cargo operations. The acquisition is to be financed entirely from cash on hand and new debt, with no equity dilution to our shareholders.”
