Grindrod Shipping Holdings Ltd. Announces Voluntary Delisting from Nasdaq Global Select Market

Rhea-AI Summary

Grindrod Shipping Holdings (NASDAQ: GRIN) (JSE: GSH) has announced its intention to voluntarily delist its ordinary shares from the NASDAQ Global Select Market. This decision is connected to the company's proposed Selective Capital Reduction under Singapore law. The delisting process will begin with the filing of Form 25 with the SEC on August 16, 2024, and is expected to be effective before the opening of Nasdaq on August 26, 2024.

As part of the Selective Capital Reduction, all ordinary issued shares, except those held by Good Falkirk (MI) , will be cancelled on August 16, 2024. Participating Shareholders will receive US$14.25 per Participating Share. This move signifies a significant change in Grindrod Shipping's public trading status and capital structure.

Positive

• Participating Shareholders will receive US$14.25 per Participating Share
• The company maintains its listing on the Johannesburg Stock Exchange (JSE)

Negative

• Voluntary delisting from NASDAQ Global Select Market
• Cancellation of all ordinary issued shares except those held by Good Falkirk (MI)
• Potential reduction in liquidity and access to U.S. capital markets

Insights

Financial Analyst

The voluntary delisting of Grindrod Shipping from Nasdaq is a significant development for investors. This move, coupled with the Selective Capital Reduction, signals a major shift in the company's ownership structure. At $14.25 per share payout, this represents a premium to the recent trading price, potentially benefiting current shareholders.

However, the delisting raises concerns about future liquidity and price discovery for the stock. While the company will maintain its JSE listing, U.S. investors may face challenges in trading the shares. This could lead to a valuation gap between the two markets. The move might also impact the company's ability to raise capital in the U.S. markets in the future, potentially affecting long-term growth prospects.

Legal Expert

The Selective Capital Reduction under Singapore's Companies Act is a complex legal maneuver with significant implications. This process allows Grindrod Shipping to cancel shares held by most shareholders, effectively taking the company private in the U.S. market. The Court Order requirement adds a layer of legal scrutiny, ensuring the process adheres to regulatory standards.

Investors should be aware of potential legal challenges that could arise from minority shareholders who may feel disadvantaged by this move. The delisting process from Nasdaq also involves strict regulatory compliance, including the filing of Form 25 with the SEC. This legal framework aims to protect shareholder interests during such significant corporate actions.

Market Research Analyst

Grindrod Shipping's decision to delist from Nasdaq reflects a broader trend of companies going private or consolidating listings. This move could be driven by factors such as reduced compliance costs, less public scrutiny, or strategic realignment. For the drybulk shipping sector, this could signal a shift towards more concentrated ownership structures.

The $14.25 per share offer provides a clear valuation benchmark for the company. Investors should compare this to industry peers and recent M&A activity in the shipping sector. The delisting might also impact sector indices and ETFs that include Grindrod Shipping, potentially leading to some short-term volatility as these instruments rebalance their holdings.

SINGAPORE, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) (JSE: GSH) (“Grindrod Shipping” or “Company”), a global provider of maritime transportation services predominantly in the drybulk sector, today announced its intention to voluntarily delist its ordinary shares from the NASDAQ Global Select Market (“Nasdaq”), in connection with its proposed Selective Capital Reduction pursuant to Section 78G of the Companies Act of 1967 of Singapore (the “Selective Capital Reduction”). The Company refers to the circular issued to shareholders of the Company (the “Circular”) and its previous press release issued on July 19, 2024. Capitalised terms not otherwise defined in this Announcement (the “Announcement”) shall have the meanings ascribed to them in the Circular.

The Selective Capital Reduction will take effect upon the lodgment of the Court Order on August 16, 2024, at which time all ordinary issued shares held by shareholders of the Company, except for those held by Good Falkirk (MI) Limited (the “Shares”), will be cancelled. In accordance with the rules of the Securities and Exchange Commission and Nasdaq, the Company has provided written notice to Nasdaq of its intent to delist the Shares.

Pursuant to the Selective Capital Reduction, each Participating Shareholder will receive US$14.25 per Participating Share.

The Company intends to file a Form 25 with the Securities and Exchange Commission on August 16, 2024 to effect the delisting. The delisting will be effective before the opening of Nasdaq on August 26, 2024. The Company reserves the right to delay the filing of the Form 25.

About Grindrod Shipping

Grindrod Shipping predominantly owns and operates a diversified fleet of owned and long-term and short-term chartered-in drybulk vessels. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”) includes a core fleet of handysize and supramax/ultramax drybulk carriers. The Company is based in Singapore, with offices in London, Durban and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995 with respect to Grindrod Shipping’s financial condition, results of operations, cash flows, business strategies, operating efficiencies, competitive position, growth opportunities, plans and objectives of management, or other matters. These forward-looking statements, including, among others, those relating to our future business prospects, revenues and income, are necessarily estimates and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Accordingly, these forward-looking statements should be considered in light of various important factors, including those set forth below. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Grindrod Shipping at the time these statements were made. Although Grindrod Shipping believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Grindrod Shipping. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation, Grindrod Shipping’s future operating or financial results; the strength of world economies, including, in particular, in China and the rest of the Asia-Pacific region; cyclicality of the drybulk industry, including general drybulk shipping market conditions and trends, including fluctuations in charter hire rates and vessel values; changes in supply and demand in the drybulk shipping industry, including the market for Grindrod Shipping’s vessels; changes in the value of Grindrod Shipping’s vessels; changes in Grindrod Shipping’s business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs; competition within the drybulk industry; seasonal fluctuations within the drybulk industry; Grindrod Shipping’s ability to employ Grindrod Shipping’s vessels in the spot market and Grindrod Shipping’s ability to enter into time charters after Grindrod Shipping’s current charters expire; general economic conditions and conditions in the coal industry; Grindrod Shipping’s ability to satisfy the technical, health, safety and compliance standards of Grindrod Shipping’s customers; the failure of counterparties to Grindrod Shipping’s contracts to fully perform their obligations with Grindrod Shipping; Grindrod Shipping’s ability to execute Grindrod Shipping’s growth strategy; international political conditions, including additional tariffs imposed by China and the United States; potential disruption of shipping routes due to weather, accidents, political events, natural disasters or other catastrophic events; vessel breakdowns; corruption, piracy, military conflicts, political instability and terrorism in locations where we may operate, including the conflict between Russia and Ukraine; fluctuations in interest rates and foreign exchange rates and changes in the method pursuant to which the Secured Overnight Financing Rate and other benchmark rates are determined; changes in the costs associated with owning and operating Grindrod Shipping’s vessels; changes in, and Grindrod Shipping’s compliance with, governmental, tax, environmental, health and safety regulations; potential liability from pending or future litigation; Grindrod Shipping’s ability to procure or have access to financing, Grindrod Shipping’s liquidity and the adequacy of cash flows for Grindrod Shipping’s operations; the continued borrowing availability under Grindrod Shipping’s debt agreements and compliance with the covenants contained therein; Grindrod Shipping’s ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of Grindrod Shipping’s vessels; Grindrod Shipping’s dependence on key personnel; Grindrod Shipping’s expectations regarding the availability of vessel acquisitions and Grindrod Shipping’s ability to buy and sell vessels and to charter-in vessels as planned or at prices we deem satisfactory; adequacy of Grindrod Shipping’s insurance coverage; effects of new technological innovation and advances in vessel design; and the other factors set out in “Item 3. Key Information-Risk Factors” in Grindrod Shipping’s Annual Report on Form 20-F for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 27, 2024. Grindrod Shipping undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events except as required by law.

Company Contact:	Investor Relations / Media Contact:
Edward Buttery CEO
Grindrod Shipping Holdings Ltd.	Grindrod Shipping Holdings Ltd.
1 Temasek Avenue, #10-02 Millenia Tower	1 Temasek Avenue, #10-02 Millenia Tower
Singapore, 039192	Singapore, 039192
Email: ir@grindrodshipping.com	Email: ir@grindrodshipping.com
Website: www.grinshipping.com	Website: www.grinshipping.com

FAQ

When will Grindrod Shipping (GRIN) delist from NASDAQ?

Grindrod Shipping (GRIN) is expected to delist from NASDAQ effective before the opening of the market on August 26, 2024.

What is the price per share for Grindrod Shipping's (GRIN) Selective Capital Reduction?

Participating Shareholders in Grindrod Shipping's (GRIN) Selective Capital Reduction will receive US$14.25 per Participating Share.

When will Grindrod Shipping (GRIN) file Form 25 with the SEC for delisting?

Grindrod Shipping (GRIN) intends to file Form 25 with the Securities and Exchange Commission on August 16, 2024, to initiate the delisting process.

What happens to Grindrod Shipping (GRIN) shares after the Selective Capital Reduction?

After the Selective Capital Reduction, all ordinary issued shares of Grindrod Shipping (GRIN), except those held by Good Falkirk (MI) , will be cancelled on August 16, 2024.