Grit’s Standard Bank-led refinancing will help fund Club Med in Senegal

Seven existing debt facilities have been converted into a new loan and revolving credit facility for up to $306m. The transaction covers Grit’s assets and debt facilities in Mauritius, Mozambique, Zambia, Ghana and Senegal. The transaction is due to be finalised by the end of October.

Standard Bank, Nedbank and Absa have rolled over their previous loans into the new facility, with Standard Bank, the largest debt provider, being the lead arranger and bookrunner. Bank of China, previously a lender to Grit, chose to exit with the three South African banks taking over its exposure of $76m, Veenhuis says.

Grit is listed on the London and Mauritius stock exchanges. In 2019 the company bought the Cap Skirring luxury hotel in Senegal from Club Med and leased it back to the seller. The capacity of the Club Med assets will close to double as they are modernised in a development which has been delayed by Covid-19, Veenhuis says. The work will be carried out in the off-season periods starting in February 2023 and February 2024, with completion expected at the end of 2024, he says.

• The refinancing, Veenhuis says, may be a “stepping stone” towards a corporate bond sale in three or four years’ time.
• The cross-collateralisation of the debt across different jurisdictions uses a model which could be employed when the current facilities expire, he says.

Stretch for the sky

The transaction was presented as part of the company’s attempts to meet ESG targets. No one could accuse Grit of shooting for the moon. The company, which counts TotalEnergies and BP among its tenants, aims to cut carbon emissions by 25% by 2025.

That only applies to Grit’s operations and the emissions from its tenanted buildings. No one is going to be turned away for being an oil producer. The point about oil companies is that they produce oil – not that they might run a relatively clean office.

Veenhuis also said that a target of having 45% of leadership roles filled by women is already being met. So the “ESG target” is to maintain the current ratio of women leaders by finding more women as needed. An employee at Grit or any other company who said at their evaluation that they were setting targets for themselves which they are already meeting would be invited to stretch themselves a little more.

Veenhuis said that women leaders will still need to be found in future as the current ones leave. He said that the difficulties of keeping the level at 45% “should not be underestimated”. Why a quote for women is needed in this day and age is anyone’s guess. Why does it matter if Grit’s share of women as leaders is 40% in one year and 60% in the next?

Gender diversity is the easiest and cheapest kind of diversity to achieve.

• There is every chance that women can do a management job at least as well as men. A company that promotes qualified women is taking no additional risk and incurring no extra cost. It should happen anyway without ESG brownie points being awarded.
• The danger is that types of discrimination which are harder to address, such as those based on race, class, religion, disability or sexuality, are hidden by the feel-good factor of promoting highly educated and competent women.

Bottom line

Grit needs to set new targets if it wants serious ESG credentials.