Investment trust insider on Tufton Oceanic Assets (SHIP)
James Carthew: the novelty of ship funds bearing income
Tufton Oceanic Assets (SHIP) is not quite a year old, raising $91 million in its flotation last December to invest in vessels in the second-hand market. At the start of this month SHIP announced it was fully invested and looking to raise more money. Two weeks later we saw the launch of an initial public offer (IPO) for shares in Blue Ocean Maritime Income (BMAR). It is looking for $250 million which it intends to lend to vessel owners, operators and other maritime businesses.
SHIP has been busy building its portfolio and now owns seven vessels – four container ships, an LPG (liquified petroleum gas) carrier and a couple of handysize bulk carriers (up to 40,000 tonne boats carrying goods such as grain, timber and minerals).
The container ships were built between 2006 and 2009 and have been chartered under ‘time charters’, or contracts, that are expected to run until 2021/2022. SHIP is responsible for insuring and maintaining these vessels. The basis of the contract for the LPG carrier is different, however. This is provided on a ‘bareboat charter’ where SHIP provides the vessel and the charterer takes on responsibility for insuring and maintaining it. This is expected to run until 2025. One of the handysize bulk carriers operates in the spot market – transporting cargoes at prevailing market rates. The other is let on a time charter.
SHIP has just started paying dividends, with a 1.5 cent payment announced in July and quarterly payments planned hereafter. The target for 2019 is a 7% yield … read more here
SHIP : Investment trust insider on Tufton Oceanic Assets (SHIP)