Grindrod Shipping, a global provider of maritime transportation services predominantly in the drybulk 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., or (“GSPL”), has agreed to acquire the remaining shares in IVS Bulk held by an affiliate of Bain Capital Credit for a total purchase consideration of $46.3 million comprising of $37.2 million for the ordinary equity shares and $9.1 million for the preference shares contemplated below. The purchase price is based on appraised values as of May 13, 2021 and reflects the IVS Bulk balance sheet as of April 30, 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 April 30, 2021 will accrue to Grindrod Shipping.
IVS Bulk intends to redeem in full the $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 $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 $18.2 million from the redemption and Bain will receive $9.1 million.
We expect 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 September 30, 2021.
Martyn Wade, the Company’s 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 drybulk industry. IVS Bulk’s 12 vessels are all modern, Japanese built “Eco” vessels that ideally complement our cargo operations.”