Seaspan to purchase a fleet of six containerships on long-term charter for $380 million
Seaspan Corporation ("Seaspan") (NYSE:SSW) says 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.
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.
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 long-term charter with a leading global liner. 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).
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."
About Seaspan
Seaspan is a leading independent charter owner and operator of containerships with industry leading ship management services. We charter our vessels primarily pursuant to long-term, fixed-rate, time charters to the world's largest container shipping liners. Seaspan's fleet consists of 119 containerships, including seven vessels the Company has agreed to purchase, which have not yet been delivered, representing total capacity of more than 975,000 TEU. Seaspan's current operating fleet of 112 vessels has an average age of approximately seven years and an average remaining lease period of approximately four years, on a TEU-weighted basis.
