Pacific Shipping Trust will invest US$1bn to buy ships in the coming three years, which implies an investment of US$300m a year, says its trustee-manager PST Management.

Captain Subhangshu Dutt, Chief Executive of PST Management, told ci-online in an interview that PST would very much like to diversify its fleet from containerships to other types of vessel and acquire ships from owners beside Pacific International Lines, its IPO sponsor.

"This could give investors more confidence," he said.

PST currently has an initial portfolio of eight 900-3,000 teu vessels bought from PIL, which have been leased back to the liner operator for eight to 10 years.

However, Captain Dutt said the firm was not in talks with any box carrier at the moment.

"But we've received enquiries on the sale and lease back arrangement for [a number of] 1,500-4,000 teu ships. The size suits us, as anything larger than that would be very expensive,"

Captain Dutt suggested that the downturn in the container shipping market worked well for the trust.

As the revenues of shipping lines are squeezed, carriers will be more likely to look for sale-and-lease-back arrangements to lighten their balance sheets, he explained.

He also mentioned that the administration structure of the trust delayed their decision-making process by a few days, compared with other buyers, but this would not be a disadvantage as the negotiations of such sale-and-lease-back deal would be lengthy and would allow more time for buyers to conclude the deal.

He admitted that the very high yield requirement of the trust, 9% for the first listing year and 9.5% for the second year, restricted their investment decisions.

"We have to be selective," he said.

Captain Dutt added, "A single ship deal will be easier [to attain the required return]."

He explained that this is part of the reason that the coming acquisition deals would more likely be for bulk carriers and tankers.

The trust tends to look for panamax and handymax bulkers, but a capesize bulk carrier backed by a solid charter would also be considered, according to Captain Dutt.

Captain Dutt said the trust is also open to buying offshore vessels such as anchor handlers, vessels that lay anchors for oil rigs.

"We have received enquiries on that too," He said.

Adding that the preferable charter period for panamax containerships would be 15-20 years, while for tankers and bulk carriers, it would be around seven years.

Pacific Shipping Trust announced its Q4 results today that it would distribute 1.04 US cents per unit for the fourth quarter last year, exceeding its IPO projection of an annualised yield of 9%.