Germany's Reederei H Vogemann has set about raising $50m to help finance its handysize bulker newbuildings.
The Hamburg-based company will issue digital tokens to raise capital for two 40,000-dwt bulkers built in China.
The 134-year-old company is tapping into technology that makes it possible to divide equity in the ships into fractions, which can be bought and sold individually.
This process, known as tokenisation, involves splitting the equity portion of single-ship companies into tradable shares.
"We have always been open to new financing methods. A security token offering is the logical continuation of our financing strategy," managing partner Markus Lange said.
Vogemann said it will issue "green ship tokens" for a pair of handysize bulkers delivered in 2019.
The company is listed with two vessels matching this description: the 38,800-dwt Sea Eagle and 38,500-dwt Voge Sophie (both built 2019).
These were delivered from Taizhou Kouan Shipbuilding last year.
Novel financing
The issue of digital securities is relatively new form of financing in Germany.
To date, the only other company is understood to have been involved in issuing digital tokens is Hamburg-based New Shore Invest.
The firm is seeking to raise €3.13m ($3.4m) to help finance a fifth multipurpose ship ordered by Rhenus-Arkon-Shipinvest for €8.63m at Dayang Offshore Equipment Co.
Vogemann is hoping to raise substantially more by focusing on modern handysize bulker designs.
"The fleet is threatened with an extreme shortage, as a large number of these ships are too old, too uneconomical and therefore no longer competitive," said Patrick Schutze, managing director of Neofin Hamburg, which is handling the sale of digital securities.
Vogemann is offering to pay investors interest of 8%, plus an equal share of any profits.
Its prospectus was approved by the Liechtenstein Financial Market Authority (FMA) on 3 July.
Newbuilds
Vogemann may seek to expand the scheme to a series of up to eight 40,000-dwt bulkers commissioned at Yangzijiang Shipbuilding in China.
The first of those orders were placed towards the end of last year for two firm ships with three pairs of options.
These are being built to the Green Dolphin 40 design and are understood to be open-hatch units. They will cost between $23.5m and $24m each.
Yangzijiang is slated to deliver the firm ships in 2021.
Vogemann is focusing on growth in the handysize sector after selling a number of panamax and capesize bulkers in recent years.
The company — which is led by Lange and fellow managing director Jens-Michael Arndt — is one of Germany’s oldest shipping companies having been established in 1886.
"We are particularly targeting so-called 'Green Ships'. They offer the ideal combination of increased energy efficiency with reduced emission values," said Arndt.
"This not only makes them more environmentally friendly, but also ensures lower fuel costs and higher charter rates."
