African Bank offers $28.3 million for Grindrod property assets

Omokolade Ajayi -
Key Points
  • African Bank plans to acquire key loans and property assets from Grindrod's GFS Holdings to strengthen its asset base.
  • The acquisition, pending regulatory approval, will include loans, property stakes, and mortgage bonds on KwaZulu-Natal's North Coast.
  • Grindrod aims to streamline by divesting non-core assets, using sale proceeds to boost logistics and freight services expansion.

African Bank Limited, led by South African executive Kennedy Bungane, has announced a $28.3 million (R500 million) offer to acquire key property assets from GFS Holdings, a subsidiary of Grindrod Limited.

The acquisition is part of African Bank’s strategy to diversify and bolster its asset base, while Grindrod aims to streamline its operations by divesting non-core assets.

The proposed deal, announced on Oct. 22, 2024, includes the purchase of loans and assets on South Africa's KwaZulu-Natal North Coast.

Once regulatory approvals are secured, the transaction will be finalized five business days after clearance, with an expected closure date of Dec. 31, 2024.

Grindrod to focus on core operations

For Grindrod, the sale aligns with its strategy to concentrate on logistics and freight services. The proceeds from the transaction will strengthen Grindrod’s balance sheet and support its core expansion efforts.

The assets African Bank intends to acquire include loans to the Royal Shaka Property Group, Selwa Trust, and Ushukela Milling.

Additionally, the bank will gain a 19-percent stake in two property developers — Trevally Group and Sherpa Trade — along with mortgage bonds and profit-sharing agreements linked to future developments in the region.

African Bank’s strategic growth under Kennedy Bungane

Kennedy Bungane’s leadership has driven rapid expansion at African Bank, with active customers growing from 1.54 million in 2022 to 3.97 million by Sept. 30, 2023, fueled by new business and alliance banking initiatives.

The planned acquisition is expected to complement African Bank’s growing portfolio, giving it a strategic foothold on the KwaZulu-Natal North Coast and access to diversified revenue streams.

It will build on African Bank’s earlier purchase of Grindrod Bank’s assets, reinforcing its commitment to expansion and diversification in South Africa’s financial sector.