The Board of Tufton Oceanic Assets Limited announced that the Company has agreed to acquire a Product Tanker for $31.5m.
The Product Tanker, Marvelous, is being acquired at approximately 90% of depreciated replacement cost. Initially the vessel will be employed in a leading product tanker pool where current net unlevered yield is in excess of 25%. We anticipate that the yield will remain above 20% over the next 1-2 years during which time we will decide if a longer term fixed rate charter is more appropriate. Completion of the acquisition is expected by early July.
Similarly to the Product Tanker Exceptional, which the Company acquired at the end of 2021, Marvelous is in the top quartile of fuel efficiency in its market segment but will nonetheless be evaluated for further improvement, including the retrofit of energy saving devices. Marvelous is being acquired at only a slightly higher valuation multiple than Exceptional.
The investment follows earlier announcements regarding capital re-allocation, ESG priorities and the recent strong improvement in the product and chemical tanker markets. Following this acquisition and previously announced divestments and acquisitions, the Company will be fully invested.
