Seaspan orders five 14,000 TEU containerships from HHI

HHI-Wins-USD-600-million-Boxship-OrderJANUARY 16, 2013 – Hyundai Heavy Industries (HHI), the world's largesT shipbuilder, today reported that it has won a $600 million order from Seaspan Corporation for five 14,000 TEU containerships. The contract includes an option exercisable by the owner for five additional same-class boxships.

Mr. Lee Jai-seong (fourth from left), president & CEO of Hyundai Heavy; Mr. Gerry Wang (fifth from left), CEO & co-chairman of Seaspan Corp.; Mr. Kyle Washington (sixth from left), co-chairman of Seaspan Corp.

Hyundai Heavy Industries has won all orders placed worldwide in the past year for ultra-large containerships of over 10,000 TEU.

The ships in the latest Seaspan order will measure 368 m in length, 51 m in width, and 30 m in depth and are scheduled to be delivered from 2015. Upon delivery from HHI's Ulsan, South Korea, shipyard, the vessels will be charted to the Taiwan's Yang Ming Marine Transport Corp on a long-term contract.

According to Seaspan, the ships will be constructed using Seaspan's fuel efficient SAVER design. Concurrently with executing the newbuilding contracts, Seaspan signed 10-year, fixed-rate time charters for the vessels with Yang Ming Marine Transport Corporation. After the initial 10-year charter periods, Yang Ming may extend the charter for each vessel up to an additional two years.

Seaspan says these five 14,000 TEU class containerships remain subject to allocation in relation to the right of first refusal agreement with Greater China Intermodal Investments LLC, an investment vehicle established by an affiliate of global alternative asset manager The Carlyle Group, and Blue Water Commerce LLC.

Seaspan says it intends to fund construction of its portion of these five containerships initially with a portion of the proceeds of its previous Series C and D preferred share offerings and, subsequently over the next few quarters, with debt financing. Seaspan is considering various sources of debt financing to which it has access.

The containerships will feature an electronically-controlled main engine and HiBallast seawater treatment system. The electronically-controlled main engine will maximize fuel efficiency, reduce noise, vibrations, and carbon emissions by automatically controlling fuel consumption to suit sailing speed and sea conditions.

The HiBallast system is a seawater treatment system HHI developed in 2011. HiBallast can treat 8,000 cu. m of seawater per hour by filtering and sterilizing bacteria and plankton bigger than 50 µm through electrolysis.

For 2013, Hyundai Heavy has set itself an annual new orders target of USD 29.7 billion, 52.3% up from a year earlier, and aims to achieve sales of KRW 26. 9 trillion (USD 25.4 billion), 7.1 percent up against the previous year.

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