Haifa, Israel, headquartered ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), reports that it has exercised its option to long-term charter an additional five 7,000 TEU liquefied natural gas (LNG) dual-fuel container vessels from Seaspan Corporation. The option was exercised under ZIM’s July 21 agreement with Seaspan for ten 7,000 TEU LNG vessels due to be delivered starting from the fourth quarter of 2023 and into 2024, bringing the total number of vessels chartered under the transaction to 15.
“With this option exercise, we are securing ZIM’s core fleet needed to serve our operations and meet our customers’ growing needs, while continuing to maintain our operational agility,” said Zim president and CEO Eli Glickman. “Furthermore, this transaction demonstrates our deep commitment to the environment and to reducing our carbon footprint. We continue to invest the resources necessary to be an industry leader and to prepare ourselves for the cleaner future of our industry.”
Seaspan’s parent Atlas Corporation (NYSE: ATCO) says that Seaspan will enter into agreements with a major shipyard to construct the five additional ships, which are anticipated to be delivered during the fourth quarter of 2024. They will be financed from existing liquidity, cash flow from operations, and additional borrowings. Their aggregate purchase price will be approximately $530 million, with their 12-year minimum charters totaling approximately $900 million of gross contracted cash flow
Bing Chen, chairman, president and CEO of Seaspan, commented, “We continue to create value for our customers through differentiated services, operational excellence, and the ability to implement solutions tailored to our customers’ changing requirements. The exercise of this option, with valuable vessel deliveries at competitive pricing, highlights the continued quality growth for both companies. The advanced design of these vessels demonstrates Seaspan and ZIM’s leadership in ESG initiatives and a more sustainable industry. With strong customer interest in this vessel size, we consider this category to be the natural successor to the aging global fleet of conventional vessels between 4,000 and 9,000 TEU.”
Since December 2020, and including the five ships announced today, Seaspan has announced 60 newbuild vessel orders and the acquisition of four second-hand vessels, all four of which have since been delivered.