The purchase of MV Energy in the summer of 2019 led to a successful opportunity investment. The interest in the MV Energy Opportunity Bonds and Participations showed that investors have confidence in opportunity projects based on container feeders. This is an additional reason for the shipping company to continue to be on the look-out for opportunities to acquire existing vessels in 2020 if all the conditions for a profitable investment project can be met.
Keen interest in opportunity investment
In July 2019, the bond loan was issued with the aim of funding half of the acquisition of a 750 TEU container feeder vessel, including bringing the vessel back from Asia and making it ready for service in Europe. The vessel was built in 2014 for approximately €15 million and could be purchased at the exceptionally low price of €1.7 million. After that, MV Energy Participations were put on the market. They were placed in a short space of time as well. The shipping company itself participated in the ‘equity capital’ of the MV Energy Scheepvaartbedrijf CV with €409,010. The vessel was transferred to this CV – limited partnership – on 9 August 2019. On 12 October, after an survey docking and various repairs, the vessel was chartered at a market-conform rate. Since then, operations have been proceeding in line with expectations.
New financing and investment models
The rapid placement of both the bonds and the participations indicates that there is interest in opportunity investments in the shipping industry and investors have confidence in JR Shipping’s course in this respect. The MV Energy project also indicates that innovative financing models in which investors fill the gap which is left behind by banks are practicable. The shipping group will continue to focus on these models.
Container feeder fleet
The set-up of the Container Fleet Fund CV, in which one single investment fund partner took over the eleven vessels from former JR Fleet Fund CV in early 2019, is perforrming in line with projections made operates. Their ambition to add additional vessels to this new fund was fulfilled when, later in 2019, four 1,436-TEU feeders were purchased. JR Shipping operates these vessels under the names of MV Essence, Escape, Esperance and Espoir. From 1 January 2020, the shipping group oversees the operation of 20 container feeder vessels, including the management contracts for vessels owned by third parties.
Offshore service vessels
In 2019, the SeaZip fleet comprised six offshore service vessels and one survey vessel. Although the results were better than in previous years, they were still insufficient, despite the fleet’s involvement in major offshore oil & gas and wind projects. For a significant part of the year, the survey vessel, SeaZip Fix, took part in a large scale search and recovery operation after a container vessel lost 300 containers in Dutch and German territorial waters north of the Wadden Islands.
Once again, 2020 will be a challenging year for the SeaZip offshore service vessels. In 2020, SeaZip focusses on innovative, international partnerships and the provision of a wide supply of specialist services. Offshore survey service is the main focus in this respect.
Both with regard to the container feeder market and the offshore energy market, the shipping group will continue to dedicate itself to the execution of management contracts for third parties. JR Ship Management, the flexible organisation ashore which provides all the necessary expert knowhow, is responsible for this. Besides that, the shipping group provides specialist support to third parties with regard to complicated restructuring and refinancing programmes as well as purchasing and sales processes.
Innovations in the shipping industry
In 2019, the global focus on the climate issue was rocketing. Add to that the nitrogen crisis in the Netherlands, which preyed on people’s minds and requires a great many sectors to exert themselves. The international shipping industry will take measures that are meant to help solve climate problems. Since June 2019, Dutch shipping companies have committed themselves to a Green Deal which is supposed to provide for a decrease in the CO2 emissions by 70 percent in 2050. This is 20 percent in excess of the climate targets set by the United Nations.
The formulated ambitions will greatly accelerate the technological innovation in the shipping industry. Throughout the world, experiments are being carried out in the field of more fuel-efficient and cleaner shipping operations. JR Shipping and SeaZip take a proactive stance in this process and, if possible, they participate in pilots. In early 2019, SeaZip offshore service vessels were actively involved in operations in the North Sea in the context of the Joint Industry Project Autonomous Shipping, which intends to set the course for autonomous operations of seagoing vessels. In 2019, JR Shipping also made a contribution to developing LISA, the world’s first Learning & Intelligence Support App for the shipping industry. In late 2019, the Dutch Ministry of Economic Affairs and Climate Policy rewarded this innovation by awarding a financial incentive.
Focus in 2020: safe, profitable and cleaner maritime shipping and innovative investment projects
Safe, profitable and cleaner maritime shipping activities are priority areas in the course followed in 2020. They include the provision of reliable, cost-effective services to industrial customers in the maritime container transport industry and the offshore energy sector and innovative projects and partnerships which constitute a sound foundation for investments in the maritime shipping industry. In 2020, we continue to set our sights on:
- operating 20 container feeder vessels
- operating 6 SeaZip offshore service vessels and one survey vessel
- operating vessels owned by third parties, including the Clipper Stad Amsterdam, a Tall Ship
- specialist services in the fields of ship financing, restructuring programmes and purchasing and sales processes
- the management of specialist offshore service operations – ranging from international consultancy to staffing