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Grindrod Shipping Holdings to increase IVS Bulk Joint Venture ownership to 100%

Published by , Assistant Editor
Dry Bulk,

Grindrod Shipping Holdings Ltd., a global provider of maritime transportation services predominantly in the dry bulk sector, announced a number of transactions relating to the acquisition of the remaining 31.14% equity stake in its IVS Bulk joint venture.

A subsidiary of the company, Grindrod Shipping Pte. Ltd. (GSPL) has agreed to acquire the remaining shares in IVS Bulk held by an affiliate of Bain Capital Credit (Bain) for a total purchase consideration of US$46.3 million comprising of US$37.2 million for the ordinary equity shares and US$9.1 million for the preference shares contemplated below. The purchase price is based on appraised values as of 13 May 2021 and reflects the IVS Bulk balance sheet as of 30 April 2021. The total purchase consideration is subject to interest at Libor + 3% until closing while changes in the financial position or operating results of IVS Bulk after 30 April 2021 will accrue to Grindrod Shipping.

IVS Bulk intends to redeem in full the US$27.3 million preferred share capital held by the company and Bain using (a) available cash at IVS Bulk, (b) the proceeds from an increase of one of IVS Bulk’s existing credit facilities by US$23 million (although there is no assurance that such increase will be completed), and/or (c) available cash on Grindrod Shipping’s balance sheet. The company will receive US$18.2 million from the redemption and Bain will receive US$9.1 million.

Grindrod Shipping Holdings expects to fund the acquisition of Bain’s ordinary shares through a combination of cash on hand and proceeds received from the redemption of the preference shares. The agreement with Bain is subject to customary closing conditions with closing to occur no later than 30 September 2021.

Martyn Wade, the Grindrod Shipping Holdings Chief Executive Officer, commented: “The acquisition of the remaining shares in IVS Bulk represents a critical step in the growth and development of Grindrod Shipping at a time of very strong freight rates in the dry bulk industry. IVS Bulk’s 12 vessels are all modern, Japanese built Eco vessels that ideally complement our cargo operations.”

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