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Last checked at 
16 May 2022 07:00
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) Andrew Hampson Paulo Almeida | +44 (0) 20 7518 6700 |
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Singer Capital Markets James Maxwell, Alex Bond (Corporate Finance) Alan Geeves, James Waterlow, Sam Greatrex (Sales) | +44 (0) 20 7496 3000 |
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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 $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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