Seaspan announces order for ten 7,000-teu DF LNG containership newbuilds
Seaspan Corporation (“Seaspan”), a wholly owned subsidiary of Atlas Corp. (“Atlas”) (NYSE:ATCO), on July 6 announced that it has entered into long-term charters with ZIM Integrated Shipping Services Ltd. (“ZIM”) (NYSE: ZIM) relating to ten ultra-modern 7,000 TEU dual-fuel liquefied natural gas (LNG) containership newbuilds (the “LNG Containerships”). Seaspan will enter into agreements with a major shipyard to construct the LNG Containerships, which are anticipated to begin deliveries in the fourth quarter of 2023 and through 2024. The LNG Containerships are anticipated to be financed from existing liquidity, cash flow from operations, and additional borrowings.
Transaction highlights:
– Ten modern 7,000 TEU dual-fuel LNG vessels
– Aggregate purchase price of approximately $1.05 billion
– 12-year charters totalling approximately $1.8 billion of gross contracted cash flow
Management Commentary
Bing Chen, Chairman, President and CEO of Seaspan, commented, “We are very pleased to collaborate with ZIM on this forward-thinking project which provides advanced designs, competitive pricing and valuable deliveries. We see these modern 7,000 TEUs to be the natural successor to the aging global pool of conventional vessels in the 4,000 to 9,000 TEU range, where relatively little fleet renewal has taken place. We are experiencing strong customer interest for this vessel size.”
Graham Talbot, CFO of Seaspan, added, “We continue to execute on our growth plan in a prudent manner. In line with all of our vessel investments, we have de-risked the $1.05 billion capital expenditure associated with the dual-fuel LNG Containerships by signing long-term charters with a leading global liner representing approximately $1.8 billion of contracted cash flow. We intend to maintain balance sheet and risk management integrity while continuing the growth track that we have established over Seaspan’s 20-year history. We remain diligent on our path toward an investment grade credit rating, and operational scale will play an important role in this pursuit.”
Since December 2020, and including this announcement, Seaspan has announced 55 newbuild vessel orders and the acquisition of four second-hand vessels, all four of which have since been delivered.
About Atlas
Atlas is a leading global asset management company, differentiated by its position as a best-in-class owner and operator with a focus on deploying capital to create sustainable shareholder value. Atlas brings together an experienced asset management team with deep operational and capital allocation experience. We target long-term, risk adjusted returns across high-quality infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. Our two portfolio companies, Seaspan Corporation and APR Energy Ltd. are unique, industry-leading operating platforms in the global maritime and energy spaces, respectively.
About Seaspan
Seaspan is a leading independent owner and operator of containerships. We primarily charter our vessels on long-term, fixed-rate time charters to the world’s largest container shipping liners. At March 31, 2021, Seaspan’s fleet consisted of 127 containerships representing total capacity of approximately 1,073,200 TEU. Since then, we have announced the delivery of four second-hand vessels, increasing Seaspan’s operating fleet to 131 vessels and 1,120,200 TEU. We also have 55 vessels under construction, increasing total capacity to 1,854,200 TEU, on a fully delivered basis.
