South African logistics and shipping company Grindrod Ltd has sold a 25% plus one share stake in its main South African operations to two empowerment enterprises
Under the Republic’s national empowerment policy, businesses in each industry are expected to sell or transfer equity to companies or investment funds that are largely owned by groups disadvantaged during the Apartheid era, including women, disabled people and non-white South Africans.
In this case, Grindrod sold a 15% stake to black empowerment enterprise (BEE) Calulo Petrochemicals Ltd, which focuses on the oil and chemicals industries, and 10% equity to the Adopt a School Foundation, for a combined price of R274M, although Grindrod itself financed most of the deal.
In a statement, the company said: “In negotiations with possible partners, Grindrod balanced its need to incorporate strategic commercial partners into the business as well as supporting the sustainability of worthy broad based enterprises.”
The new partners are locked into the deal for 10 years, although they are permitted to sell their shares to other BEEs after seven years. Grindrod’s CEO Alan Olivier commented: “We have a successful business relationship with Calulo and have already partnered with them in our South African marine bunkering and coastal shipping operation.
“The third party in this transaction, Adopt a School Foundation, fits very well with Grindrod’s social responsibility focus which has always been to support education initiatives.”
Grindrod has three main divisions: Grindrod Logistics, which includes cargo clearance and freight forwarding; Grindrod Intermodal, which includes container handling and warehousing; and Grindrod Terminals, which comprises dry and liquid bulk terminals at Cape Town, Durban and Richards Bay.
Similar transactions have been or will be undertaken by other companies in the shipping sector in the near future, although the details of empowerment negotiations are usually not released until deals have been concluded.
