Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) (JSE: GSH), a global provider of maritime transportation services in the drybulk and product tanker sectors, announced a number of transactions for the purpose of modernizing its fleet and increasing its financial flexibility and liquidity.
On June 3, 2019, the Company took delivery of the IVS Phoenix, a Japanese-built eco ultramax drybulk carrier newbuilding. As previously disclosed, the vessel has been chartered-in from its owner for a minimum period of
three years with options to extend for up to two additional years, at Grindrod Shipping’s election.
On June 13, 2019, Grindrod Shipping and its joint venture partners agreed to the further extension of the termination date of the IVS Bulk joint venture from June 30, 2019 to September 30, 2019. The Company remains in discussions with its joint venture partners regarding strategic alternatives for IVS Bulk.
On June 20, 2019, the Company sold a portion of the loan it had provided to one of its joint ventures. The sale was at par and provided approximately $7.5 million of cash to the Company.
Grindrod Shipping also recently entered into a sale and leaseback transaction with a Japanese shipowner relating to the 2010-built handysize drybulk carrier, IVS Knot, for a cash amount of $13.0 million (before
commissions but net of charter pre-payments).
The Company will bareboat charter the vessel back for a period of up to 11 years and has the right, but not the obligation, to acquire the vessel from the end of the second year of the charter, with the new owner having the right, but not the obligation, to sell the vessel to the Company at the end of the 11 year charter period.
The IVS Knot previously constituted part of the security package for our $100.0 million senior secured credit facility and was released from the security package in connection with the closing of the sale and leaseback transaction. At closing, the sale generated approximately $6.3 million of cash for the Company after settling the debt associated with the vessel. The transaction closed on June 26, 2019.
The previously announced sale of the IVS Kawana was concluded, with the vessel delivering to the new owner on April 30, 2019. We still expect the Umgeni to deliver to the new owner by June 30, 2019.
Martyn Wade, the Company’s Chief Executive Officer, commented:
“We are delighted to have recently taken delivery of the IVS Phoenix and concluding the sale and leaseback of the IVS Knot, which represents a new source of funding for the Company. The sale and leaseback transaction
adds a new dimension to our longstanding relationship and status within the Japanese market and we believe this affords the Company the potential to leverage this further. Through the IVS Knot and the sale of the joint
venture loan Grindrod Shipping has strengthened its liquidity by approximately $13.8 million without divesting control of any core assets.”
Sea News, June 28