Taylor Maritime Investments has announced plans to float on the London Stock Exchange in an initial public offering (IPO) looking to raise $250m.
The target issue is made up of 250 million new ordinary shares at an initial issue price of $1 per share.
The new trust, which was incorporated in Guernsey on 31 March, will invest in a diversified portfolio of vessels, primarily second-hand geared ships.
According to the firm, "these vessels have historically demonstrated average yields in excess of 7% per annum and are capable of being acquired at valuations that are expected to be below long-term average prices".
The executive team in charge of the trust is led by Edward Buttery, CEO of Taylor Maritime Investments, based in Hong Kong and London, and has long-standing experience of investing in shipping assets.
The trust will initially target an annual dividend yield of 7%, paid quarterly. It expects to announce its first dividend of 1.75 cents per share in October 2021.
Once the assets are fully invested, the trust will target a total NAV return of 10% to 12% per annum, net of fees and expenses, over the medium to long term. In addition, the trust's aggregate borrowing will not exceed 25% of gross assets.
The annual costs for the trust, excluding any incentive awards, are not expected to exceed around 1.2% of NAV.
A seed portfolio for the trust has already been established, consisting of 23 vessels, with the expectation that the net proceeds from the IPO will be fully committed shortly after admission.
Nicholas Lykiardopulo, chairman of Taylor Maritime Investments, said: "Taylor Maritime Investments will offer investors an excellent opportunity to invest in a diverse portfolio of Handysize and Supramax dry bulk ships which will deliver attractive, immediate cash flows and the potential for capital growth at a time when the fundamentals for the asset class are compelling.
"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.
"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."
CEO Buttery added: "We are delighted to confirm our intention to list on the London Stock Exchange and pleased to have been able to assemble a high-quality seed portfolio that will ensure efficient deployment of IPO proceeds at attractive prices.
"Our internal management structure ensures we are fully aligned with investors with no external management, performance or acquisition fees, whilst our long-term ungeared capital structure will support sustainable returns for investors over the long term."
The prospectus for the new trust is expected to be published in early May.