Black-owned investment firm Brimstone Investment Corporation’s newly acquired stake in integrated shipping and logistics group Grindrod would pave the way for further diversification into the infrastructure sector.
Brimstone, which led a black economic-empowerment (BEE) special purpose vehicle consortium in acquiring an 8.4% interest in Grindrod for R1.6-billion, said the deal marked an entry into the infrastructure sector, with an expanded footprint into Africa.
The consortium, which included Calulo Investments with a 20% holding, Solethu Investments (13%), Safika Holdings (5%) and the Adopt-A-School Foundation (3%), subscribed for 64-million Grindrod ordinary shares at R25 apiece.
Shareholders contributed R760-million for the deal, while vendor support unlocked another R400-million, with the balance paid through a commercial loan.
Brimstone paid a R450-million cash consideration for a 59.2% shareholding – owning an effective 37.9-million Grindrod shares – in the consortium.
The transaction revealed Brimstone’s leadership and structuring role in larger broad-based BEE transactions, with the group “taking the lead” in the deal and “bringing empowerment firms along” with it as it moved into the “infrastructure space”, Brimstone executive chairperson Fred Robertson noted at the company’s presentation to investments analysts, in Sandton, on Wednesday.
The investment group currently focused on subsidiaries, associates and investments within the financial services, food and healthcare sectors.
“The BEE transaction allows Brimstone to establish infrastructure as a new area of focus, alongside healthcare, food and financial services, which it has been investigating for some time,” the company stated.