Grindrod Shipping Agrees Another Sale and Leaseback Deal

Illustration; Source: Unsplash/Daniel Norris

Singapore-based Grindrod Shipping has reached an agreement for a third sale and leaseback transaction for one of its Handysize drybulk carriers.

The company said that the deal for the 2011-built IVS Magpie was agreed with a Japanese shipowner for a cash amount of USD 10.3 million.

The company will bareboat charter the vessel back for a period of up to 12 years and has the right, but not the obligation, to acquire the unit from the end of the second year of the charter, with the new owner having the right, but not the obligation, to sell the vessel to the company at the end of the 12 year charter period.

Grindrod Shipping explained that the IVS Magpie constitutes part of the security package for its USD 100 million senior secured credit facility and would be released from the security package in connection with the closing of the transaction.

At closing, which is expected to take place in November 2019, the sale would generate around USD 5.4 million of cash for the company after settling the debt associated with the vessel.

The company earlier reached financing arrangements in respect of IVS Knot and IVS Kinglet.

Additionally, the company said that its charter agreement for the long-term chartered-in 2014-built Japanese eco supramax vessel, IVS Crimson Creek, includes a fixed period ending December 2019, with extension options covering a further two years at pre-determined charter rates.

“We have agreed with the owner of the vessel, subject to conclusion of charterparty documentation, to substitute the existing extension option periods and charter rates with a firm extension at a revised rate structure for a period of about 15 to 17 months from December 2019.”

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