Singapore-listed Yangzijiang Financial has acquired stakes in two chemical tankers as it continues to grow its new maritime investment fund.
The company said it has acquired a stake in the 26,200-dwt RT Star (built 2011) for $19.5m and a stake in the 20,000-dwt Celsius Mayfair (built 2007) for $12.64m
The two ships were acquired in partnership with unnamed Shanghai and Singapore-based shipowners respectively, Yangzijiang Financial said.
The RT Star, which was previously owned by Nisshin Shipping is worth an estimated $24.3m, while the Celsius Mayfair (built 2007), whose previous owner was Celsius Shipping, is said to be worth $14.8m, according to VesselsValue.
Separately, Yangzijiang Financial said it has also entered into a co-chartering agreement for eight 50,000-dwt eco MR chemical and product tankers with an unnamed tanker charterer for a period of less than a year for each vessel. No financial terms were disclosed.
“This move is an optimistic bet on the future of the MR tanker market, which has consistently delivered good returns to owners since 2022,” the company said.
“The demand for crude oil tankers is expected to increase by 6.5% in 2023, while demand for product tankers is expected to grow by 9.1%.
“The overall demand outlook for 2024 and 2025 is also positive, with total tanker deadweight tonnage demand projected to increase by 4.9%.
“The combination of strong demand and tight supply is likely to support tanker charter rates in the coming years,” it added.
Yangzijiang Financial announced in August 2022 that it was setting up a new maritime investment fund with an initial capital of up to $250m.
The latest tanker project investments and co-chartering agreement take its deal-making to twelve ships following the acquisition of two MR tankers in March 2023.
Yangzijiang Financial said the fund now targets to have assets under management (AUM) of $600m and has currently secured capital commitments of $500m, $200m of which is from its parent company.
The company said the fund is working with other investors to secure the remaining $100m to hit the fund’s AUM target.
The fund aims to achieve an internal rate of return (IRR) of between 10% to 18% for its portfolio and as of 30 June 2023, the fund’s portfolio had achieved an IRR of 16.4% and a year-to-date return on equity of 17.7%.
“As the global economy recovers from the lingering effects of the Covid-19 pandemic, the limited supply of vessels and increasingly stringent environmental regulations in the shipping industry will continue to support newbuilding and second-hand investments,” Yangzijiang Financial said.
“In the meantime, although the most common mode of acquisition financing for ships has been the use of debt and equity, ship leasing has grown to become an important alternative over the past decade.
“With the global ship leasing market projected to expand at a significant pace over the next five years, the fund is strategically placed to offer an attractive, tailor-made leasing product, as well as develop as a highly sought-after financing partner, for both shipping and oil service companies,” it added.
