- Home
- Investor Relations
- Investor FAQs
- Capital Structure
Capital Structure
If you have specific question which is not found in this FAQ, please email us at investors@firstshiplease.com
- What is FSL Trust's capital structure strategy?
- The Trustee-Manager's long-term objective in relation to capital management is to maintain a debt-to-equity ratio of about 1:1. The Trustee-Manager believes this is a prudent and conservative target, notwithstanding deviations in the short-term arising from timing differences in equity and debt capital raising for new vessel acquisitions.
At FSL Trust's IPO in March 2007, its capital structure was deliberately structured such that all the proceeds from the IPO were used to fund the acquisition of the initial portfolio of 13 vessels. This enabled FSL Trust to reserve its entire debt capacity for future growth and allowing the Trust to acquire 10 additional vessels post-IPO.
Moving forward, the trustee-manager intends to diversify the sources of debt funding and may supplement bank debt with debt from the international capital/bond markets. This would enable FSL Trust to maintain its competitive position in the industry and support stable and regular distributions to its unitholders.
- The Trustee-Manager's long-term objective in relation to capital management is to maintain a debt-to-equity ratio of about 1:1. The Trustee-Manager believes this is a prudent and conservative target, notwithstanding deviations in the short-term arising from timing differences in equity and debt capital raising for new vessel acquisitions.
- How will FSL Trust fund future acquisitions if it reaches its debt-to-equity target?
- FSL Trust's business model is predicated on regular access to the capital markets to fund growth or to pay down debt. When the debt-to-equity target is reached, FSL Trust will consider accessing the capital markets to raise further equity, to fund vessel acquisitions or to pay down debt. The trustee-manager is also constantly considering other capital management measures and funding options for future acquisitions.
TopImportant Notes:
These FAQs may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other companies, changes in operating expenses, trust expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events.