Funding VLCC Newbuilds: Bruton Ltd
Let’s say you ordered a pair of newbuilding dual-fuel Very Large Crude Carriers (VLCCs). How would you fund their construction costs?
Here’s a blueprint:
Establish a new corporate structure.
Call up your favorite shipyard to place the order.
Raise capital from friends and family to cover the first construction installments.
List your shares on a public stock exchange via an investment bank.
Set the reference price for those shares materially higher than what you paid for them.
Let the share price appreciate because of your strong following in the market and very limited free float.
Sell additional shares to the public at a discount to the prevailing stock price–still higher than what you paid originally–to help fund the remaining construction installments to the shipyard.
This strategy provides a ton of optionality and most likely ensures that the project sponsor won’t lose money on the initial investment.
For example, let’s examine Bruton Ltd, sponsored by one of today’s top shipping dealmakers, Tor Olav Trøim:
Bruton Ltd was incorporated in July 2023.
Also in July 2023, Bruton placed the order for two VLCCs at New Times Shipyard in China.
Friends, including shipbroker supremo Richard Fulford-Smith, prolific shipping investor Magnus Halvorsen, and businesswoman and heiress Celina Midelfart, contributed to private capital raises in October 2023 and January 2024.
ABG Sundial Collier coordinated Bruton’s share listing on the Euronext Growth Oslo in November 2024.
The reference price for the shares was set at NOK 33 per share—about a 47% mark-up to what the original investors (step 3) paid for the shares.
New investor demand pushed the share price up to NOK 37 on very limited share volume (representing a 67% paper gain to the original investors in step 3).
In September 2025, Bruton will owe $14 million to the shipyard but only has $4 million in cash. Bruton could issue new shares at a discount without erasing the founding shareholders’ initial gains, given the shares’ inflated valuation.
Not everyone can pull this strategy off, but Tor Olav Trøim can.
