Grindrod Limited, the JSE listed freight logistics company, is pleased to announce that the Competition Commission last week approved the transaction to acquire the majority shareholding in RACEC Group Limited, the AltX-listed engineering services group. This follows the joint announcement in July 2013 stating that Grindrod intended to acquire the entire issued share capital of RACEC, other than 25.1% held by black empowerment group Solethu Civils Holdings Pty Ltd, and would then delist RACEC.
The consideration amounts to 20 cents per share, totaling R27 138 573.
Grindrod has since 2005 been engaged in the rail sector in Africa and has significantly expanded its rail service offerings and significantly increased the scale of its existing operations.
RACEC, an industry leader in rail track engineering and construction complements Grindrod’s current service offering which includes locomotive & wagon manufacture or refurbishment; locomotive leasing & maintenance and rail operations and presents synergies in respect of track maintenance and signaling contracts.
“The last few months have been challenging for RACEC due to contract disputes and cash flow pressures. With an extended service offering and the financial backing of our new shareholder, we look forward to expanding our client base and growing our business,” said RACEC CEO Gary Harrod
The historic under investment in rail, together with the proliferation of large mining projects, supported by general economic growth, has provided a favourable environment for growth in the rail sector in Africa.
“This acquisition, supports Grindrod’s Africa growth strategy to invest in strategic infrastructure assets along development corridors connecting commodities, countries and clients across Africa,” Said Dave Rennie, CEO Grindrod Freight Services – Port, Terminals and Rail.