With the recovery of the container shipping industry, the world's largest container ship charter company is seizing the opportunity to purchase high-quality ship assets.
It is reported that the container ship owner and operator Seaspan Group recently acquired the remaining 89% of GCI shares from the Carlyle Group subsidiary and minority shareholders of Greater China Intermodal Investments LLC (GCI) with a transaction value of US$450 million. After the transaction is completed, the ship capacity owned by the Seaspan Group will account for 8% of the global container ship market.
Seaspan is headquartered in Hong Kong and has held 11% of the GCI, a joint venture company it helped to establish, since 2011. Under the agreement, Seaspan will acquire the remaining 89% of the joint venture company, which has a net debt of approximately $1 billion.
It is understood that GCI currently has a total of 18 10,000 TEU and 14,000 TEU container ships, a total of 204,000 TEU. There are currently 16 ships in operation and the remaining two ships will be delivered in the second quarter of 2018.
Seaspan stated that GCI’s implied corporate value is approximately $1.6 billion, including assumed third-party net debt of approximately $1 billion and $140 million in future ship payments. It is understood that the selling price of the shareholder is approximately US$330 million and the D-series preferred stock issued by Seaspan is US$50 million.glenflange
Seaspan President and CEO Chen Bing said, "This acquisition will greatly increase our future contract revenue and enhance our ability to provide our customers with the most advanced modern container ships. GCI's fleet is now ours and we are stepping up The client's partnership and strengthen our continued expansion, continued growth and future market integration capabilities. As the container shipping industry begins to show signs of recovery, we are taking decisive action to use the tempting opportunities that have emerged in the market.”
It is understood that Seaspan provides cash through cash on the balance sheet and reinvestment of the Washington family's $16 million in Seaspan common stock. The company also received 100 million U.S. dollar guaranteed credit from Citibank.
Seaspan also announced that Fairfax Financial Holdings Limited has reached a definitive agreement to invest an additional US$250 million in Seaspan bonds and will be in place by January 2019. In addition, both parties completed a $250 million investment in January this year.
According to industry sources, Seaspan's transaction aims to integrate Alphaliner data into the more dispersed global container shipping industry. Seaspan is the world's largest container ship charter company based on shipping capacity statistics. After the above transaction is completed, Seaspan will occupy 8% of the container ship market. Its customers include Cosco Group and Maersk Line in Denmark. At the same time, GCI’s current fleet is expected to increase Seaspan’s revenue by approximately US$1.3 billion, bringing its total revenue to US$5.6 billion.