Seaspan Nabs USD 120 Mn for GCI Newbuild Duo

COSCO HopeIllustration; Image Courtesy: Pixabay

Hong Kong-based containership owner Seaspan Corporation has penned a USD 120 million financing deal intended for 10,000 TEU containership pair.

The newbuildings are set for delivery in the second quarter of this year and are part of the 18-strong fleet of Greater China Intermodal Investments LLC (GCI), which was acquired by Seaspan in the first quarter of this year.

The 18 containerships are comprised of 10,000 TEU and 14,000 TEU eco-class vessels, representing a total of 204,000 TEU.

“On the strategic side, the acquisition of GCI improved our fleet composition as we increased our exposure to larger, more modern containerships that are in demand by our customers. In addition, we expanded our relationships with our customers, significantly increasing our contracted future revenue and EBITDA. Finally, the GCI acquisition provided an opportunity for Seaspan to expand its partnership with Fairfax and other financing partners, reinforcing the strength of our integrated platform,” Bing Chen, President and Chief Executive Officer of Seaspan, said speaking on the importance of the GCI acquisition.

To remind, Seaspan secured a total of USD 500 million in capital from affiliates of Fairfax, with USD 250 million received during the quarter and USD 250 million to be funded in January 2019.

Furthermore, the company said that it had entered into a USD 100 million secured credit facility in March 2018. The loan bears interest at LIBOR plus a margin and is secured by 11 previously unencumbered vessels currently owned by Seaspan.

In terms of financial performance in the first three months of the year, the containership charterer said its total revenues were USD 224.8 million, up by 11 pct from last year’s equivalent of USD 201.3 million.

The increase was driven by the addition of 16 operating vessels from GCI, interest income from leasing five bareboat charter vessels to MSC, and the full-year impact of the delivery of one 14000 TEU vessel in 2017, Sespan said.

Seaspan’s net earnings stood at USD 67.7 million, also up from USD 40 million booked in Q1 2017.

“Our industry remains fragmented, and we are actively seeking opportunities to grow our business and improve our returns on invested capital. In doing so, we remain disciplined in evaluating and executing on growth opportunities in order to generate long term shareholder value,” Chen added.

Seaspan added that it currently has 12 unencumbered vessels in its operating fleet, out of the 108 vessels in total, consisting of two 2500 TEU, two 3500 TEU, six 4250 TEUs, and two 9600 TEU containerships.

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