Interest in London initial public offerings is growing, but it remains to be seen whether shipping companies will join the queue in the UK capital.
Over the past decade or more, only Tufton Oceanic Assets and Taylor Maritime Investments (TMI) have pulled off the trick among shipowners.
Axel Kalinowski, London Stock Exchange (LSE)'s head of central and southern Europe, believes London is a global financial centre with an "incredible" amount of capital waiting to be deployed.
He told a Norton Rose Fulbright shipping IPO conference that investors in the city are very outward looking, unlike some in the US and Japan, for example.
Kalinowski describes the LSE as "pro-business with proven integrity".
There is also a flexible regulatory regime, whereas the US framework is more rules-based, he added.
Flexible friends?
Richard Sheen, NRF corporate partner and head of funds and asset management, said the LSE's different boards allow companies to "think outside the box".
A standard listing dispenses with the main board requirement for three years of trading history for 75% of a company's assets, he said.
This rule can be tricky for a shipowner who has just bought a lot of ships, Sheen added.
The lawyer said capital markets are buoyant, with positive trade winds behind IPOs.
And rules are changing at the LSE, he added. The main board free float requirement is to be cut from 25% to 10%, while dual share structures could be interesting for family-owned operations.
IPOs can be tough
"The mood music is very good, but IPOs can be a tough deal," Sheen said.
"It is still a lengthy process — five to six months for a main board listing — and it involves an awful lot of work. It is something to be taken very seriously."
Kalinowski said that it is an exciting time.
"The pipeline is very strong," he said, although if he knew of any upcoming shipping listings, he was not saying.
But Kalinowski added that 2020 was a record year for follow-on offerings by listed companies, and 2021 has seen a backlog of IPOs coming to market after being shifted from last year due to the pandemic.
New companies trading up
A total of 76 listings have been completed in London so far this year, with the weighted average share price gains of those companies standing at 26%, with TMI above this on 38%.
Ed Buttery, chief executive of TMI, said the cost of listing an investment trust in the UK is extremely competitive.
The bulker owner had looked at listing in New York, but Buttery said that after 10 years of shipping companies trading at discounts to net asset values, a lot of sophisticated, experienced shipping investors did not like the sector.
Nor did they believe in the world needing another shipping story, while some had previously had their fingers burned by the industry, he added.
Buttery said the LSE presented "this fantastic opportunity" for TMI.
