Corporate Finance News, Hybrid Finance News

Vendredi 14 Février 2020

Tokenisation of ships: New scheme aims to be the first to offer tokenised ownership of ships in advanced talks to raise initial $200 million

The scheme would be the first to offer tokenised ownership of ships and a secondary market for trading the tokens. Ship owners targeted along with institutional investors looking to gain exposure to the shipping sector.

Magma Maritime will be the first platform to provide alternative finance through tokenisation, enabling fractional ownership of cargo ships, such as dry bulk carriers. The asset-backed tokens will be tradeable on a fully regulated exchange, resulting in a secondary market for token holdings. The platform will focus on creating a sustainable fleet via the purchase and upgrade of newer vessels, in line with the Poseidon Principles for sustainability.

The group is in advanced negotiations with potential investors to raise an initial amount of US$200 million to purchase a number of modern dry bulk cargo vessels, which will have a tokenised ownership structure.

The new offering is for ship owners who would like more manageable and more liquid shipping holdings and for institutional investors seeking direct exposure to the shipping market, but who don’t necessarily have technical knowledge. The offering is also of interest to traditional financial institutions looking to refinance their existing debt exposure to this asset class.

Second-hand vessels purchased would be relatively new and ideally no older than five years, and upgraded to achieve the highest sustainability rating in accordance with the Poseidon Principles. The shipping industry is having to adhere to tighter sustainability regulations, which means older ships are becoming less employable and have lower residual value. In using younger vessels there would be higher utilisation rates and more efficient fuel consumption.

John M Hadjipateras of John C Hadjipateras & Sons, one of the most respected shipping companies in London, is part of the Magma Maritime team, said: “The maritime industry is focussing more on sustainability in order to meet specified targets. This means greater use of younger more efficient vessels, and our new proposition would allow this to happen in a cost effective and efficient way.

“It also makes it easier for institutional investors to gain exposure to the maritime sector, diversifying their portfolios further with asset-backed tokens.”

Andrew Graham, Chairman, Magma Maritime said: “Now is the right time to try and launch the first tokenised finance proposition for the maritime industry. The concept is now much better understood, and access to finance in the maritime sector has become much harder to secure. In recent years the sector has seen a dramatic reduction in the number of banks offering ship finance, prompting a real need for a new financing approach. We believe a sustainable focus is now an imperative for the sector to thrive and Magma can help deliver this with token financed fleets.”

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