Vitol and Grindrod have announced their decision to wind down Cockett, a company in which they hold equal shares. The move comes after extensive deliberation regarding the "non-core nature" of Cockett's business to both shareholders. The decision, while significant, is said to be aimed at ensuring an orderly and solvent closure of operations.

Cockett, jointly owned by Vitol and Grindrod since 2012, is reported to be in a stable financial position, capable of fulfilling all existing contractual obligations to suppliers and customers throughout the wind-down process. However, as of the announcement, Cockett will cease entering into any new business dealings. The shareholders have emphasised their commitment to a solvent wind-down, anticipating that all relevant suppliers will receive full payment within the next 60 days, in accordance with their supply contracts. Similarly, payments from customers are expected to be settled within the same timeframe.

The wind-down will be managed by Cockett's current leadership, including CEO Cem Saral and CFO Arnaud Payot. Vitol says it will provide support during this transition, leveraging its extensive relationships within the energy sector to aid in the orderly settlement of accounts. A dedicated team will remain to oversee the management of payables and receivables, ensuring a seamless conclusion to operations.

The shareholders expressed their gratitude towards Cockett's employees, acknowledging their professionalism and dedication over the years. It is noted that all staff will receive "considered and responsible compensation" as part of the wind-down process. Furthermore, Vitol and Grindrod thanked Cockett's suppliers and customers for their long-standing support over the past 45 years of trading.

This announcement marks a notable shift for both Vitol and Grindrod, who will redirect their focus towards core business strategies while concluding their involvement with Cockett.

Grindrod bunker profit small compared to core operations

For Grindrod, revenue and profit from marine fuels was not categorized as a core operation in its financial accounts. And even though marine fuel revenue of ZAR 16,043m (US$ 877.8m) in 2023 and ZAR 20,105m ($1,100m) in 2024 was significantly greater than revenue from core operations of ZAR 7,490m ($409.8m) and ZAR 7,371m ($403.3m) in 2023 and 2024, respectively, profit from bunkering activities was actually tiny in comparison.

Grindrod's profit before interest, taxation and non-trading items from marine fuels was only ZAR 46.941m ($2.568m) in 2023 and ZAR 32.170m ($1.760m) in 2024, whilst over the same period, profit from core operations (categorized separately from marine fuels) was ZAR 1,749m ($95.7m) and ZAR 1,296m ($70.9m) in 2023 and 2024, respectively.

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Vitol Bunkers

With the divestment of Cockett, which was primarily a bunker trading business, Vitol will be left to focus on its bunker supply operation, Vitol Bunkers.

The company arranges deliveries in Australia, Belgium, China, Maldives, Netherlands, Singapore, South Africa, Turkey, UAE and United States.