What is FSL Trusts 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.
