Seaspan signs US$160m deal with AP Moller-Maersk for 4 vessels
SEASPAN Corporation has signed contracts to buy four 4,800-TEU vessels from AP Moller-Maersk (APM) at a total cost of US$160 million, according to a company statement.
The purchase of the ships from the world's largest container shipping line, controlling about 20 per cent of total industry capacity, is expected to be financed by drawing under its existing $1 billion credit facility, the company said.
The vessels: the Mette Maersk, Mathilde Maersk, Maren Maersk and Margrethe Maersk, were delivered to APM from Odense Steel Shipyard in 1989. The cost will be $40 million per vessel and they are expected to be delivered to Seaspan between November 1 and December 31.The new acquisitions will increase Seaspan's total fleet to 41 vessels, which represents a 78 per cent increase from its fleet at its IPO in August, 2005.
Seaspan also announced that it has arranged simultaneous five-year charter agreements for these four vessels with APM at a rate of $23,450 per vessel per day. After the initial five-year charter periods, APM will have two consecutive one-year options to recharter each ship for $22,400 per day and $21,400 per day, respectively. They will have a further option to charter each ship for two final years at $20,400 per day.
Each new vessel is expected to contribute, in the first 12 months following acquisition, between $5.9 million and $6.3 million in incremental EBITDA, the company said. Seaspan Management Services Limited (SMSL) will operate the ships for Seaspan at an expected rate of $5,750 per day.
"The completion of this acquisition will mark a major milestone in our development," said Gerry Wang, CEO of Seaspan. "This transaction with APM is our first acquisition of secondhand tonnage and will be immediately accretive to cash flow upon vessel delivery during the fourth quarter of 2006. Our detailed physical inspections of these vessels have verified APM's reputation for designing and building excellent vessels and maintaining them to a superior standard."
"It is Seaspan's plan to continue to grow our business through accretive acquisitions in order to grow our dividend per share and this acquisition is a material step in the furtherance of this plan."
