12 January 2016
International law firm Watson Farley & Williams (“WFW”) has advised TIME Investments (“TIME”) on the formation of a new investment offering that will allow investors to acquire second-hand dry bulk vessels at historically low costs and capitalise on a considerable increase in rates, which TIME expects to see over the next three to five years. The new fund will operate under the Government’s Enterprise Investment Scheme (“EIS”) and is the first such public offering focussing on the maritime industry.
The EIS, which was introduced in 1994 is designed to encourage investment into early stage companies in industries that the Government has identified as vital to the wider UK economy. TIME: EIS has initial capacity for up to £20 million in total across four tranches, which will each use funds raised to acquire second hand dry bulk vessels with the aim of cashing out after a minimum of three years and securing a 27% return. Investors also realise an initial 30% in income tax relief under the EIS scheme alongside the ability to defer capital gains tax liabilities and exempt the investment from inheritance tax after two years.
Utilising its expertise in the maritime sector, WFW advised TIME Investments on risks involved in the shipping sector, the establishment of an advisory board and asset manager agreements. The WFW team was led by London Maritime partner Toby Royal, with Corporate senior associate Daniel Saunders.
Toby Royal commented: “This fund is a genuine ‘first’ in the maritime industry so we are very pleased to have been able to provide TIME Investments with the benefits of our industry expertise in the establishment of the dry bulk shipping investment opportunity. Should there be significant investor uptake it may lead the way for more such funds in the future.”