February 10 - Lloyd Fonds, the shipping and property funds manager, seems set to realign its business as a listed shipping company.
The company reported that its board had approved a new business model that would see it becoming a holding company for a listed shipowning company.
Lloyd Fonds plans to inject 11 single shipowning entities through a non-cash equity offer in which limited partners would receive shares in Lloyd Fonds.
Some have suggested that the new model could provide a lifeline for shareholders in one-ship companies that have suffered from the collapse of the KG funding method.
Last spring ShippingWatch.dk quoted Lloyd Fonds ceo Torsten Teichert as stating that various German ship management companies faced losing ships and contracts when the shipping banks acted on their plans to divest loans on ships that were owned in collaboration with insolvent KG funds.
Teichert was reported to have said that most shipping companies in Germany get their profits from KG-owned ships, which for many of the companies account for close to 100 percent of their operated fleet, and when the expected recovery of the shipping markets begins within the next couple of years, the banks are going to divest these ships, which means that many ship management companies risk losing their profit base.
Assuming all the single ship companies accept the offer the non-cash equity offering would be valued at EUR162 million (USD183.8 million), which is in line with a valuers report on the 11 ships, which puts the combined value at EUR162.3 million.
Documentation offer will be sent to around 18,000 investors in the 11 companies, and they will then vote on it at the end of February.
If the offer is accepted it will create a fleet of six containerships of between 1,100 and 8,500 teu and five tankers, of which four are panamax tankers.
Teichert now says: "It is high time that investors in single-ship entities receive a viable perspective for their investment. Most ships are still feeling the strain of the shipping crisis. I am convinced that genuine fleet finance under the roof of a company such as Lloyd Fonds AG offers a far better outlook for the ships than the current single-ship entities."
The newly realigned Lloyd Fonds plans to use its stock market listing to acquire news ships in the future.
"Lloyd Fonds AG's position in the capital market is to be leveraged with the aim of assembling a modern and viable fleet generating a steady cash flow and to establish the share as a value proposition," Teichert added.
The implementation of Lloyd Fonds AG's new business model is to be approved at an extraordinary shareholder meeting in April following the approval of the investors in the single-ship entities and implemented by the end of the year.
A short film on the transaction including statements by Erck Rickmers, the founder of E.R. Schifffahrt, and Manfred Brenneisen, a member of the Management Board of Brenneisen Capital AG and of the advisory council of one of the 11 ship ownership entities, can be found at the company's website.
