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Seaspan Corporation has provided a rare update related to the financing of its massive newbuild orderbook, which now stands at 45 containerships ordered since December 2020.
So far, Seaspan says it has secured “concluded financings” in the second quarter for 13 of the vessels totaling approximately $1.3 billion in sale-leaseback financing arrangements. The vessels, which have an aggregate purchase price of approximately $1.4 billion, are expected to generate $2.7 billion of gross contracted cash flows over the duration of their long-term charters commencing upon delivery of each vessel. Deliveries are planned to take place in the fourth quarter of 2021 through the first quarter of 2024.
Hong Kong-based Seaspan Corporation, a wholly owned subsidiary of NYSE-listed Atlas Corp. (NYSE:ATCO), charters its vessels typically on long-term, fixed-rate time charters to the world’s largest container shipping lines.
As for the remaining 32 undelivered newbuild vessels, Seaspan noted that it has made “substantial progress” in securing financing commitments. Of the 32, 24 are anticipated to complete financings during the third quarter of 2021, while “optimal financing” is still being assessed for the remaining eight, including the six ships it announced yesterday.
“The financing commitments for 13 newbuilds affirms the company’s growth trajectory for the foreseeable future, and provides transparency on fleet expansion and related funding,” said Graham Talbot, CFO of Atlas and Seaspan. “Additionally, we have made significant progress toward simplifying our balance sheet and anticipate both further financial enhancements and the substantial completion of newbuild financing in the third quarter of 2021, with the exception of the eight newbuilds announced in June. These significant financing initiatives provide investors with a clearer picture of the reliable and proven growth that has become the hallmark of Seaspan.”
As for liquidity, Seaspan says it has total liquidity of $1,386.6 million, consisting of $657.1 million of cash and cash equivalents and $729.5 million from undrawn committed credit facilities, not including Atlas or other subsidiaries.
Seaspan’s update noted: “Atlas and its subsidiary, Seaspan do not usually provide such updates, however given the magnitude of change in the composition of capital structure and impact on growth investment and related financing, this update is being provided to ensure full transparency.”
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