Grindrod unit joins fund to create African rail leasing venture

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Johannesburg - Grindrod Freight Services (GFS), a subsidiary of listed freight and logistics company Grindrod, has established a leasing joint venture with the Pembani Remgro Infrastructure Fund (PRIF) to provide innovative and cost effective leasing solutions to the African rail industry.

Called GPR Leasing Africa (GPR Leasing), the new company will be based in Mauritius and be 55 percent owned by GFS and 45 percent by PRIF.

It has already secured orders for 31 locomotives, all of which have either been built new or been refurbished by Grindrod.

GPR Leasing said up to 60 percent of rolling stock in developed rail markets was leased. It aimed to replicate this on the African continent through the joint venture and a similar entity targeting the local leasing market.

Rand Merchant Bank has been appointed as the mandated lead arranger and funder of the debt package in support of GPR Leasing’s activities.

Dave Rennie, the chief executive of Grindrod, said yesterday that the joint venture company would be instrumental in providing funding options for customers looking to buy or operate wagons and locomotives manufactured or refurbished by Grindrod and other original equipment rail manufacturers.

Herc van Wyk, the chief executive of PRIF, said the transaction was an integral part of the fund’s strategy to be the infrastructure fund of choice for private companies looking for a partner with whom to invest in opportunities that had arisen as a result of Africa’s fast economic growth.

Grindrod slipped 0.55 percent to close at R27.20 yesterday. - Business Report

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