Sec Form 13D Filing - Grindrod Ltd filing for GRINDROD SHIPPING HLDGS LTD SH (GRIN) - 2020-09-18

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This Statement is being filed by the following person (the “Reporting Person”):

Grindrod Limited

Grindrod Limited

Grindrod Mews

106 Margaret Mncadi Avenue

Durban, 4001, Kwazulu-Natal, South Africa

Tel: +27 (31) 302 7145

 

Grindrod Limited is principally engaged in the freight business and related industries focused on the movement of cargo by road, rail, sea, and air, providing logistical and specialized services en route.

The name, business address, present principal occupation or employment, and citizenship of the directors and executive officers of the Reporting Person are set forth in Exhibit 99.2 hereto and are incorporated herein by reference.

During the last five years, neither the Reporting Person nor (to the knowledge of the Reporting Person, without independent verification) any of the persons listed on Exhibit 99.2, has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors).

During the last five years, neither the Reporting Person nor (to the knowledge of the Reporting Person, without independent verification) any of the persons listed on Exhibit 99.2 has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws or finding any violation with respect to such laws.

See Item 2(c) above, and Exhibit 99.2.

As of September 18, 2020, as reflected in this Statement, Grindrod Limited beneficially owned an aggregate of 1,841,962 Ordinary Shares, consisting of 1,600,000 Ordinary Shares held of record by Grindrod Limited and 241,962 Ordinary Shares held of record by its subsidiary, Grindrod (SA) Pty Ltd.

During 2014, Grindrod Limited completed a black economic empowerment transaction (the “BEE Transaction”) with Newshelf 1279 (RF) Proprietary Limited (“Newshelf”), pursuant to which Newshelf had subscribed for 64,000,000 of Grindrod Limited’s ordinary shares, par value 0.002 Rand per share (the “Grindrod Limited Shares”) at 25 Rand per share, resulting in Newshelf holding approximately 8.4% of the outstanding Grindrod Limited Shares (the “BEE Placement Shares”).  In addition to the equity contribution by Newshelf, and in order to partially fund the acquisition of the BEE Placement Shares, Grindrod Limited and ABSA Limited (“ABSA”) provided funding to Newshelf by way of a preference share investment, whereby Newshelf issued: 45,000 cumulative, redeemable, Class A preference shares of no par value in the share capital of Newshelf (the “Senior Preference Shares”) to ABSA at  an  issue  price  of 10,000 Rand per Senior Preference Share to the total value of 450,000,000 Rand, in terms of the agreement entered into between Friedshelf 1534 Proprietary Limited (as the holding company of Newshelf, the “Consortium SPV”), Newshelf (as issuer) and ABSA (as subscriber and lead arranger) in 2014 in terms of which ABSA subscribed for the Senior Preference Shares (“Senior Preference Share Subscription Agreement”); and 40,000 variable rate, cumulative, redeemable,  non-participating no par value Class B preference  shares in the share capital of Newshelf (“Vendor Preference Shares”) to Grindrod Limited to the total value of 400,000,000 Rand in order to raise an aggregate 850,000,000 Rand.

The Senior Preference Shares were redeemed and cancelled in 2019 using the proceeds raised via the issue by Newshelf of 61,473 cumulative, redeemable, Class C preference shares of no par value in the share capital of Newshelf (the “Class C Preference Shares”) issued to Grindrod Holdings (South Africa) Proprietary Limited, a wholly-owned subsidiary of Grindrod (“Grindrod Holdings”) at an issue price of 10,000 Rand per Class C Preference Share to the total value of 614,730,000 Rand, in terms of the agreement entered into between Consortium SPV (as holding company of Newshelf), Newshelf (as issuer) and Grindrod Holdings (as subscriber) on August 1, 2019 in terms of which Grindrod Holdings subscribed for the Class C Preference Shares (“Class C Preference Share Subscription Agreement”).

Subsequently, on June 18, 2018, Grindrod Limited entered into a spin-off transaction (the “Spin-Off”), in which Grindrod Limited made a pro rata distribution of compulsorily convertible notes to its ordinary shareholders that, on conversion thereof, resulted in the ordinary shareholders of Grindrod Limited receiving the Issuer’s Ordinary Shares in the same proportion as they held their Grindrod Limited Shares immediately prior to the distribution.  As a result of the Spin-Off, Grindrod (SA) Pty Ltd. acquired 241,962 of the Issuer’s Ordinary Shares, of which it remains the record owner, and Newshelf acquired 1,600,000 of the Issuer’s Ordinary Shares.  Grindrod Limited and the Issuer currently have two overlapping members of their respective Board of Directors, Michael Hankinson and Pieter Uys, the former of which is the non-Executive Chairman of the Board of Directors of both companies, and the latter of which is a non-Executive Director of both companies.  In addition, Willem van Wyk, a non-Executive Director for Grindrod Limited, is currently serving as an alternate non-Executive Director to Pieter Uys’s non-Executive Director position at the Issuer.

The foregoing description of the Share Purchase Agreement included in this Schedule 13D does not purport to be complete and is qualified in its entirety by reference to the full text of the Share Purchase Agreement, which is incorporated by reference and filed as Exhibit 99.1 hereto.

The information set forth in Item 3 of this Statement is incorporated by reference into this Item 4.

The Reporting Person intends to review its investment in the Issuer on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the outcome of any discussions referenced above, the Issuer’s financial position and strategic direction, actions taken by the Board of Directors, price levels of the Ordinary Shares, other investment opportunities available to the Reporting Person, conditions in the securities market and general economic and industry conditions, take such actions with respect to their investment in the Issuer as they deem appropriate, including: (i) acquiring additional Ordinary Shares and/or other equity, other securities, or derivative or other instruments that are based upon or relate to the value of the Shares (collectively, “Securities”) in the open market or otherwise; (ii) disposing of any or all of their Securities in the open market or otherwise; or (iii) engaging in any hedging or similar transactions with respect to the Securities.

(a) and (b)

The aggregate percentage of Ordinary Shares reported as beneficially owned by the Reporting Person is based upon the 19,006,858 Ordinary Shares outstanding as of April 30, 2020, as disclosed in the Form 20-F filed by the Issuer with the SEC on June 5, 2020.  Grindrod Limited is the beneficial owner of 1,600,000 Ordinary Shares of which it is the record owner and may also be deemed to beneficially own an additional 241,962 Ordinary Shares held of record by its subsidiary, Grindrod (South Africa) Pty Ltd.

(c)

Except as set forth in this Statement, the Reporting Person has not engaged in any transaction in the Issuer’s Ordinary Shares during the 60-day period ended September 18, 2020.

(d)

Not applicable.

(e)

Not applicable.

The information set forth in Item 3 of this Statement is incorporated by reference into this Item 6.

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Dated:  September 18, 2020