Apicorp sets up $150m petro shipping fund
Dubai, February 25, 2013
Arab Petroleum Investments Corporation (Apicorp), a Saudi-based multilateral bank owned by the Arab states, has announced the establishment of a landmark $150 million fund aimed at leveraging growth opportunities in the petroleum product tanker charter market.
The Apicorp Petroleum Shipping Fund is the first investment fund to be established by bank, in which the UAE owns a 17 per cent stake. It is also the first fund in the region aimed at a specific vessel category.
The fund is co-managed by Tufton Oceanic, a leading global fund manager in the maritime and energy-related industries, and has acquired five medium range (MR) petroleum product tankers.
These will be employed in the regional and international tanker market for five years to help meet the projected upsurge in demand for petroleum product carriers.
Apicorp CEO and GM Ahmad Bin Hamad Al Nuaimi said the fund is a $150 million Shariah-compliant fund aimed at helping oil and gas companies grow their business while also generating regular yield and returns for the equity investors.
"In this case, the fund helps companies meet their requirements for petroleum products transportation without burdening their balance sheets. At the same time, the fund provides a mechanism for regional investors to participate in a highly-specialized investment class in international marine assets that is not normally open to them," he explained.
Al Nuaimi pointed out that the new fund supported Apicorp’s strategic objectives of diversifying its business streams into new midstream sectors as well as tapping promising new growth avenues in the industry.
"We are exploring the development of similar new funds in shipping and other oil and gas sectors to take advantage of further such growth opportunities. Tufton Oceanic’s strong capabilities in managing funds and deep knowledge of the global shipping sector make it the ideal partner for this Fund," he stated.
"Our partnership with them brings the required technical expertise to the region in investing and managing investment funds focused on shipping assets,” he added.
Tufton Oceanic is regulated by the Dubai Financial Services Authority (DFSA) in the region and has strong relationships with regional institutions built over 30 years.
Apicorp and Tufton Oceanic also served as joint co-ordinators for arranging debt funding for the Shipping Fund from Standard Chartered, SMBC, Riyad Bank and Natixis.
Standard Chartered and Natixis acted as the agent bank and the documentation agent respectively for the debt.
“The Shariah-compliant fund manages a total of $150 million fully underwritten by Apicorp, of which 70 per cent is composed of debt and 30 per cent equity provided by Apicorp and Tufton Oceanic,” said Al Nuaimi.
Tufton Oceanic is a pre-eminent fund manager for investors in the maritime, energy-related and wider global transportation and infrastructure sectors with innovative, solution oriented investment advisory services.
“The positive outlook for demand growth in the global product tanker market creates the right conditions for the success of the fund," remarked Marcus Machin, the director of Tufton Oceanic.
"The growth of rapidly industrializing mega-economies like China and India is expected to drive volumes of seaborne petroleum products in the next few years. Combined with changes in trade patterns, this is expected to lift product carrier demand growth above general global economic activity in the coming years," he added.-TradeArabia News Service