What is the end of maritime finance?
A high barrier to entry for investors is often associated with the presence of considerable profits. John M. Hadjipateras, CEO of Infinity Maritime Commercial Shipping, argues that this situation has changed recently.
When some of the most powerful individuals in the marine sector got together with specialists from the banking and technology industries, Infinity Maritime was established. Because of the global financial crisis, the introduction of capital adequacy rules for marine loans, and the International Maritime Organization’s aim of net-zero carbon shipping by 2050, small and medium-sized operators are having a difficult time obtaining bank financing.
It is challenging to get financing for the maritime industry with popular Same Day Approval.
Additional financing has to be brought into the industry in order to hasten the development of innovative technologies that are more environmentally friendly. Additionally, as shown by the Poseidon Principles, a wide variety of investors, ranging from HNW individuals and family offices to institutions and private equity firms, are interested in environmental, social, and governance (ESG) investments.
“What are some ways that we may increase both the operator and commercial yield?”
In the past, maritime operators have often prospered despite a lack of openness, which may be detrimental to the interests of ship investors. Improved governance will be of assistance. A fundamental industrial paradigm that new technology firms are attempting to address is the lack of opaqueness in their operations and supply chains. The Sea Cargo Charter is working on improving both operational efficiency and the level of openness.
“What about the increasing obligations concerning ESG?”
The imperatives and goals of sustainability are not being met by the current state of propulsion technology. Consequently, there will be a rise in the amount invested as more practical alternatives to fossil fuels become accessible.
During the course of the conversation, a proposal was developed to advance the industry economically and sustainably by utilizing the developing technology of blockchain to simplify trading and make investing more accessible to more people. This would be done in comparison to other available options.
Infinity Maritime is the first platform to provide an alternative form of marine financing via the use of digital technology. This opens the door for fractional ownership of commercial ships such as tankers, bulkers, and box ships, which will help shape the future of maritime finance. Lloyd’s List has already put it in their list of the Top 10 developments for Ship Finance in 2020:
The value and profits of the fleet will be reflected in the MetaUnits that are easily sold and given to investors.
A sustainable fleet is one that consists of modern eco-type ships that have the highest possible ratings in terms of EEOI, CII, and GHG and that can guarantee revenues and residual values.
Trading liquidity will be offered by both internal and external strategies, as part of MetaUnit’s offering of liquidity.
Holders of MetaUnits are eligible to receive commissions from the secondary market (liquidity).
An impartial Portfolio Asset Board will choose competent and well-known managers and these managers will be evaluated in comparison to several industry standards, including those pertaining to ESG.
Because there is no bank debt, there is no obligation to repay it. Because there is no leverage, financial worries cannot prevent the vessel from operating.
As a direct response to the COVID19 pandemic as well as the ongoing global financial crisis, Infinity Maritime has started the construction of its first dry bulk platform. Because of the global financial crisis and the new banking limitations, there are now fewer funds available. Even Nevertheless, the recovery of the global economy has led to a rise in the need for bulk shipments, which the pandemic has caused. There is a growing need, but there is a limited tonnage of smaller boats, thus it’s possible that bulk and project cargo may begin to be transported by larger vessels.
The platform is now soliciting investments for its first boats, one of which is a dry bulk handysize completed in Japan in 2013 and with a projected return of 17.9 percent. The platform’s long-term goal is to build a fleet worth $2.5 billion over the next three years.
LR is in the service of Infinity’s dream.
LR will provide assistance to Infinity Maritime in selecting boats based on performance and emissions data, as was revealed back in August. LR will also assess its products against the market using its I4 Insight platform and its Maritime Decarbonization Hub, and it will future-proof existing rules.
Andy McKernan, LR’s Business Director for Maritime Performance Services, said that the company is thrilled to be collaborating with Infinity Maritime on the commercialization of this innovative new technology.