October 11, 2006
Seaspan to acquire four Maersk box ships
Seaspan Corporation (NYSE:SSW) says it has signed contracts to acquire four 4,800 TEU vessels from A.P. Moller-Maersk A/S (APM). After purchase, the ships will be chartered back to Maersk.
These 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, 2006.
This new acquisition will increase Seaspan's total fleet to 41 vessels, which represents a 78% 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. It will have a further option to charter each ship for two final years at $20,400 per day.
Seapan expects each new vessel to contribute, in the first twelve months following acquisition, between $5.9 million and $6.3 million in incremental EBITDA..
"The completion of this acquisition will mark a major milestone in our development," said Gerry Wang, Chief Executive Officer of Seaspan. "We are pleased to add APM, the largest carrier in our market, to our existing portfolio of customers. 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."
The 4800 TEU vessel size will complement Seaspan's existing fleet consisting of 9600 TEU, 8500 TEU, 5100 TEU, 4250 TEU, 3500 TEU and 2500 TEU vessels.
Seaspan Management Services Limited ("SMSL") will operate the ships for Seaspan at an expected rate of $5,750 per day.
Seaspan expects to finance this purchase by drawing under its existing $1 billion credit facility.