Wednesday, March 31, 2021
Grindrod Shipping (GRIN)
Asset Sales Enhance Dry Bulk Exposure – Raising Price Target
Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.
Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Added asset sales improve fleet profile and enhance dry bulk market focus. Agreements to sell two MRs and one small tanker for almost $50 million improves the fleet profile and shifts the focus to the dry bulk market. The Leopard Moon and Leopard Sun, two 2013-built MR refined product tankers, will be sold for $42.8 million. In addition, the Breede, a 2009-built small tanker will be sold for $6.8 million. All sales should be completed in 2Q2021. As a result, the fleet will consist of 15 Handysize, 16, Supramax/Ultramax, and one MR tanker that is bareboat charter-out.
Asset sales reduce financial leverage. Disciplined capital strategy intact. Proceeds and existing cash will pay off secured debt on the vessels and high cost Sankaty debt of $26 million due in June. The debt maturity profile appears manageable with no added debt maturing in 2021. Capital allocation remains disciplined as evidenced by the decision to shun scrubbers. Buybacks might ramp up once the …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
