Seaspan Orders 10 More Box Ships for Charter to Zim
Seaspan Corporation on Tuesday announced it has entered into long-term charters with Zim Integrated Shipping Services for 10 dual-fuel liquefied natural gas (LNG) containership newbuilds, extending the containership lessor's newbuild ordering spree amid continued high demand and vessel shortages.
The "ultra-modern" 7,000 TEU vessels will be built by a "major shipyard" for an aggregate purchase price of approximately $1.05 billion, and they are expected to be delivered starting in the fourth quarter of 2023 and throughout 2024, Seaspan said.
Seaspan, a wholly owned subsidiary of Atlas Corp., said it will finance the newbuilds using existing liquidity, cash flow from operations and additional borrowings. It added the 12-year charters will total approximately $1.8 billion of gross contracted cash flow.
Bing Chen, chairman, president and CEO of Seaspan, said, "We are very pleased to collaborate with ZIM on this forward-thinking project which provides advanced designs, competitive pricing and valuable deliveries. We see these modern 7,000 TEUs to be the natural successor to the aging global pool of conventional vessels in the 4,000 to 9,000 TEU range, where relatively little fleet renewal has taken place. We are experiencing strong customer interest for this vessel size."
Graham Talbot, CFO of Seaspan, said, "We continue to execute on our growth plan in a prudent manner. In line with all of our vessel investments, we have de-risked the $1.05 billion capital expenditure associated with the dual-fuel LNG containerships by signing long-term charters with a leading global liner representing approximately $1.8 billion of contracted cash flow. We intend to maintain balance sheet and risk management integrity while continuing the growth track that we have established over Seaspan's 20-year history. We remain diligent on our path toward an investment grade credit rating, and operational scale will play an important role in this pursuit."
Since December 2020, Seaspan has announced 55 newbuild vessel orders and the acquisition of four second-hand vessels, all four of which have since been delivered. Among these, in February 2021, ZIM and Seaspan announced a long-term charter agreement for 10 15,000 TEU LNG-fueled vessels.
Eli Glickman, Zim president and CEO, said, "We are very pleased to once again partner with Seaspan as we strategically enhance our operating fleet to further facilitate our long-term strategy. With this second long-term chartering agreement, we are securing access to our core fleet, while maintaining operational agility with respect to the total number of vessels we operate. Since going public, and further evidenced by this transaction, we remain committed to deploying capital prudently and enhancing shareholder value.
"Keeping with our commitment to reducing our carbon footprint and preserving our oceans, we are investing in state-of-the-art 'green’ vessels that use the cleanest technology currently available. We are proud that this transaction will further improve our carbon intensity standing among the global liners."