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Seaspan Corporation - New Thread


JEast
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At first, there were very few board members that seemed interested in Seaspan Corporation.  However and as there now appears to be some interest, I thought it appropriate to start a new thread with a bit of an interesting development.  Most of the investment community has been worried about the global economy (justified) and Seaspan's capital funding for the remaining fleet (partially justified).  The interesting development is that Seaspan just recently has been able to acquire a 4250 TEU newbuilding on favorable terms from Zhejiang Shipbuilding in China.  Though the time charter to United Arab Shipping Company is for only two-years, it indicates that our management team is still in the game and following thru with their plan.

 

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=476502

 

Cheers

JEast

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Yes , a good development , the cost was 57% of the other 4250 ships purchased from Zhejiang and 60% financed by equity at 5%.

Another positive development was a further reduction of their equity needs to $125 mil and a delay in timing.  Another sale/ lease deal

should lower their equity needs below $100 mil. 

From the 6-K:

 

We currently have $1.1 billion available under our credit and lease facilities to fund our $1.3 billion newbuilding program. To fund the remainder, we will need to issue approximately $125 million in common or other equity and/or other forms of capital over the period from the third quarter of 2011 to the third quarter of 2012. This is a reduction from our previously stated equity capital needs of $140 million and a deferral of the period from the second quarter of 2011 to the second quarter of 2012. The state of the global financial markets and economic conditions may adversely impact our ability to issue additional equity at prices that will not be dilutive to our existing shareholders or preclude us from issuing equity at all. We will continue to actively pursue alternatives that will allow us to defer or eliminate some or all of our current equity needs.

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Has anyone looked at TOPS.  They lease their ships for a shorter period of time and have a cheaper valuation.  I was not able to find who there customers were however.  Any additional info would be appreciated. TIA.

 

Packer

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  • 3 weeks later...

Interesting article in Bloomberg about Seaspan considering for a listing in Shanghai if approved. If so and over the next few years, it would support capital raising in the future.

 

http://www.bloomberg.com/news/2010-06-26/lse-seaspan-seek-shanghai-stock-listing-on-investor-demand-yuan-outlook.html

 

Also noticed that charter rates have risen nearly every month since February and have doubled since the beginning of the year.

 

http://www.tradewinds.no/liner/article562051.ece

 

Cheers

James

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Does anyone here have a fairly good guess as to how much ship prices have increased since December 2009?

 

This question is in relation to what they wrote in their Q2/Q3/Q4 earnings releases last year:

 

Our $1.3 billion credit facility agreement contains a loan to market value ratio requirement that must be met before we can borrow funds under that facility. Based on a valuation obtained in December of 2009, we are currently unable to borrow the remaining $267 million under our $1.3 billion credit facility; however, we do not require this amount to fund the remaining installments for our newbuild fleet.

 

I suppose it's sort of obvious why I'm asking.

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  • 3 weeks later...

Seaspan made a surprise 25% increase in the dividend.  Surprise in that they have not announced all their capital funding yet.  Irrespective, this is a strong statement from the board.

 

http://www.marketwatch.com/story/seaspan-declares-second-quarter-2010-dividend-of-0125-per-share-2010-07-27?reflink=MW_news_stmp

 

Cheers

JEast

 

They only needed the dividend cut in the first place because of the low appraised values of their ships -- last updated in December 2009.  The rebound in container shipping must be having some positive impact on their value.

 

The spontaneous unscheduled acquisition of a month ago, and now the dividend increase.  Further, on the last conference call they indicated that they were confident the funding gap would be taken care of by the end of this year.

 

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  • 2 months later...

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