area2invest talked to Patrick Schütze, Managing Director of neoFIN GmbH, about impact investing and the Green Ship Token as a green deal.
What is the Vogemann Green Ship Token?
The Vogemann Green Ship Token is the first digital security in the field of sustainable bulk shipping, issued by the Hamburg shipping company Vogemann. To be more precise: the token embodies qualified subordinated profit participation rights. The created capital will be used to purchase bulk carriers with their own board cranes, a type of ship which is particularly flexible and can be used almost anywhere due to its size and equipment. Bulkers transport raw materials such as grain, fertilisers, coal, ores, minerals as well as steel and forest products – goods that form the basis for the things we need every day. Bulkers handle almost half of the world’s sea transport.
The total emission volume of the Green Deal is 50 million US dollars (USD). Institutional and private investors can participate from USD 1,000. The securities prospectus of the Green Ship Token was approved for publication by the FMA Financial Supervisory Authority Liechtenstein on 3 July 2020.
The interest rate is 8% p.a. and there is also a 50/50 profit sharing between investors and issuer, as far as the economic success of the issuer allows. What does this mean in plain language? If more profit is generated, the plus is shared. Even if 12% is generated, this means 2% more interest for both investors and Vogemann. From a business perspective, it is quite clear that the management will do its utmost to achieve this. Because only then will it become really interesting!
Tell us more about the Vogemann shipping company and the idea behind the Security Token Offering
I have known the Vogemann shipping company for many years, but these are only a fraction of its history. It was founded in 1886, a company with a long tradition. During these years a great mutual trust has developed. If anyone knows how bulk shipping works, it is the Vogemann team. This is also due to the fact that Vogemann combines the shipping company, its own brokerage and various service companies under one roof. In other words: not only our own fleet is chartered out, but also a large number of other ships. The resulting market knowledge and the tightly wired network are unique. It is not for nothing that Vogemann is the only German participant to supply its panel broker data for the Baltic Dry Index (BDI) at the Baltic Exchange in London.
When neoFIN Hamburg’s plans for the first STO became concrete, I was quickly able to talk to the managing partners of the Vogemann shipping company, Mr Arndt and Mr Lange, about it. And although I had numerous other discussions with other possible issuers, including even other shipping companies, it was soon clear to me: they should be the ones. This consistent sustainable approach, which is not only being sought but is already being used, convinced me. My love of the sea probably also plays a role in this, I myself once went to sea. The passion for ships has never left me again.
Why is the Green Ship Token a Green Deal?
There are different aspects to it. The main one is certainly CO2 emissions, which are the subject of much public debate and which will be penalised from 2021 onwards under the national CO2 emissions trading scheme. Shipping is also an industry that is often criticised for its emissions, which are significantly lower than those of other means of transport such as aeroplanes, trucks or freight transport. Vogemann is already well ahead in this respect:
Worldwide there are currently exactly two Handysize bulkers that already meet the CO2 emission requirements of the International Maritime Organisation (IMO), which are not binding until 2029. We are talking about a CO2 reduction of over 30%. Both are new buildings from Vogemann.
But green shipping has even more sides to it. It is also about avoiding other greenhouse gases, sulphur emissions, careful use of ballast water and, in general, fuel and energy efficiency. Here too Vogemann is already setting standards today. The ships put into service by Vogemann in recent years consume between 30 and 50% less fuel than “non-eco” ships. With the Green Ship Token investors can therefore directly support the expansion of the modern fleet and contribute to stopping climate change. And the deal is clear – 8% interest p.a. and the 50% profit-sharing, see above, is a good deal.
How do you assess the trend of impact investing?
In one word: great! I’ve been involved in the field of capital investments for a long time, including products in the field of renewable energies or forest investments. For many years, sustainable financial investments had the reputation that their returns were not attractive. This perception has now completely changed.
And impact investing goes one step further, because this is about sustainability in a very broad sense. If impact investing becomes more firmly anchored in the minds of investors, we can look forward to a better world. I am a family man myself and therefore have a vested interest in ensuring that our planet continues to exist for a long time to come. And as you can see, the returns in impact investing are not a hiding place, they are doing wonderfully.
What opportunities do you see for the investment industry through blockchain technology?
I see immeasurable potential here. Tokenised assets are developing globally into a serious alternative to traditional investment vehicles and represent a paradigm shift. The breaking up of existing structures, the reduction of intermediaries and the enormous cost advantages over the classic securitisation of securities represent a quantum leap in the capital market. Digitisation of investment products is more than just putting the sales prospectus as a PDF file on the Internet.
Incidentally, my entry into blockchain technology came via crypto currencies. I followed the development closely from the very beginning and quickly became interested in the technology behind it. Through the mining we then designed the first capital investments and followed the scene very closely. By the time the legal requirements for STOs were finally met, we were ready to start.
What developments are taking place in the field of ship financing?
We see an interesting trend here. Ship financing is still a challenge due to its history. The classic ship investment is now burnt and dead.
But with sustainable ships such as the Green Dolphins, the interest on the part of banks and institutional investors is gigantic. This applies not only to credit financing offers, from which we can virtually choose, but also to private placements. The combination of environmentally friendly + indispensable for global supply is simply terrific and is being well received. And that’s a good thing, because we need ships like the Green Dolphins – and courageous medium-sized companies like the Vogemann shipping company, which even as a company with a long tradition wants to go in completely new directions.
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