Grindrod Updates on IVS Bulk Fleet

Maritime Activity Reports, Inc.

June 27, 2019

Pic: Grindrod Shipping

Pic: Grindrod Shipping

Singapore-based Grindrod Shipping Holdings, a global provider of maritime transportation services in the drybulk and product tanker sectors, announced a number of transactions for the purpose of modernizing its fleet and increasing its financial flexibility and liquidity.

The shipping services company said in a press note that it took delivery of the IVS Phoenix, a Japanese-built eco ultramax drybulk carrier newbuilding on June 3, 2019.  

As previously disclosed, the vessel has been chartered-in from its owner for a minimum period of three years with options to extend for up to two additional years, at Grindrod Shipping’s election.

Meanwhile, Grindrod Shipping and its joint venture partners agreed to the further extension of the termination date of the IVS Bulk joint venture from June 30, 2019, to September 30, 2019.  The Company remains in discussions with its joint venture partners regarding strategic alternatives for IVS Bulk.

Grindrod Shipping also recently entered into a sale and leaseback transaction with a Japanese shipowner relating to the 2010-built handysize drybulk carrier, IVS Knot, for a cash amount of $13.0 million (before commissions but net of charter pre-payments).  

The Company will bareboat charter the vessel back for a period of up to 11 years and has the right, but not the obligation, to acquire the vessel from the end of the second year of the charter, with the new owner has the right, but not the obligation, to sell the vessel to the Company at the end of the 11 year charter period.

The IVS Knot previously constituted part of the security package for our $100.0 million senior secured credit facility and was released from the security package in connection with the closing of the sale and leaseback transaction.  

At closing, the sale generated approximately $6.3 million of cash for the Company after settling the debt associated with the vessel.  The transaction closed on June 26, 2019.

The previously announced sale of the IVS Kawana was concluded, with the vessel delivering to the new owner on April 30, 2019. We still expect the Umgeni to deliver to the new owner by June 30, 2019.

Martyn Wade, the Company’s Chief Executive Officer, said: “We are delighted to have recently taken delivery of the IVS Phoenix and concluding the sale and leaseback of the IVS Knot, which represents a new source of funding for the Company."

He added: "The sale and leaseback transaction adds a new dimension to our longstanding relationship and status within the Japanese market and we believe this affords the Company the potential to leverage this further.  Through the IVS Knot and the sale of the joint venture loan Grindrod Shipping has strengthened its liquidity by approximately $13.8 million without divesting control of any core assets.”

The drybulk business, which operates under the brand “Island View Shipping” (IVS) includes a fleet of 17 handysize drybulk carriers and 13 supramax/ultramax drybulk carriers on the water with four ultramax drybulk carriers under construction in Japan due to be delivered in 2019 and 2020.

The tanker business, which operates under the brand “Unicorn Shipping” includes a fleet of seven medium range tankers and three small tankers (including the Umgeni).

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