On March 1, 2024, a wholly owned subsidiary of Grindrod Shipping Holdings Ltd., Grindrod Shipping Pte. Ltd., entered into a US$83.0 million reducing revolving credit facility (which may be increased by an optional reducing revolving accordion credit facility of US$30.0 million) with Nordea Bank ABP, Filial I Norge, as facility agent and security agent, and Nordea Bank ABP, Filial I Norge and Skandinaviska Enskilda Banken AB (Publ), Singapore Branch, as lenders, for the purpose of refinancing the existing $114.1 million senior secured term loan facility with Crédit Agricole Corporate and Investment Bank and Hamburg Commercial Bank AG.
The New Facility was subject to certain conditions precedent which were satisfied on March 7, 2024, and the New Facility was fully drawn on March 8, 2024. Grindrod Shipping is a party, as guarantor, to this agreement. The New Facility has a three-year term, and reduces quarterly, with payment of the outstanding amount on the maturity date. The New Facility bears interest at a rate of Term SOFR plus 2.65% per annum and is secured by, amongst other security, a mortgage over eight vessels and a guarantee by Grindrod Shipping. Under the New Facility, the Company is subject to certain customary covenants, including certain financial covenants, under the most stringent of which Grindrod Shipping, on a consolidated basis, must maintain:
· cash and cash equivalents of no less than the higher of (a) $500,000 per owned or bareboat chartered in vessel and (b) 5% of interest-bearing debt of the Group;
· Adjusted Equity of no less than the higher of (a) 40% of the sum of the liabilities of the Group and Adjusted Equity and (b) $175,000,000; and
· Positive Working Capital,
where (i) Adjusted Equity means the total equity presented in the most recent consolidated financial statements and/or management accounts delivered to the facility agent, by adjusting the vessels’ book values to their current market values obtained through Approved Valuers and (ii) Positive Working Capital means that current assets are greater than the current liabilities.
The financial covenants above replace the covenants under the Refinanced Facility previously reported and are consistent with the covenants across the other credit facilities of Grindrod Shipping.