REG - Taylor Maritime Taylor Maritime -TMI - Acquisition of commercial and technical managers

Taylor MaritimeAnnouncement

26/09/2023 07:00

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RNS Number : 6004N  Taylor Maritime Investments Limited  26 September 2023

 

26 September 2023

 

Taylor Maritime Investments Limited (the "Company" or "TMI")

 

Acquisition by Grindrod of TMI's commercial and technical managers

 

Integration and alignment of management for TMI and Grindrod fleets expected
to unlock further synergies

 

The Company today announces that its subsidiary undertakings Grindrod Shipping
Holdings Ltd. (Grindrod) and Grindrod Shipping Pte. Ltd. have agreed to
acquire the entire issued share capital of each of Taylor Maritime Management
Limited (TMML) from Taylor Maritime Group Limited and Tamar Ship Management
Limited (Tamar) from Taylor Maritime Group Limited and Temeraire Holding (MI)
Limited (together the Sellers) (the Transaction).

 

TMML and Tamar are respectively the commercial and technical managers of the
majority of the vessels in the Company's portfolio (excluding those of the
Grindrod group). Such services are provided under the terms of the Framework
Agreement (as described in the Company's IPO prospectus).

 

A key aspect of TMI's investment in Grindrod was the potential to obtain the
benefit of an increased commercial footprint and the economies of scale
achievable in the management of a larger fleet of complementary vessels.  The
acquisition of the commercial and technical managers by Grindrod brings the
management of both companies' fleets together under one entity and, as a
result, such benefits of scale should be more fully realisable.  The fleet
management strategies will be aligned and fleet resources pooled with a view
to creating potential synergies across three key areas:  technical
management, commercial management and vessel accounting.

 

Under the terms of the Transaction, Grindrod Shipping Pte. Ltd. has agreed to
acquire all of the shares of TMML and Tamar for a total consideration of
approximately US$11.75 million via (i) a completion cash amount of US$2.0
million (subject to usual working capital and indebtedness adjustments), (ii)
an allotment and issuance of completion consideration shares of approximately
US$1.95 million, (iii) an issuance of consideration shares at the first
anniversary of the completion date of up to approximately US$3.9 million
(subject to certain earn-out related conditions), and (iv) an issuance of
consideration shares at the second anniversary of the completion date of up to
approximately US$3.9 million (subject to certain earn-out conditions). The
aggregate maximum value of the consideration for the Transaction will not
exceed US$13.5 million. Grindrod intends to finance the Transaction with a
combination of cash on hand and allotment of new Grindrod ordinary shares over
the two years from completion. The number of consideration shares issuable is
calculated based on the volume weighted average price on both NASDAQ and the
Johannesburg Stock Exchange, plus 7.5 percent premium over a three month
period prior to the date of entry of the Transaction agreements. At the
discretion of the buyer, in lieu of new share issuances, there is an option
for any portion of the first year and second year consideration amounts to be
paid in cash, at an increase of 1.10 times and 1.20 times, respectively.

 

TMI Chairman, Henry Strutt commented: "The TMI Board is supportive of unified
management for both the TMI and Grindrod fleets.  It makes a lot of sense
strategically, operationally, and financially and was an important
consideration in making the Grindrod investment."

 

The provision of commercial ship management services and technical management
services to members of the Company's group in respect of the Company's fleet
of vessels as currently provided by TMML and Tamar respectively will continue
following the Transaction without interruption.

 

The Sellers are both related parties of the Company for the purposes of
Chapter 11 of the Listing Rules. Pursuant to Listing Rule 11.1.10R, the
Transaction constitutes a smaller related party transaction.

 

ENDS

 For further information, please contact:

 Taylor Maritime Investments Limited       IR@tminvestments.com (mailto:IR@tminvestments.com)

 Edward Buttery

 Camilla Pierrepont

 Jefferies International Limited            +44 20 7029 8000

 Stuart Klein

 Gaudi Le Roux

 Sanne Fund Services (Guernsey) Limited     +44 1481 737600

 Matt Falla

Notes to Editors

 

About the Company

Taylor Maritime Investments Limited is an internally managed investment
company listed on the Premium Segment of the Official List, its shares trading
on the Main Market of the London Stock Exchange since May 2021.  The
Company specializes in the acquisition and chartering of vessels in the
Handysize and Supra/Ultramax bulk carrier segments of the global shipping
sector.  The Company invests in a diversified portfolio of vessels which are
primarily second-hand.  TMI's fleet portfolio currently numbers 21 vessels in
the geared dry bulk segment.  The ships are employed utilising a variety of
employment/charter strategies.

On 20 December 2022, the Company announced it acquired a controlling majority
interest in Grindrod Shipping Holdings Ltd ("Grindrod") (NASDAQ:GRIN,
JSE:GSH), a Singapore incorporated, dual listed company on NASDAQ and the
Johannesburg Stock Exchange.  Grindrod currently owns 20 geared dry bulk
vessels complementary to the Company's fleet excluding vessels held for
sale.  They are mostly Japanese built, including 13 Handysize vessels and 7
Supra/Ultramax vessels.  Grindrod has seven vessels in its chartered in fleet
with purchase options on three (excluding vessels held for sale).

The combined TMI and Grindrod fleet numbers 48 vessels (including chartered in
vessels but excluding vessels held for sale).

The Company's target dividend policy is 8 cents p.a. paid on a quarterly
basis, with a targeted total NAV return of 10-12% per annum over the medium to
long-term.

The Company has the benefit of an experienced Executive Team led by Edward
Buttery and who previously worked closely together at the Commercial Manager,
Taylor Maritime.  Established in 2014, Taylor Maritime is a privately owned
ship-owning and management business with a seasoned team that includes the
founders of dry bulk shipping company Pacific Basin Shipping (listed in Hong
Kong 2343.HK) and gas shipping company BW Epic Kosan (formerly Epic
Shipping) (listed in Oslo BWEK:NO).  Taylor Maritime's team of industry
professionals are based in Hong Kong, Singapore and London.

For more information, please visit www.taylormaritimeinvestments.com
(http://www.taylormaritimeinvestments.com/) .

About Geared Vessels

Geared vessels are characterised by their own loading equipment. The Handysize
and Supra/Ultramax market segments are particularly attractive, given the
flexibility, versatility and port accessibility of these vessels which carry
necessity goods - principally food and products related to infrastructure
building - ensuring broad diversification of fleet activity and stability of
earnings through the cycle.

IMPORTANT NOTICE

The information in this announcement may include forward-looking statements,
which are based on the current expectations and projections about future
events and in certain cases can be identified by the use of terms such as
"may", "will", "should", "expect", "anticipate", "project", "estimate",
"intend", "continue", "target", "believe" (or the negatives thereon) or other
variations thereon or comparable terminology. These forward-looking statements
are subject to risks, uncertainties and assumptions about the Company,
including, among other things, the development of its business, trends in its
operating industry, and future capital expenditures and acquisitions. In light
of these risks, uncertainties and assumptions, the events in the
forward-looking statements may not occur.

References to target dividend yields and returns are targets only and not
profit forecasts and there can be no assurance that these will be achieved.

 

LEI: 213800FELXGYTYJBBG50

 

 

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