Tufton Oceanic Assets plans to convert its C shares into ordinary shares after moving swiftly to invest its second tranche of capital.
London-listed Tufton Assets raised $91m from its initial public offering in late 2017 and, after investing the proceeds, issued C shares in October to continue its expansion efforts.
It opted to issue C shares as the printing of extra common stock would have potentially dented its commitment for a 7% dividend yield, which was met in the third quarter, finance sources explain. They add this is a standard process for London-listed funds.
In a statement to investors today Tufton Assets said the move to convert comes following the investment of $68.5m, or around 90% of the proceeds from the C shares issue.
Tufton is following a pattern familiar to investors in the specialist fund segment of the London market and has the option to issue up to 200m common and or up to 200m fresh C shares up until September this year, according to its last prospectus.
Shipping industry sources say they would not be surprised if the company seeks further capital in the coming months at a time its growth is accelerating.
They believe the company will continue to target product tankers, a sector it entered in December with the purchase of three vessels, and feeder containerships, where it has established a strong position.
The C shares conversion is being planned now as Tufton no longer needs to ring fence the separate pools of equity to meet its dividend targets, sources explain.
Tufton Assets has been accelerating its growth efforts with its IPO capital invested in around seven months and the second tranche set to work in less than half of that time.
