Grindrod mulls spinning off shipping business

The South African financial services and logistics provider’s board of directors is advocating separating the shipping segment from the balance of the group because the business’ value is not fairly reflected in the company’s share price.    South African freight and logistics services provider Grindrod intends to separate and list its shipping business apart from its core financial services business, the company said Aug. 23.
   Grindrod said its board of directors has advocated separating the shipping business from the balance of the group because it doesn’t believe that the shipping business’ value is fairly reflected in the company’s share price.
   “We have appointed professional advisors in and outside of South Africa in the fields of shipping, legal and financial to work with us on the unbundling of the shipping business onto an international exchange that supports shipping groups with an inward listing into South Africa,” Grindrod Executive Chair Mike Hankinson said in a statement.
   The spin-off process, Hankinson said, is still developing.
   “We are planning to complete the process in the first half of 2018,” he said.
   Grindrod currently has three business divisions: financial services, freight services and shipping. The company said it suffered a loss of 128.9 million South African rand (U.S. $9.77 million) during the first six months of 2017, due in part to the closure of its rail assembly business, which was a 66 percent improvement from 381 million rand loss (U.S. $28.8 million) during the same period last year.
   The company said profitability in its Ports & Terminals segment has been strong, with volumes handled in dry bulk terminals rising by 62 percent compared to the prior-year comparative period. Dry bulk shipping rates are rising, Grindrod said, due to steadily increasing dry-bulk commodity demand, as well as continued vessel scrapping and a slowdown in newbuilding deliveries.