Grindrod sells final stake in its founding company
GRINDROD will sell its 9.6 percent stake in Grindrod Shipping Holdings, parting once and for all with the company that was established in 1910 and from which it was founded.
Grindrod, which now focuses on ports, terminals and logistics solution services for Africa’s exports and imports, said the stake would be sold as part of its strategy to dispose of non-core investments.
The sale of the shares was expected to result in an improved capital allocation in the company.
Grindrod Shipping, based in Singapore, with officers in London, Durban, Tokyo, Cape Town and Rotterdam, and with a Nasdaq primary listing and secondary listing on the JSE, originated in South Africa and is an international shipping company that owns, charters-in and operates a fleet of dry-bulk carriers and owns one medium range product tanker.
The shares were sold at $13.50 (about R201) per share, raising gross proceeds of $24.87 million.
The sale price represented a discount of 14 percent to the Grindrod Shipping closing price of $15.70 per share on Nasdaq on September 22.
The disposal leaves Grindrod with zero shares in Grindrod Shipping.
In the six months to June 30, 2021, Grindrod’s core businesses, comprising Port & Terminals, Logistics, Bank, and Group, reported strong headline earnings of R345m and a trading profit of R779m.
The headline earnings from core businesses reflect a significant improvement in business performance compared with the six months ended June 30, 2020, as the operations recovered from the Covid-19 lockdowns of 2020.
Port & Terminals and Logistics benefited from the increase in mining minerals exports and other cargo flows, South Africa’s strong citrus season and alternative solutions to the deep-sea shipping lines.
Grindrod Bank remained conservative in lending and continued to maintain substantial capital and liquidity ratios.
Grindrod’s marine fuels and agricultural logistics operations were listed outside the group’s core operations in the 2020 financial statement.
These two divisions reported attributable losses of R69.52m and R675.14m respectively for that year.
Grindrod’s share price rose 21.6 percent to R4.72 on Thursday, on news of the disposal.
Over a year, the share price has appreciated 38 percent.