In a prospectus tied to the upcoming sale of perpetual preferred shares the US-listed shipowner said it is negotiating a contract to construct a pair of 10,000 teu newbuildings in China at Jiangsu Yangzijiang and Jiangsu New Yangzi Shipbuilding, respectively.
If all goes according to plan the company intends to fix the vessels out to “a leading container liner company” under what was described as “anticipated eight to ten-year fixed-rate time charters” upon delivery in 2014.
In addition, Seaspan is in talks to purchase a pair of 4,600 teu containerships that are due to hit the water in the second half of 2013 from the same counterparty and charter the duo back to the unidentified operator for two to three years.
Analysts expect pen to meet paper by the second half of next year and note the proposed transaction is part of a larger eight-vessel deal that involves various joint ventures partners likes The Carlyle Group, Tiger Group and an investment vehicle backed by Dennis Washington.
Commenting on Wednesday’s developments Deutsche Bank equity analyst Justin Yagerman described the increased capital at Seaspan as “both opportunistic but troubling" as the fundraising exercise may not bode well for the holders of common stock.
“The preferred equity diverts cash (preferred dividends) from common shareholders and historically Seaspan has let it sit on its balance sheet before deploying for new acquisitions,” he told clients, adding: “However, in the current capital constrained environment, we have trouble faulting shipping companies for raising capital if they can.”
Seaspan’s fleet of 69 containerships includes three 10,000 teu newbuildings on order in China that are due for delivery in 2014. Upon delivery the trio will be chartered to Hanjin for ten years under deals that include two-year options, according to today’s prospectus.
You can read the prospectus in full by clicking on the link located under the Related Media section to the right of this article
