LONDON, UK: Taylor Maritime Investments (TMI) has agreed to acquire a 22.6% stake in Grindrod Shipping Holdings Ltd, a dual NASDAQ and Johannesburg Stock Exchange listed shipping business (NASDAQ: GRIN) for a cash consideration of $77.9m via a private, off-market acquisition from a wholly-owned subsidiary of Remgro Limited.
The investment in Grindrod Shipping is consistent with Taylor Maritime Investments (TMI) 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.
The acquisition is also consistent with its policy of fleet renewal through the selective disposal of assets. Grindrod Shipping’s fleet is highly complementary to TMI’s existing portfolio with an average age of six years and above average energy efficiency compared with peers.
Edward Buttery, Chief Executive Officer, commented: “We believe the investment in Grindrod Shipping is an excellent opportunity where we know and respect the company which has a high-quality, young and complementary fleet. The Acquisition will be internally funded by asset sales at premium valuations, cash on the balance sheet and prudent, short-term use of the Company’s revolving credit facility.
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.”
Prior to the acquisition, Taylor Maritime Investments (TMI) consulted with a number of its Shareholders to gauge their feedback as to the terms of the acquisition. Feedback from this consultation was supportive and as a result the Board has chosen to proceed with the acquisition.
Grindrod Shipping is a Singapore incorporated, dry bulk owner operator that is dual listed on NASDAQ and the Johannesburg Stock Exchange. Grindrod Shipping focuses on smaller, geared vessel categories similar to those of TMI’s fleet.
Grindrod Shipping owns 25 vessels which are mostly Japanese built, including 15 Handysize vessels (11 Japanese built), nine Supramax and Ultramax vessels (all Japanese built) and one MR (medium range) Product Tanker (Korean built), with an average age of six years. Grindrod Shipping also has seven vessels in its chartered in fleet with purchase options on five.
Grindrod Shipping has a longstanding history in shipping having been founded in South Africa in 1910. Since Grindrod Shipping’s public listing in 2018 it has streamlined its asset ownership structure and concentrated on dry bulk.
Grindrod Shipping reported record gross profit, adjusted EBITDA and adjusted net income for the three months ended 30 September 2021. Grindrod Shipping also declared a Q3’21 cash dividend of US$0.72 per ordinary share and announced that it intended to return 30% of net income in future periods to shareholders through dividends and share repurchases.
Taylor Maritime Investments Limited is a recently established, internally managed investment company listed on the Premium Segment of the Official List and traded on the Main Market of the London Stock Exchange. The Company invests in a diversified portfolio of vessels which are primarily second-hand and which, historically, have demonstrated average yields in excess of the Company’s target dividend yield of 7% p.a. (on the Initial Issue Price).
The Company’s initial investments comprise Geared Ships (Handysize and Supramax types) employed utilising a variety of employment/Charter strategies.