Last checked at 
28 Jul 2021 07:00
28 July 2021
Tufton Oceanic Assets Limited (The "Company")
Acquisition of Bulker and Divestment of Containership; ESG
The Board of Tufton Oceanic Assets Limited (ticker: SHIP.L) is pleased to announce:
Acquisition of Bulker
The Company has agreed to acquire an Ultramax Bulker, Idaho, for $21.4m. The vessel is being acquired at below depreciated replacement cost ("DRC") and is fuel efficient versus its peer group. The vessel is being acquired with the proceeds of the sale of the Containership Kale announced in early July.
It has a fixed rate time charter for fifteen to nineteen months producing an annual net yield (after fees and capex accrual) of approximately 21%.
Sale of Containership Citra
The Company has agreed to divest the Containership Citra for $33m. The realised net IRR will be 47%. Citra was acquired in December 2018 for $13.1m. This will be the Company's fifth divestment. Whilst the Company aims to hold its investments over the longer term, the Investment Manager will seek to realise investments where additional value can be generated for shareholders. Citra was acquired for 75% of DRC in 2018. It is being divested at over 170% of DRC.
The Investment Manager continues to identify an attractive pipeline of opportunities across a range of the Company's target sectors and expects to redeploy these proceeds promptly. Prospective investments include chemical or product tankers, bulkers, and one or more larger containerships with four to seven year charters already in place. The Company will announce a further update in due course.
Energy Saving Devices
The Bulker Laurel, which the Company agreed to acquire in May and which is already fuel efficient versus its peer group, will be fitted with energy saving devices ("ESDs") in August. The Ultramax Bulker Idaho will be fitted with ESDs in October. As mentioned in our recent webinar, we expect fuel efficiency to increase by approximately 10% and the ESDs to produce net IRRs of over 15%. ESDs will increasingly be fitted on the Company's vessels in 2022.
These transactions, together with the divestments announced in May and early July, demonstrate the Company's commitment to ESG and capital re-allocation. The latter is increasingly relevant given absolute and relative movements across and within the main shipping markets since 3Q20.
For further information, please contact:
Tufton Investment Management Ltd (Investment Manager) Andrew Hampson Paulo Almeida | +44 (0) 20 7518 6700 |
Singer Capital Markets James Maxwell, Alex Bond (Corporate Finance) Alan Geeves, James Waterlow, Sam Greatrex (Sales) | +44 (0) 20 7496 3000 |
Hudnall Capital LLP Andrew Cade | +44 (0) 20 7520 9085 |
About the Company
Tufton Oceanic Assets Limited invests in a diversified portfolio of secondhand commercial sea-going vessels with the objective of delivering strong cash flow and capital gains to investors. The Company's investment manager is Tufton Investment Management Ltd. The Company has raised a total of approximately $265m (gross) through its Initial Public Offering on the Specialist Fund Segment of the London Stock Exchange on 20 December 2017, a subsequent placing and offer in October 2018, a placing in March 2019, a placing in September 2019 and a tap issue in March 2021.