Grindrod announces a R2 Billion capital raising supported by Remgro

Tuesday, September 20, 2011

Grindrod and Remgro issued a joint announcement today regarding a proposed R2 billion capital injection into Grindrod to be implemented by way of a specific issue of new Grindrod ordinary shares for cash. In terms of the agreement between Grindrod and Remgro, Remgro will subscribe for 133 333 334 new Grindrod ordinary shares at a subscription price of R15.00 per share, an 8.8% premium to the unaffected 30 day VWAP. The new Grindrod ordinary shares represent approximately 22% of the enlarged ordinary share capital of Grindrod. Remgro will make an offer to Grindrod’s existing shareholders allowing them to participate in the capital raising. Grindrod shareholders will be offered a non-renounceable right to subscribe for 28.6657 new Grindrod ordinary shares in Remgro’s stead for every 100 Grindrod ordinary shares held. To the extent that qualifying Grindrod shareholders accept the Remgro offer, the number of new Grindrod ordinary shares to be allotted and issued to Remgro will reduce on a share-for-share basis with any resultant fractions of ordinary shares being rounded up or down to the nearest whole number. The transaction remains subject to the fulfilment or waiver of a number of conditions precedent, including approval by a 75% majority vote of Grindrod shareholders in general meeting. The transaction is in line with Grindrod’s communicated strategy to further diversify its portfolio of businesses and transform into an integrated logistics service provider. The group’s ability to offer full end-to-end supply chain services is a key competitive advantage. In pursuit of this strategy, Grindrod is seeking to accelerate the group’s pipeline of strategic capital projects in Southern Africa. The transformational capital expenditure programme, which will require in excess of R10 billion over the next five years, will result in substantial investment in Grindrod’s strategically positioned ports and terminals capacity, in particular phase 4 of the Maputo Coal Terminal. Commenting on the proposed transaction, CEO Alan Olivier said “Grindrod’s strategically located assets in Southern Africa positions Grindrod for exciting growth. The transaction will support our growth plans and further reinforces Grindrod’s strong financial position. Importantly, we will achieve further flexibility to respond to new opportunities as and when they arise,” “We are delighted that Remgro is supporting the transaction, which we see as a strong vote of confidence in Grindrod and our stated strategy. The weight of Remgro’s strategic insight and financial resources is extremely positive for Grindrod, as we contemplate the next phase of the group’s development. The Remgro offer also affords our shareholders the opportunity to participate in the capital raising on the same terms.” concluded Olivier.

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