UK-based containership owner Global Ship Lease and Poseidon Containers have completed their stock-for-stock merger creating a combined fleet of 38 ships.
The duo informed that prior to the closing, Poseidon Containers managed to refinance USD 228.8 million secured bank debt, achieving a 21% debt reduction of USD 48.2 million. The debt, collateralized by three new eco-design, wide-beam 9,115 TEU vessels, was refinanced via a USD 180.5 million credit facility that matures in June 2022.
“This transaction provides us with an attractive portfolio of assets, greatly enhanced financial and strategic flexibility, and preferential access to a highly capable, integrated platform. In addition, the closing of Poseidon Containers’ refinancing prior to the closing of this transaction further reduces our pro forma leverage and adds significant net asset value beyond what was contemplated at the time of our original announcement.
“The additional equity value created through the merger transaction, including the refinancing and the new charters, results in a total net asset value per share increase of 52%, to USD 2.58,” Ian Webber, Chief Executive Officer of Global Ship Lease, said.
Under the merger deal, GSL issued 24.045 million shares of Class A common stock and 0.250 million shares of Series C perpetual preferred stock, which are convertible in limited circumstances into an aggregate of 103.642 million shares of Class A common stock.
Affiliates of Kelso & Company L.P. are the sole holder of the convertible preferred stock, and represents approximately 49.2% of the voting power and approximately 56.4% of the economic interest in the company.
In total, the owners of Poseidon Containers own approximately 69.5% of the economic interest of the company.
GSL’s Board of Directors was expanded to eight directors, of whom two were nominated by Poseidon, and three, including two independent directors, were nominated by GSL. The remaining three independent directors have been selected jointly.
The closing of the merger creates an asset base of more than USD 1.3 billion, which the company believes will allow it to capitalize on favorable market fundamentals in the mid-sized and smaller containership segments.
With the recently announced new charters, the combined company’s contracted revenue stands at approximately USD 720 million.