Honk Kong-based MR owner Parakou Tankers has merged with Nasdaq-listed Cambridge Capital Acquisition ahead of a significant fleet expansion.

Parakou currently operates a fleet of eight MR tankers, with letters of intent or discussions underway to expand its fleet by 20 vessels by 2017.

Cambridge is a "blank cheque" company, which launched an $80.5m IPO on in December 2013 with the intention of identifying a merger target in the transport sector. Parakou's expansion plans are to be funded by cash, some of Cambridge's $81.3m trust fund, and debt financing.

The owner's fleet of eight MR tankers is currently operating on charters between three and five years long, with an average time remaining of around 1.5 years.

Benjamin Gordon, ceo of Cambridge, commented, “We are extremely pleased to be investing in Parakou Tankers. Under Por Liu's leadership, the company is becoming a major force in the product tanker market.

“We believe this is a very attractive time to invest in the product tanker market, as demand for refined petroleum products continues to grow globally.”

Por Liu, ceo of Parakou, who stands to gain $58.5m from his 5.8m shares in Parakou, added, “We believe that joining forces with Cambridge will enable Parakou to realise both its near term and longer term growth objectives as a Nasdaq-listed company in the US. This is especially important in our industry, owning and operating a modern fleet of MR product tankers, which we believe has compelling long-term fundamentals.

"In addition, this merger affords us the ability to accelerate our growth at an opportune time as our industry is at an inflection point as evidenced by recent increasing rates.”