Seaspan Approaches Fleet Capacity Of 1 Million TEUs With Six New Container Ships
An agreement for the purchase of a fleet of six containerships for about $380 million in cash has been announced by Seaspan Corporation.
Additional borrowing and cash on hand will be used in order to finance the purchase of the acquired vessels. It is estimated that the acquisition will close in December 2019 and is also subject to customary closing conditions.
Soon after the closing, it is estimated that the transaction will be accretive to the earnings per diluted share of Seaspan.
After the acquisition, the global fleet of Seaspan will be closer to one million TEU with a complete pro forma fleet size of about 975,000 TEU1. Seaspan will still be the top independent charter owner and operator of containerships in the world market with a pro forma market share of about 7.7% of the global fleet when measured by TEU.
Related: Largest Container Ships In The World
The Acquired Vessels
The fleet will include three 2012 built 10,700 TEU vessels, two 2013 built 9,200 TEU vessels and one 2014 built 9,200 TEU vessels. This will total up to about 59,700 TEU. The Acquired Vessels are presently being operated under a long term charter by a major global liner. It is estimated that the vessels will be delivered in December this year. The fleet of Seaspan will grow to 119 vessels after getting the delivery of the acquired vessels and one vessel about which the announcement was made earlier.
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.”