The Board of Taylor Maritime Investments Limited, the specialist dry bulk shipping company, is pleased to announce a proposed non pre-emptive placing of new ordinary shares in the capital of the Company (the "New Ordinary Shares") seeking to raise a target of US$75 million of gross proceeds (the "Placing") to be immediately used to acquire up to six Handysize vessels.
The New Ordinary Shares will be offered to institutional investors at a price of US$1.15 per New Ordinary Share (or the Sterling equivalent) (the "Issue Price"). The Issue Price represents a premium of 2.1% to the unaudited NAV of US$1.1263 per Ordinary Share as at 30 June 2021 announced today. Investors in the Placing will be entitled to receive the Company's dividend for the initial period ended 30 September 2021, expected to be 1.75 cents (or the Sterling equivalent) per Ordinary Share, to be declared in October 2021.
Edward Buttery, Chief Executive Officer, said:
"The Handysize segment is currently attractive with a strong charter market and demand. Drawing on our in-depth knowledge of the sector, we have an excellent pipeline of vessel acquisition targets priced below depreciated replacement cost and are well positioned to take advantage of these market conditions to deliver additional value to our shareholders."
Background to the Placing
On 5 July 2021, the Company published a trading update for the initial period to 30 June 2021 which noted the following:
· Net time charter rates up over 30% since 7 May 2021, the date of the Company's IPO prospectus (the "Prospectus")
· Portfolio valuation (25 vessels including those delivered and committed) up US$33.3 million (10.5%) as at 30 June 2021 over the aggregate vessel purchase price
· Delivered fleet (17 vessels as at 30 June 2021) yielding annualised unlevered gross cash yields of more than 20%
· Implied dividend cover on the delivered fleet of c.2.7 times which is expected to rise materially once the remaining eight vessels are delivered (two of which have since been delivered)
· Market rates strengthening faster than ship prices giving rise to attractive investment opportunities
The Company has today announced an unaudited NAV as at 30 June 2021 of US$1.1263 per Ordinary Share, an increase of c.15% since Initial Admission on 27 May 2021.
Given the opportunity that exists now to continue to acquire high quality vessels at attractive prices and take advantage of current charter rates generating annualized unlevered gross cash yields of more than 20%, the Company is seeking to raise a target of US$75 million of gross proceeds through the Placing to be immediately used to acquire up to six Handysize vessels from a wider near term pipeline of 14 vessels.
Each of the six vessels are Japanese built, with an average expected acquisition price of c.US$15 million, an average age in line with the Company's fleet average of 10.5 years and near term delivery dates. All vessels in the immediate pipeline are expected to be fixed on new charters in the run-up to their delivery, or shortly thereafter, and should benefit from the strong rate environment.
Certain members of the Board and of the Executive Team currently intend to participate in the Placing.
Benefits of the Placing
The Directors believe the issuance of New Ordinary Shares will have the following benefits for Shareholders:
· The additional capital raised will enable the Company to take advantage of current investment opportunities thereby capturing attractive market dynamics and further diversifying its Portfolio in terms of contract profile and duration;
· An increase in the market capitalisation of the Company should help to make the Company more attractive to a wider investor base;
· It is expected that the secondary market liquidity in the Ordinary Shares will be further enhanced as a result of a larger and more diversified shareholder base; and
· The Company's fixed running costs will be spread across a wider shareholder base, thereby reducing the ongoing costs ratio.
Further details of the Placing
The Placing is being conducted under the Company's existing Placing Programme in accordance with the Company's Prospectus. Terms used and not defined in this announcement have the meanings given in the Prospectus.
Jefferies International Limited ("Jefferies") is acting as sponsor, sole global co-ordinator, bookrunner and financial adviser to the Company in connection with the Placing. The Placing will be non-pre-emptive pursuant to the terms and conditions set out in the Prospectus and is expected to close no later than 3.00 pm on 23 July 2021 but may be closed earlier or later at the absolute discretion of Jefferies and the Company.
Application will be made to the Financial Conduct Authority and London Stock Exchange plc for the New Ordinary Shares to be issued pursuant to the Placing to be admitted to the premium segment of the Official List and to trading on the Main Market ("Admission"). It is expected that Admission will become effective, and dealings commence in respect of the New Ordinary Shares, at 8.00 a.m. on 28 July 2021.
The New Ordinary Shares issued pursuant to the Placing will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. Investors participating in the Placing will be entitled to receive the dividend relating to the initial period ending 30 September 2021 (expected to be 1.75 cents or the Sterling equivalent) which is expected to be declared in October 2021.
The Placing is not underwritten. The Placing may be scaled back by the Company for any reason, including where it is necessary to scale back allocations to ensure the Placing proceeds align with the Company's acquisition pipeline. Details of the number of New Ordinary Shares to be issued pursuant to the Placing will be determined by the Board (following consultation with Jefferies) and will be announced as soon as practicable after the close of the Placing. The Company will be able to increase the size of the Placing by re-allocating New Ordinary Shares from the Placing Programme to the Placing.
The Issue Price is US$1.15 per New Ordinary Share. Participants in the Placing may also elect to subscribe for New Ordinary Shares in Sterling at a price per Ordinary Share equal to the Issue Price at the Relevant Sterling Exchange Rate. The Relevant Sterling Exchange Rate and the Sterling equivalent issue price are not known as at the date of this announcement and will be notified by the Company through an RIS announcement prior to Admission. The Issue Price has been set by the Board following their assessment of market conditions. By choosing to participate in the Placing and by making an oral and legally binding offer to subscribe for New Ordinary Shares, investors will be deemed to have read and understood this Announcement and the Prospectus in their entirety and to be making such offer on the terms and subject to the conditions in the Prospectus, and to be providing the representations, warranties and acknowledgements contained therein.
