The weather in Britain over May has been the wettest on record, the country got zero points in the Eurovision Song Contest and Brexit in trading terms so far is a disaster.
So morale is low in our sceptered isle and we need something beyond a reopening of pubs, successful Covid-19 vaccines and talk of a prime ministerial book on Shakespeare (I kid you not) to cheer us up.
Fortunately we have it, with the maritime world’s first major float on the London Stock Exchange for four years.
The initial public offering was officially timed for Thursday but success was already assured.
Taylor Maritime Investments (TMI) announced earlier in the week that investors had snapped up 253.7m shares at $1 a piece, in line with early hopes.
Hurray for TMI chief executive Ed Buttery! The bulk fleet operator has shown that there is life in shipping on the LSE.
So, will this open the door for more post-Brexit City of London shipping floats?
There has been plenty of stock market IPOs in recent weeks with equity prices flying high in post lockdown euphoria, low interest rates and growing world trade.
Over £5.6bn of new money — more than half of the £9.4bn raised in the whole of 2020 — was raised in wider IPOs across London in the first quarter of 2021 alone, according to financial services company EY.
Many of these have been in the tech stock or medical sector so a bit of hard metal offering like shipping is a bit different.
There is no doubt the float had been timed immaculately by financial advisor Jefferies.
Oven-ready deal
What better time to butter up (sorry for the pun) investors than in the middle of a freight rate boom as China and others restock?
The smaller ships are particularly benefiting from a wider demand surge that has propelled the Baltic Exchange indices upwards.
The IPO had been in the planning since before Covid-19 so it really was “oven ready”.
Is there anything otherwise really special about this float?
Big people around it. Ed Buttery is the son of shipping nobility as his father Chris co-founded Hong Kong-based handysize bulk operator Pacific Basin and then Epic Gas.
An IPO has novelty value here at this time whereas some New York investors are more jaded
Buttery senior remains a legendary dealmaker and Ed admits his father is on the phone “17 times a day” about TMI.
Taylor has also strong connections with Japanese shipowning groups — some of which have already sold tonnage to TMI.
Guernsey-registered TMI has already agreed to conditionally acquire a fleet of 23 handysize and supramax bulkers.
Ed Buttery and Jefferies have been punting the project to investors by aiming to reward them with a 7% dividend yield.
It starts with an initial promised payout of 1.75 cents per share pencilled in for October and trumpets that shipping is the “pillar of global trade”.
But the reality of this float is that it is a fairly bread-and-butter (sorry again) affair but comes just at exactly the right time.
Despite the marketing hype, TMI will succeed or fail — and meet its yield targets — depending on what the bulk market does in future.
The LSE was a good place to tap up investors because there is obviously a long maritime history in Britain and it remains a key maritime sector for shipping services.
A wider renaissance for London?
But an IPO has novelty value here at this time whereas some New York investors are more jaded having seen the price of many past bulker floats end up below the net asset value of the fleet.
It may be that some other shipowners will try to follow suit in a rising market but I do not expect a rush — and I do not see it as necessarily heralding a wider renaissance for London as a place to raise equity for shipping.
Meanwhile, the UK government has been talking up the possibility of a new yacht, the Britannia, being built for Queen Elizabeth.
InfraStrata, the owner of Appledore and Harland & Wolff yards, told the Daily Mirror newspaper this would “get British shipbuilding back on the road again”.
That seems as much wishful thinking as I my believing the latest weather forecasts that say Britain is just days away from a heatwave.
