How HSBC UK went the extra nautical mile for Shoreham Port

For over 260 years, Shoreham Port has operated as a Trust Port, aiming to shape and maintain the Port for the benefit of all stakeholders. Shoreham Port CEO Tom Willis describes the organisation as “fiercely commercial”, but the key difference to a normal business is the profits are continually reinvested to enable improvement and growth.

“We compete with other ports for cargoes and other organisations in areas like commercial property, but as a Trust, our profits benefit everyone by creating economic growth within the locality,” he says.

This structure makes Shoreham Port a vital part of the community, as profits are reinvested to create jobs and opportunities. But it also means that the Port’s operations and accounts can seem unusual to those who aren’t familiar with this structure.

An additional complicating factor is the diversity of the organisation. On the marine side, the Port handles about two million tonnes of cargo a year, predominately timber and steel for the construction sector. It’s also the third largest fishing port in the country, landing about 9,000 tonnes of fish a year, and it has around 15,000 leisure movements annually. On land, Shoreham Port is a big commercial property organisation, with over 175 tenants across small to medium sized businesses.

“When you look at our balance sheet, it looks very different to a standard commercial business,” says Willis. “So one of the key things we needed from a funding partner when we went to market was someone who could understand that, and the fact that the Trust Port structure presents opportunities as well.”

Shoreham had several legacy debt facilities on different terms that it was seeking to consolidate. The Port also wanted to secure additional funding for five critical projects, including building a further commercial property and improving the cargo terminals to increase cargo handling capacity. And finally, the Port wanted an ongoing facility to be able to respond quickly to future opportunities.

After speaking with a wide range of potential funders, Shoreham Port secured an eight-figure package with HSBC UK to consolidate its existing facilities and fund future growth. HSBC UK took the time to fully understand the Port, its structure and diverse business lines. The bank was also able to sustainably-link the facilities to the Port’s environmental targets on waste and emission reduction, as well as its regional economic objectives for training development and educational placements.

“HSBC had their relationship manager out with some of our teams doing beach cleans on a Saturday,” said Willis. “That sort of thing is really important to us, we are a community focused organisation and we wanted to work with a partner that would connect with our objectives. When we had the relationship manager and his family helping clean the beach of litter, we knew we had found the right partner for us.”

HSBC UK’s strong understanding of the infrastructure sector and its relationships with other large ports nationally and internationally helped the bank to quickly get to grips with Shoreham and see the value in its operations.

“A Trust Port is quite a different dynamic, but we found educating ourselves on that a really useful exercise,” said John Fitzpatrick, Relationship Director with HSBC UK. “When we looked across our portfolio and comparables in the marketplace, there simply weren’t any. But we just thought, well, how are we going to put the structure together to fit their funding requirements and ours?”

It was this proactive approach to funding that really attracted Shoreham Port to HSBC UK as a partner. HSBC UK offered a proposition that was a hybrid of a traditional commercial and real estate facilities with a revolving credit facility which gives them room for growth.

“As a global trade bank, ports and shipping are a key part of infrastructure expertise,” says Euan McLeod, Head of Infrastructure, Energy & Project Finance at HSBC UK. “We were delighted to be able to provide the support needed to enrich the development and investment into all aspects of the Port.”

As a certified EcoPort, HSBC UK immediately saw the opportunity to link the funding to sustainable goals as well, which was a unique proposition for Shoreham.

“From the outset, HSBC offered an opportunity to work towards sustainable KPIs, which challenge our organisation to do more on sustainability through financial incentives,” says Willis.

“We’re a very sustainable organisation anyway, but we worked with the HSBC sustainability team to introduce stretching yet achievable KPIs. I think that really cemented the partnership for us, we’re both pulling in the right direction.”

The Port is also part of the Shoreham Port Green Energy Hub development, which is a consortium of businesses collaborating to launch a green hydrogen production facility at the Port. While not directly linked at this stage, both HSBC UK and Shoreham see a potential opportunity to bring HSBC UK into that agreement in future.

“The project has the potential to make a significant impact in decarbonising the whole of southeast England, if we can get it moving,” said Willlis. “It’s a great opportunity to continue the partnership with HSBC and other organisations to make a real contribution to net zero.”

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