shipping Archives - Shard Credit Partners

Shard Credit Partners’ Investee Company JST Completes Transformational Acquisition

Posted on 9th January 20259th January 2025 by abigailscott

On 24^th December, 2024, JST Ports & Logistics Holdings Ltd (“JST”) completed the acquisition of the rail-handling and logistics company, RFS Works Ltd (“RFS”), for an enterprise value of £18.3 million from Aggregate Industries UK Ltd and GRS Roadstone Group Ltd.

RFS, headquartered in Harlow, Essex, is a leading provider of integrated services for bulk material handling, logistics, earthworks and heavy mobile equipment solutions, primarily focused on the rail transportation sector.

JST, based in Ayr, Scotland and operating throughout the UK, is an independent port handling specialist in the bulks and general cargo sectors, utilising its specialised fleet of mobile cranes and materials handling equipment.

The combination of the RFS and JST businesses will create the leading, independent, UK ports and rail logistics specialist with circa 200 employees, a materials handing fleet comprising more than 100 large machines, and combined annual revenues approaching £40 million.

This landmark transaction marks the second strategic add-on acquisition since the primary MBI of JST by Richard Jennings, backed by Shard Credit Partners Ltd, in December 2020. In 2024, JST was awarded a King’s Award for Enterprise, for Innovation.

Both RFS and JST have histories dating back over 30-years and have developed unique and industry-leading positions in their respective sectors during this time. Whilst RFS has historically focused on the bulk aggregates and construction materials sectors, JST serves a diverse base of customers handling a wide range of commodities including aggregates, timber, steel, agri-bulks, general bulks, recycling and alternative fuels. The newly merged company will have the capability to offer uniquely integrated ports and rail materials handling, transportation and logistics services across the UK and Ireland. Aggregate Industries and GRS will continue to work closely with RFS going forward.

Richard Jennings, CEO of JST said, “The acquisition and merger of JST with RFS is a deal that has been a long time in the making. The strategic fit and opportunity to drive real synergies on multiple fronts represents an exciting opportunity to enhance the overall service offering to all our customers and drive operating efficiencies. We have been working closely with the senior leadership team at RFS and look forward to strengthening ties and building a market-leading business together in the coming months”.

Alastair Brown, Founder and CEO of Shard Credit Partners Ltd commented, “we are delighted to have been able to support Richard and his team in delivering this transformative acquisition and look forward to assisting in the integration of RFS with JST to drive significant value creation for our fund investors”.

JST is majority-owned by alternative investment fund manager Shard Credit Partners Ltd, through its UK SME direct lending strategy and current CEO, Richard Jennings, both having invested through an MBI in December 2020.

JST was advised on the acquisition by Newcastle-based RG Corporate Finance, with a team led by partner Carl Swansbury, supported by CF director Alex Simpson and CF manager Sam Shield. JST received legal advice from Gateley, led by banking and finance partner Andrew Madden with Rebecca Mills and M&A advisory partner Oliver Harker supported by George de Stacpoole. Gateley also produced the legal due diligence report. Hickman Shearer undertook technical due diligence. Financial and tax due diligence was undertaken by Azets. AIUK and GRS Roadstone received legal advice from Addleshaw Goddard. Working capital and asset-based financing was arranged by Specialist Asset Finance Ltd via Cynergy Business Finance Ltd, who were advised by Shoosmiths, led by Natalie Barnes.

About Shard Credit Partners:

Shard Credit Partners is an alternative investment fund adviser focused on high cash yielding private credit strategies in the UK lower mid-market. Current assets under management is circa £200 million. Its funds seek to generate superior risk-adjusted returns from conservatively structured senior secured credit investments with meaningful equity upside. Fund strategies include corporate direct lending, technology venture financing and international trade finance.

Shard Credit Partners successfully completed eleven primary investments and around thirty bolt-on acquisitions from its debut direct lending fund Shard Credit Partners Fund I, which held a first close in October 2017 at £90.2 million. Shard Credit Partners plans to hold a first close on its second vintage UK lower mid-market direct lending fund with a target of £250 million during Q4 2025.

Shard Credit Partners invests in small to medium sized businesses with strong management teams, supporting them by providing transformative growth capital and event driven financing in support of innovation, growth and expansion. The Fund invests in businesses across all sectors and throughout the UK. The firm has a strong ESG focus; in particular, it is a strong supporter of female entrepreneurs and firms with meaningful female leadership, ownership and senior management.

Shard Credit Partners Ltd is an Appointed Representative of Shard Capital AIFM LLP, authorised and regulated by the FCA (FRN 615463).

Contact details:

Shard Credit Partners

Investor relations: IR@shardcreditpartners.com

Business: info@shardcreditpartners.com

Website: www.shardcreditpartners.com

Understanding Trade Finance & Its Impact on Global Markets

Posted on 15th March 202415th March 2024 by abigailscott

Chris Ash, Head of Trade Finance at Shard Credit Partners joins Bill Blain, Market Strategist for Shard Capital on this week’s edition of the Shard Capital Podcast to discuss the recent disruption in the Red Sea, and the impact it is having on global trade routes.

The duo evaluate how various factors influence consumer prices and trade finance investments, providing insight into the resilience and adaptability of global shipping markets, and the specific returns generated by trade finance funds.

Listen in on the conversation below 👇🏼

Recorded 14th March 2024

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Trade Finance, an asset class to help you navigate today’s choppy seas

Posted on 8th March 20248th March 2024 by abigailscott

Container Ship passing through the Suez Canal

Approximately 12% of global trade , valued at over $1 trillion, passes through the Suez Canal. In the case of Europe/Asia specific trades, this figure rises to 40%. The canal has long been a vital artery for world trade, saving significant time and distance, particularly for goods traveling between East Asia and Western Europe. According to Egypt’s Suez Canal Authority (“SCA”), the waterway hosts 50 vessels a day, carrying between $3 to 9 billion worth of cargo combined. 28% of these vessels are large container ships carrying up to 20,000 containers each.

The importance of the Suez Canal was highlighted in 2021 when the Ever Given blocked the canal for six days causing extensive delays for over 400 vessels and necessitating lengthy detours around the Cape for many others. Presently, due to ongoing geopolitical events in the West Bank and retaliatory actions by Yemen’s Houthi rebels, delays of up to four weeks are being experienced, leading to significant increase in container rates for vessels that would typically transit the canal. Shipping lines are compelled to opt for the longer route around the Cape of Good Hope.

Fortunately, the shipping industry’s significant overcapacity following the Covid-19 pandemic has helped alleviate the current situation to some extent. However, prolonged tensions in Gaza could result in potential shortages, particularly for consumer goods reliant on shorter transit times. Whilst the timing of the Chinese New Year has mitigated some impact, a shortage of empty shipping containers, which caused a sharp increase in freight rates during the pandemic, has yet to materialise. Nonetheless, the rapid rise in container rates is likely to exert inflationary pressure on goods prices if the situation persists.

Goods with lower profit margins, dependent on competitive container prices, are particularly susceptible to short term price fluctuations. Despite these challenges, traders have become more resilient in the post-pandemic era. The long-term outlook for shipping is that over-capacity will remain a significant factor through 2024 and 2025 in dictating normalised shipping rates, whilst economies around the world make the slow climb out of recession. ING Research sights 27% of additional capacity coming on stream during this period, whilst scrapping is running at only 6.25% of new vessels. Over-capacity has recently been mitigated by “slow-steaming”, the process of operating a container ship significantly under their maximum speed. However, there is considerable availability nonetheless. The current spike in container rates being experienced is wholly event driven and an extreme dislocation of the base trends. The current increase in rates is wholly disproportionate to the actual economic cost of elongated transit times, and as the Pandemic experience demonstrated, rates crashed down very quickly, falling by as much as 90% from their Covid-19 peak.

At Shard Credit Partners (“SCRP”) Trade Finance, we stand by our clients during these challenging times, offering extended tenors on trades adversely affected by current events. Only a handful of trades were impacted. Our trading lines of credit are designed for flexibility, allowing us and our clients to adapt swiftly to changing circumstances and mitigate risks before shipment. The container rates on our trades are set before SCRP engages in a transaction, so if the economics of the trade do not stack up, the Trade Finance team do not enter into the transaction. Furthermore, we ensure goods are insured for 110% of their value against piracy or loss, and regular interaction with counterparties helps manage risks for all stakeholders involved in the trades we finance.

Through SCRP’s robust and flexible investment approach, we:

Generate market leading risk adjusted returns which are not correlated to world events
Deliver a diversified and dynamic portfolio of trades across jurisdiction, tenor and sector
Offer downside protection by being extremely adaptive to micro and macro-economic factors due to the short tenor and nature of transactions, and the uncommitted nature of the facilities offered
Share our deep knowledge and insights on one of the oldest forms of finance

Chris Ash Head of Trade Finance comments:

“SCRP’s dynamic Trade Finance Offering is well placed to meet the ever-changing landscape that our clients face. We pride ourselves in being able to support and advise businesses on trading securely, regardless of the challenges which may be encountered. Trade always finds a way despite headwinds, and following the pandemic, is more robust than ever before. The short term nature of trade finance makes the asset class extremely responsive to world events, and offers a very secure investment opportunity when compared to other forms of finance.”

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