London-based Magma Maritime, controlled by John C Hadjipateras & Sons, is launching an alternative ship finance platform through tokenisation to enable fractional ownership of cargo ships.
According to the company, 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.
The company is in advanced negotiations with potential investors to raise an initial amount of $200m to purchase a number of modern dry bulk cargo vessels, which will have a tokenised ownership structure.
“The new offering is for shipowners 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 is also of interest to traditional financial institutions looking to refinance their existing debt exposure to this asset class,” Magma Maritime said in a release.
The company is looking for secondhand vessels no older than five years for potential investment.
“The maritime industry is focussing 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,” said John M Hadjipateras.
“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,” added Andrew Graham, chairman of Magma Maritime.
In January, Hamburg-based startup New Shore Invest also introduced a token-based ship financing platform after securing seed capital from NorthCape Capital in Oslo. The company plans to structure and arrange about three additional projects within 2020 after the launch of its first project in the first quarter.