Remgro to facilitate growth projects: Grindrod

Grindrod has a R10 billion rand plus capital project pipeline that aims to diversify its portfolio of businesses.

In a conference call, Grindrod chief executive Alan Olivier said Remgro was a pre-eminent investor in corporate SA, highly regarded by the market, with access to significant financial resources. Olivier said the investment group shared vision with Grindrod's growth strategy in ports and terminals.

Grindrod plans to expand and maximise its existing port and terminal operations, which include the Port of Maputo and its coal terminal. These projects, to be rolled out over a five-year period, would secure rail rolling stock to support operations and expand the availability of coal capacity at the company's Richards Bay dry bulk terminal.

"We continue to see strong demand for commodities. Southern Africa, despite having natural resources, lacks terminal, rail and port infrastructure," Olivier said.

The transaction, which is still subject to conditions precedent, will see Remgro holding approximately 22.3% of Grindrod shares. Remgro will subscribe for 133.3 million new Grindrod ordinary shares at a subscription price of R15 a share, an 8.8% premium to the unaffected 30 day volume weighted average price.

The new shares will result in a R2 billion rand capital injection for Grindrod, some of which is to be used to pay short term debt.