Taylor Maritime unveils IPO plans, targets 7 per cent yield
Taylor Maritime announced its plans to float on the London Stock Exchange and raise $250m.
Established in 2014, the company aims to invest in a diversified portfolio of vessels, mainly second hand Handysize and Supramax type ships.
Historically such vessels had demonstrated average annual yields of 7% and can be acquired at less than their long-term average prices.
"Robust demand for dry bulks, an all-time low supply of new build ships (as a percentage of the existing fleet) coinciding with low ship acquisition costs are presenting an outstanding entry point in the current cycle," Taylor Maritime chairman, Nicholas Lykiardopulo said.
"The Taylor Maritime team has a strong track record over 40 years with the right relationships and reputation to be able to capitalise on this opportunity and drive long term returns for investors."
The initial public offering would consist of an initial institutional placing and an offer for subscription for 250m new ordinary shares at $1.0 each.
Taylor Maritime's principals had ample experience in such transactions, having purchased and sold more than $1.3bn of such assets since 1987.
A seed portfolio of 23 Handysize and Supramax dry bulk vessels had already been assembled, to ensure that the funds raised via the IPO were invested promptly.
The company further pointed out that such vessels mainly carry "necessity" goods and how 90% of the world's trade volumes were still seaborne due to its cost-competitiveness and efficiency as a means of transport.
Initially, Taylor was aiming for an annual dividend yield of 7% - on the initial share price - paid quarterly.
Once fully invested, the goal was to achieve an annual total net asset value return of 10.0-12.0% over the medium to long term.