Tufton Oceanic Asset - Further Capital Re-Allocation

Tufton Assets

16/05/2022 07:00

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RNS Number : 5145L  Tufton Oceanic Assets Ltd.  16 May 2022

16 May 2022

 

Tufton Oceanic Assets Limited (The "Company")

Further Capital Re-Allocation

 

The Board of Tufton Oceanic Assets Limited (ticker: SHIP.L) is pleased to
announce two divestments and one acquisition that further improve the
Company's emissions intensity, yield, upside potential and inflation
protection.

 

Divestment of One Bulker

We have agreed to divest the Handysize Bulker Lavender for $17.7m, or 115% of
Depreciated Replacement Cost ("DRC"). The realised net IRR will be c.50% and
realised net MOIC will be c.1.8x. The Company acquired Lavender in October
2020 for $10.6m. The Lavender was the oldest Handysize Bulker in our portfolio
and will be the Company's eleventh 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.

 

Divestment of Penultimate Containership

We have agreed to divest the Containership Parrot for $31.0m. This was a
successful investment, achieving our target IRR of 12%, but is being divested
because in an inflationary environment it is expected to underperform the rest
of our portfolio. Parrot had a fixed exit value in 2025 while in the meantime
being exposed to operating cost inflation. This divestment will leave the
Company with only one Containership accounting for 5% of NAV, compared to a
peak exposure to Containerships of 42% of NAV in mid-2021.

 

Acquisition of One Bulker

We have agreed to acquire a Handysize Bulker for $26.3m. Like its sistership
Masterful which recently joined our portfolio, it is being acquired slightly
above DRC but the strong cash flows from its charter will significantly
de-risk the investment. The vessel has a fixed rate time charter of four to
six months producing a net yield of c.27%. Built in 2015, it is five years
younger than Lavender and in the top quartile of fuel efficiency in its market
segment. Nonetheless it will be evaluated for further improvement, including
the retrofit of energy saving devices.

 

Market Update

In recent months, the product and chemical tanker markets have improved
materially. This is expected to increase the yields from our two chemical
tankers with partial market exposure and the asset values of our nine tankers
which were valued at end 1Q22 at an average of 73% of DRC.

 

The Investment Manager continues to identify an attractive pipeline of
opportunities across a range of the Company's target sectors. Prospective
investments include chemical and product tankers as well as bulkers. The
Company will announce a further update in due course.

 

 

For further information, please contact:

 

 Tufton Investment Management Ltd (Investment Manager)                  +44 (0) 20 7518 6700

 Andrew Hampson

 Paulo Almeida

 Singer Capital Markets                                                +44 (0) 20 7496 3000

 James Maxwell, Alex Bond (Corporate Finance)

 Alan Geeves, James Waterlow, Sam Greatrex (Sales)

 Hudnall Capital LLP                                                     +44 (0) 20 7520 9085

 Andrew Cade

 

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
$316.5m (gross) through its Initial Public Offering on the Specialist Fund
Segment of the London Stock Exchange on 20 December 2017 and subsequent
capital raises.

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