Seaspan Adds Five 14,000 TEU Newbuilds After Inking Charter Contracts

Seaspan’s SAVER hull design was developed with a low cost profile in mind.
Seaspan’s SAVER hull design was developed with a low cost profile in mind.

New York-listed Seaspan Corporation (NYSE: SSW) has ordered an additional five fuel-efficient 14,000 TEU containerships after signing a total of ten long-term, fixed rate time charter contracts with Yang Ming Marine Transport Corp. for the vessels.

The first five ships are to be built at Hyundai Heavy Industries in South Korea and will be chartered to Yang Ming under 10-year, fixed-rate time charter contracts upon their delivery in 2015.

In a statement Tuesday, Seaspan announced that it has signed a Letter of Intent with CSBC Corporation of Taiwan calling for the construction of an additional five 14,000 TEU ships for a purchase price of $550 million. The vessels will also be chartered to Yang Ming under similar long-term, fixed-rate time contracts and are scheduled for delivery in 2016. Seaspan says it expects to complete the definitive contracts shortly.

“We are pleased to partner with Yang Ming, one of the premiere liners in the industry, to place one of the largest recent newbuilding orders and to entrust our technical teams with building and managing their flagships as they modernize their fleet,” said Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of Seaspan. “This order demonstrates our ability to draw upon our financial strength and deep technical and operational expertise to place large scale orders that realize economies of scale for our customers and deliver accretive growth to our shareholders. With this order, our managed fleet including both Seaspan and GCI newbuilds on order, is closing in on 100 ships.”

The ten new ships will be constructed using Seaspan’s so-called SAVER design, a fuel efficient hull design developed by MARIN and Marine Design and Research Institute of China (MARIC).

Seaspan’s managed fleet currently consists of 99 containerships with a combined capacity of over 740,000 TEU, including 26 newbuild containerships on order and scheduled for delivery to Seaspan and third parties by the end of 2016. Seaspan’s current operating fleet of 71 vessels has an average age and remaining lease period (excluding the effect of charterers’ options to extend certain time charters) of approximately six years.