Taylor Maritime takes stake in Grindrod Shipping
UK-based dry bulk shipping company Taylor Maritime Investments has agreed to acquire a 22.6% stake in Grindrod Shipping Holdings, a dual NASDAQ- and Johannesburg Stock Exchange-listed shipping business.
As informed, Taylor Maritime will buy the stake for a cash consideration of $77.9 million via a private, off-market acquisition from a wholly-owned subsidiary of Remgro Limited, Grindrod Shipping’s largest shareholder.
Following the completion of the transaction in early 2022, TMI will own 24.8% of Grindrod Shipping’s shares, including a 2.2% position already acquired by TMI in the open market.
The deal will be internally funded from the sale of two Chinese built vessels for a combined $42.8 million of proceeds, cash on the balance sheet and short-term drawings on the company’s revolving credit facility.
The investment in Grindrod Shipping is said to be consistent with TMI’s strategy of seeking accretive growth opportunities to increase shareholder returns at a time when dry bulk market fundamentals remain strong with a historically low order book and a robust global demand outlook.
According to Taylor Maritime, the acquisition is also consistent with the company’s policy of fleet renewal through the selective disposal of assets. Grindrod Shipping’s fleet of 25 dry bulk vessels is seen as ‘highly complementary’ to TMI’s existing portfolio with an average age of six years and above average energy efficiency compared with peers.
“Grindrod Shipping is a highly cash generative business and our investment is expected to be accretive from both a capital and income perspective with no impact on our dividend policy, our potential to pay an extraordinary dividend nor on our ungeared long term capital structure,” Edward Buttery, Chief Executive Officer, commented.
In July this year, Taylor Maritime raised $75 million through the issue of new ordinary shares to Handysize dry bulk vessels.
In August, the company bought seven Handysize bulkers built in Japan for an aggregate consideration of $107.8 million.