Questions and Answers-Investing in Tank Containers

1. Why should I invest in tank containers and how much should I invest?

This is an attractive vehicle if you are seeking to augment your existing portfolio by investing in a currency hedge investment.
Up to 20% of your investment portfolio.

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2. What are the main benefits of an investment in a tank container?

Locally funded investment.
Off-shore based asset.
No limitation on the number of containers that may be purchased.
Rental earned in a basket of currencies is converted to dollars.
All earnings can be retained off-shore and freely dealt with, provided that the tank is registered in the name of a private individual.
Tax efficient (depreciation allowed).
Finance costs are tax deductible.
A hedge against Rand depreciation.
Beneficial to the South African economy.

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3. What am I really buying?

An investment in world trade.
International currency exposure.
A diversification of your asset base.
An expected rental income flow for 20 years and more.

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4. Am I able to finance part or all of the container cost?

Yes, Al Baraka Bank offers a wide range of gearing alternatives that
can be tailor-made
Gearing facilities are available subject to normal credit approval. Depending upon the investor's personal tax situation, gearing the investment may result in the effective after tax return being higher

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5. What is the expected life span of my container

Approximately 20 years. However according to the manufacturers, a container will last in excess of 20 years provided it is properly maintained.

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6. If I wish to sell my investment at any time, will there be a demand

A tank container can be sold at any time. Demand for second hand tank is, and has been, very strong for a number of years. The benefit for the purchaser is that the investment will already be working in the Islamic pool of tanks and rental will accrue from the date of purchase. Tank containers in this pool are designated by the special prefix to its serial number, TMIU (Trifleet Muslim Investor Unit). Once your written instruction to sell has been received, Intertank would market the container on your behalf and assist you with the legal documentation when a buyer has been found.

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7. How do I know that my tank container exist?

Each container is allocated three different numbers, i.e. Identity Number, an Operational Number which is linked to the lease manager who will be managing your container and an International Certification Number issued by on of the certification bureaus such as Lloyds, Bureau Veritas, etc. The Identity Number is stamped onto the container body in various places, and contains the prefix unique to the Islamic pool, TMIU
You will receive a certified copy of the ownership Certificate as the original is lodged with Intertank's Certificate as the original is lodged with Intertank's bankers as agents for the exchange control department of the South African Reserve Bank.

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8. How much can I expect to pay for this investment?

The price of the investment is market-related and is reflected on the investment application form.

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9. Are there any additional costs in respect of shipping, railage, and transport?

No. The purchase price includes all costs pertaining to the positioning of your tank in the world market.

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10. Is there a danger that the market can become saturated?

Stainless steel tank containers are replacing traditional means of transportation that are systematically being phased out internationally.
Current population of tank containers is estimated to grow by 10% per annum.
Growth opportunities are expected in the US market, the Eastern European markets, as well as the Pacific Rim countries.

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11. Who manages my container for me?

When you decide to purchase a tank container investment, Intertank will prepare all the legal documentation relating to the purchase of the container.
In terms of the Agency Agreement, you will appoint Intertank as your management agent.
International Tank Containers (UK) Ltd, a UK-based company, has agreements with various lease managers who will ultimately manage your container.

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12. Is my container maintained and, if so, who is responsible for the

Containers are maintained according to strict international
specifications and regulations.
The lease managers, operators and users ,maintain the tank containers on behalf of and under the direction of Intertank.
Stringent expectations are carried out on a regular basis. Th ultimate effect of these provisions is that tank containers have an expected life span in excess of 20 years.

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13. What can I expect to pay for the management of my tank container?

The overseas lease managers' fees currently range between 15% and 20% of gross rental earned from the leasing of the pool of containers.
Intertank's management fee is fixed at 5% of the gross rental income

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14. What happens if my tank container is destroyed or damaged while

Your tanker is comprehensively insured for repair or replacement.
Your rental will not be affected, as you will continue to earn income
from your share of the Islamic pool.

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15. Who are Intertank's auditors?

The international auditors are Deloitte and Touche and the local auditors are Pricewaterhouse Coopers Incorporated.

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16. Who regulates the tank container investment industry?

The Exchange Control Department of the South African Reserve Bank and the South African Tank Container Association.

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17. What happens to my container after, say, 20 years?

At the end of their useful life (undetermined at this point) tank containers are sold as static vessels for the value of the stainless steel at that time.

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