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DOHA: The Arab Petroleum Investments Corporation (Apicorp), the multilateral development bank owned by the Organisation of Arab Petroleum Exporting Countries (OAPEC) yesterday announced the establishment of Apicorp Petroleum Shipping Fund.
The landmark $150m fund is aimed at leveraging growth opportunities in the petroleum product tanker charter market. The government of Qatar owns a 10 percent stake in Apicorp.
The first investment fund to be established by Apicorp, the initiative is also the first fund in the region aimed at a specific vessel category. The Fund has acquired five medium range 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.
The fund is co-managed by Tufton Oceanic, a leading global fund manager in the maritime and energy-related industries.
Apicorp CEO and GM Ahmad bin Hamad Al Nuaimi said: “Apicorp Petroleum Shipping Fund is a $150m 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 specialised investment class in international marine assets that is not normally open to them.
“The new Fund supports 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. Our partnership with them brings the required technical expertise to the region in investing and managing investment funds focused on shipping assets.”
Tufton Oceanic is regulated by the Dubai Financial Services Authority in the region and has strong relationships with regional institutions built over 30 years.
Apicorp and Tufton Oceanic also served as joint coordinators 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 fund is fully underwritten by Apicorp, of which 70 percent is composed of debt and 30 percent equity provided by Apicorp and Tufton Oceanic,” Al Nuaimi said.
Marcus Machin, Director, Tufton Oceanic said: “The positive outlook for demand growth in the global product tanker market creates the right conditions for the success of the Fund. 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.” The Peninsula