Griffin shareholders approve Grincor scheme

THE CONTINUED deterioration in the Asian economy with its adverse impact on shipping markets has been a major factor in Griffin Shipping Holdings' minority shareholders approving the proposed scheme whereby Grincor will acquire their shareholdings.
In exchange they will receive one Grincor 'N' share and 60 cents per Griffin share cash consideration. The fall in the value of the rand and the rise in South African interest rates were also cited as deciding factors.
In addressing scheme members Griffin chairman Murray Grindrod pointed out that contrary to losing all interest in Griffin, the scheme allowed shareholders, as a block, to retain 26% in Griffin and gain 26% of other Grincor assets.
Updated estimations of market value of the ships in the Griffin and Grincor fleets reveal that based on an exchange rate of R6 to the US dollar, both Griffin and Grincor shares would show a slight increase.
In US dollar terms the value of the fleet has declined by more than normal depreciation which reflects the worsening shipping market, says Grindrod. This makes it extremely difficult to find buyers who would pay anything like the sort of prices at which we would be prepared to let the ships go.
The board does not feel that it is in the shareholders' interests to recommend a disposal of the fleet at the bottom of the shipping cycle.
He emphasised that the majority of Griffin shareholders had invested in a shipping stock, and that by means of the scheme they remained invested in shipping stock.
The proposal, which is now subject to the sanction of the court at a hearing scheduled for July 20.