Seaspan Approaches Fleet Capacity Of 1 Million TEUs With Six New Container Ships

Seaspan Corporation (“Seaspan”) announced that it has agreed to purchase a fleet of six containerships (the “Acquired Vessels”) for approximately $380 million in cash.

The purchase of the Acquired Vessels is expected to be financed from additional borrowings as well as cash on hand. The closing of the acquisition is expected to occur in December 2019 and is subject to customary closing conditions.

Upon closing, the transaction is expected to be immediately accretive to Seaspan’s earnings per diluted share.

Fleet Growth

Subsequent to this acquisition, Seaspan’s global fleet approaches one million TEU, with a total pro forma fleet size of approximately 975,000 TEU1. Seaspan continues to be the market-leading independent charter owner and operator of containerships, with pro forma market share of approximately 7.7% of the global fleet2, as measured by TEU.

Top 10 Independent Containership Charter Owner/Operator by Fleet (TEU; in thousands)

Image Credits: CNW Group/Seaspan Corporation

The Acquired Vessels

The Acquired Vessels are comprised of three 10,700 TEU vessels built in 2012, two 9,200 TEU vessels built in 2013, and one 9,200 TEU vessel built in 2014. This adds a total of approximately 59,700 TEU. The Acquired Vessels currently operate under a long-term charter with a leading global liner. The delivery of the six vessels is expected in December 2019. Upon delivery of the Acquired Vessels, and one vessel previously announced, Seaspan’s total fleet will grow to 119 vessels (approximately 975,000 TEU).

Comments from Management

Bing Chen, President and Chief Executive Officer of Seaspan, commented, “This strategic transaction further demonstrates our core competency of allocating capital in a disciplined manner. Connecting this discipline with creative customer partnerships and proven operational excellence generates sustainable long-term value. This acquisition delivers a win-win outcome for one of our key financing partners, a key customer, and for Seaspan. Upon delivery of all vessels, we will grow our fleet to 119 vessels, and further cement Seaspan’s position as the leading global independent charter owner and operator of containerships. I’m proud of the Seaspan team for consistently leveraging our core competency in creating quality growth in container shipping and beyond. As consolidation continues to play out in the containership space, we’re well-positioned to capture great opportunities in the second-hand market and to pursue attractive new-build programs.”

Ryan Courson, Chief Financial Officer, added, “Over the last two years, we have demonstrated discipline through our capital allocation process. By focusing first on improving our balance sheet strength, liquidity and financing flexibility, we have positioned ourselves to execute on large scale, accretive transactions. This fleet acquisition of six high-quality vessels contributes substantial long-term value to our asset portfolio through significant incremental contracted cash flows, increasing Seaspan’s minimum future contracted revenue to approximately $4.2 billion. We will continue to remain disciplined in achieving our return objectives while maintaining the strength and flexibility of our balance sheet.”

Reference: seaspan.com

Source: Maritime Shipping News