UK – WORLDWIDE – London based vessel financier Magma Maritime says it is currently in advanced negotiations with potential investors to raise an initial amount of $200 million to purchase a number of modern dry bulk cargo vessels, which will have a tokenised ownership structure.

The company says this 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. Poseidon is an agreement between 17 leading banks which commits them to invest in sustainability and a more environmentally friendly approach when financing global shipping in line with the climate goals set out in the Paris Agreement and by the International Maritime Organization.

Magma says traditional finance is getting harder to obtain and its new offering is aimed at 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 will also be of interest to traditional financial institutions looking to refinance their existing debt exposure to this asset class. Andrew Graham, Chairman, Magma Maritime comments:

“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.”

Second-hand vessels purchased would be relatively new, 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 is part of the Magma Maritime team, he observed:

“The maritime industry is focusing 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.”

Source:handyshippingguide

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