Grindrod Shipping enters into a $26.8m sale and lease back transaction
Grindrod Shipping Holdings said today it has entered into a sale and leaseback transaction with a Japanese shipowner for its 2016-built medium range product tanker Matuku for $26.8 million (R391.18m).
The global provider of maritime transportation services in the drybulk and product tanker sectors said the company will bareboat charter the vessel back for a period of up to 15 years and has the right to acquire the vessel from May 2022.
Grindrod Shipping intends to utilise approximately $9.3m of net proceeds of the refinancing, together with cash on hand, to repay early $10m of its other $35.8m senior secured credit facility, which would materially reduce their net interest expense and remaining scheduled maturities in 2021.
The group also expects to take delivery of the IVS Atsugi, a Japanese-built eco ultramax drybulk carrier newbuilding.
Grindrod said as it was previously disclosed, the vessel will be chartered-in from its owner for a minimum period of two years with options to extend for up to two additional years, at the company’s election.
“In addition, the company holds options to purchase the vessel in the future,” the group said.
Grindrod Shipping chief executive Martyn Wade said the sale and leaseback of Matuku is another testament of their ability to leverage their long-standing relationships with leading Japanese industry participants, one of our company’s distinct competitive advantages.
“Furthermore, the addition of the IVS Atsugi to our fleet is in line with our strategy to focus on Japanese built “eco” vessels, which enjoy distinct operational and commercial advantages,” Wade said.
Grindrod Shipping share price was up by 3.27 percent to R56.79 a share on the JSE on Wednesday afternoon.