Grindrod Shipping Holdings has announced a number of transactions relating to the acquisition of the remaining 31.14% equity stake in its IVS Bulk joint venture (IVS Bulk).
Grindrod Shipping Holdings is a global provider of maritime transportation services, predominantly in the drybulk sector.
A subsidiary of the company, Grindrod Shipping, has agreed to acquire the remaining shares in IVS Bulk held by an affiliate of Bain Capital Credit (Bain) for $46.3-million, comprising of $37.2-million for the ordinary equity shares and $9.1-.million for the preference shares.
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 Grindrod Shipping Holdings and Bain using available cash at IVS Bulk; 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 available cash on Grindrod Shipping’s balance sheet.
Grindrod Shipping Holdings will receive $18.2-million from the redemption and Bain will receive $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 September 30.
“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,” says Grindrod Shipping Holdings CEO Martyn Wade.
“IVS Bulk’s 12 vessels are all modern, Japanese built eco vessels that ideally complement our cargo operations.”