London-listed Tufton Oceanic Assets is raising more cash to add to its fleet, after snapping up an ultramax bulker.

The shipping fund said it continues to identify attractive secondhand vessels for acquisition.

Tufton is selling new shares in a tap issue at $1.18 each, representing a 2.1% discount to the company's closing price of $1.20 on 29 July and a 3.6% premium to net asset value of $1.15 on 30 June.

The company's brokers, Hudnall Capital and Singer Capital Markets, are joint bookrunners and the deal should close on 6 August.

Tufton can issue up to 10.53m shares worth $12.4m under authority granted by shareholders at its 2020 annual general meeting.

The full tranche would represent 3.8% of the issued capital, but a final amount is still to be determined.

Ultramax added

Tufton has also revealed it has bought an unnamed ultramax for $21.4m.

The ship is being acquired at below depreciated replacement cost and is fuel efficient versus its peer group, the company said.

The bulker comes with a fixed-rate time charter of 15 to 19 months, producing an annual net yield of 21%.

And further cash has been raised with the sale of a containership for $33m.

Brokers report this vessel as the 2,602-teu Cosmos (built 2006), which has gone to Mediterranean Shipping Co.

Tufton said the internal rate of return will be 47%.

Huge rise in price

The company bought the Cosmos for just $13.1m in December 2018.

The containership becomes the fifth vessel that Tufton has sold.

"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," the company said.

Prospective investments include chemical or product tankers, bulkers, and one or more larger containerships with four to seven-year charters already in place, Tufton added.

The new bulker addition, and another dry cargo vessel bought in May, will be fitted with energy saving devices this month and in October.

These unspecified devices will increasingly be fitted on the company's vessels in 2022, and should cut fuel consumption by 10%.

"These transactions...demonstrate the company's commitment to ESG and capital re-allocation," Tufton said, referring to environment, social and governance factors.

"The latter is increasingly relevant given absolute and relative movements across and within the main shipping markets since Q3 2020."