"A first of its kind in shipping, and perhaps a first of its kind, period…" Ardmore's 2021 issuance of $40 million of 8.5% Series A funding was described as an "artistic transaction" by judges at this year's Marine Money's Deal of the Year Awards. Recognised as a "win-win-win" for all three parties involved, the transaction between Ardmore Shipping, Maritime Partners and Element 1 has clinched the title of Preferred Equity Deal of the Year.
Transactions in shipping generally follow a traditional format. Few deals are closed that involve three different parties, due to the exponential risk of disagreement around control, economics, and social issues. These challenges were overcome, however, in the makings of the deal between Ardmore Shipping, Maritime Partners and e1 Marine, with all three entities finding mutual synergy with the formation of e1 Marine, a clean energy technology company offering advanced methanol to hydrogen generation products supporting the fuel cell industry.
e1 Marine is a methanol-to-hydrogen technology company aiming to accelerate the energy transition by developing and providing access to hydrogen, as a future fuel, to the maritime industry. Maritime Partner's stake in the joint venture offers the potential to enhance its return on investment, but also grants it access to technology that could benefit the fleet of Jones Act tugboats, included in its portfolio.
The deal also aligns with Ardmore's Energy Transition Plan, with e1 representing massive potential in helping the shipping industry reduce emissions from onboard power generation for auxiliary power, primary propulsion, and stationary power applications.
"Our Energy Transition Plan encompasses three core pillars," said Mark Cameron, Ardmore's Chief Operating Officer, "Energy transition cargoes being the first, energy transition projects the second, and, finally, energy transition technologies. This third pillar advocates the crucial nature of collaboration in meeting transition goals. For example, working with technical and commercial partners to develop solutions to navigate the challenge of reducing emissions, including onboard energy efficiency technologies and future fuels. Our investment in e1 Marine epitomises our model for progress."
The deal was beneficial to e1 Marine, too. The clean tech company now has a strategic investor that will help them to both understand and penetrate the maritime market. Its increased valuation also makes it more appealing to investors in future funding rounds.
Commenting on the deal, Paul Tivnan, Ardmore Chief Financial Officer, added: "This deal forms part of our overall strategy and is a meaningful step forwards in terms of our sustainability objectives. The energy transition will be one of the greatest challenges in the history of the shipping industry, and it's clear that, to reach our goals, collaboration will be key - no one company or financier will be able to do this on their own.
We look forward to bringing our maritime and shipping expertise to revolutionise the nature of onboard and onshore power generation, and in turn decrease the emissions output of shipping as an industry. With this deal we are delighted to commence a relationship with Maritime Partners and look forward collaborating with them on the development of e1 Marine and as a financing partner to Ardmore".
To find out more about Ardmore's Energy Transition Plan, click here.