Grindrod Shipping Strengthens Liquidity through IVS Bulk Joint Venture
Singapore-based Grindrod Shipping has unveiled a number of transactions with the aim of modernizing its fleet and increasing its financial flexibility and liquidity.
In early June, the company took delivery of a Japanese-built eco Ultramax, the IVS Phoenix. The drybulk carrier newbuilding has been chartered-in for a minimum period of three years. Grindrod Shipping has options to extend the contract for up to two additional years.
The month also saw Grindrod Shipping and its joint venture partners agree to a further extension of the termination date of the IVS Bulk joint venture from June 30, 2019 to September 30, 2019. The company said it remained in discussions with the JV partners regarding strategic alternatives for IVS Bulk.
On June 20, 2019, Grindrod Shipping sold a portion of the loan it had provided to one of its joint ventures. The sale was at par and provided approximately USD 7.5 million of cash to the company.
The ship owner and operator recently entered into a sale and leaseback transaction with a Japanese company related to the 2010-built handysize drybulk carrier, IVS Knot, for a cash amount of USD 13 million.
Grindrod Shipping 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 to sell the vessel to the company at the end of the 11-year charter period.
The company explained that the IVS Knot previously constituted part of the security package for its USD 100 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 around USD 6.3 million of cash 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. Grindrod Shipping added that it expects the Umgeni to deliver to the new owner by June 30, 2019.
“Through the IVS Knot and the sale of the joint venture loan Grindrod Shipping has strengthened its liquidity by approximately USD 13.8 million without divesting control of any core assets,” Martyn Wade, the Company’s Chief Executive Officer, said.