Notes to the Consolidated Financial Statements - Uni-Asia Finance ...

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12 Uni-Asia Finance Corporation Annual Report 2009 Our Business Maritime Investment/Management Investment in ships As part of our business model, we act as a co-investor, while providing financial services in relation to ship investment. The purpose of our investment is to aim for investment returns as a stable income stream and also to demonstrate our confidence and commitment to investors that we invite. Our current vessel investment portfolio comprises containerships, handy-size bulkers, and product tankers. As at 31 December 2009, the number of vessels we have invested in (including vessels before delivery) is 11, comprising 4 handy size dry bulk ships, 2 product tankers, and 5 containerships. This number has fallen from 14 a year ago, which was caused by our cancellation of the shipbuilding contracts of three handy size bulkers of 33,400 DWT (two of them are through our whollyowned subsidiaries) due to the shipbuilder’s financial difficulties. One dry bulk vessel and one containership were delivered in 2009 respectively. Among the 11 vessels, two vessels are before delivery. Type Capacity Type of Investment Vessel List Charter Period 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Charterer 1 Bulker (1) 32,700 DWT Ship Investment NYKGB Fund 2 Bulker (1) 28,300 DWT Co-investment MOL 3 Bulker (2) 37,300 DWT Co-investment * Delivery MOL Scheduled 4 Bulker (3) 29,200 DWT Co-investment NYKGB 5 Product Tanker (4) 47,094 DWT Ship Investment Fund 6 Product Tanker (4) 50,000 DWT Ship Investment Fund 7 Container (5) 3,500 TEU Ship Investment Fund 8 Container (5) 3,500 TEU Ship Investment Fund 9 Container (5) 3,500 TEU Ship Investment Fund * Delivery Scheduled TORM TORM Evergreen Evergreen Evergreen 10 Container (5) 4,300 TEU Co-investment Evergreen 11 Container (5) 4,300 TEU Co-investment Evergreen Legend: Before Delivery Charter Contract Owner’s swap option for charter contract between two tankers Shipyards: (1) Kanda (2) Imabari (3) Y-Nakanishi (4) Onomichi (5) Hyundai Mipo Product Tanker Containership Bulker
Realising A Sustainable Future 13 Our maritime investment portfolio is classified as i) investment with 100% ownership, ii) co-investment with other investors and iii) investment in ship investment fund. i) Investment in vessels with 100% ownership This is a transitional stage of investment until we invite other investors to join. When we find good investment opportunities, we will acquire vessels using our own equity investment without waiting for the establishment of a co-investment structure or ship investment fund. It is necessary for us to take a quick action in order to seize good opportunities that come our way. Fixing the charter contract will be done at the same time or immediately after the decision to acquire is made. This investment would be later changed to a co-investment or investment in ship investment fund to reduce our equity investment burden. In 2009, three vessels of such vessels were cancelled as explained and our 100% investment in a 4,300 TEU containership was changed to a co-investment with the entry of another investor. As a result, there are no vessels with us as sole investor as at 31 December 2009. ii) Co-investment with other investors Under our co-investment activity, we invest in the vessel owning company together with a few other investors. Our investment portion is usually not more than 50%, and we can diversify our investment portfolio by sharing the risk and reward of the investment with other investors. As at 31 December 2009, we have co-investment in 5 vessels among the total 11 vessels that we are investing and managing. While we foresee the continuous tight credit policy of financial institutions this year, we will focus more on such equity investment with less dependence on external borrowings. We will also consider to take majority interest, if necessary. iii) Investment in private ship investment fund The Akebono Fund was established in April 2007 by the Company together with other sponsors, taking advantage of the Approved Shipping Investment Enterprises status granted by Maritime & Port Authority of Singapore (“MPA”) under the Maritime Finance Incentive (“MFI”) scheme. Uni-Asia Capital (Singapore) Limited, a wholly owned subsidiary of UAF, was granted the status of Approved Shipping Investment Manager under MFI scheme, and acts as a ship investment manager. We are investing in 6 vessels through the Akebono fund. We had also established Searex Fund I & II, which were both private ship investment funds and they were already successfully closed by disposing their vessel portfolio. We are considering launching a new opportunity–driven ship investment fund, that invests in discounted vessels, with a focus on small handy bulk carriers. For future growth, we are also studying the possibilities of investment in different types of vessels where our business model is applied.
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Corporate Information BOARD OF DIRE
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Notes to the Consolidated Financial Statements - Uni-Asia Finance ...

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