Seaspan could raise up to $1 billion
Containership owner and charterer Seaspan said it has filed a universal shelf registration statement with the Securities and Exchange Commission that would allow it to sell up to $1 billion of securities.
If declared effective, the FEC filing would allow it to sell common and preferred stock, debt securities, warrants, subscription rights or any combination
Seaspan said unless specified differently in the future, the funds would be used to acquire additional ships, other capital expenditures, repay debt or general corporate purposes.
The company noted the new registration statement replaces an expired registration statement on Form F-3 that was previously filed with the SEC in April 2007. It is intended to provide Seaspan with financial flexibility for future growth and does not reflect a change in its financing strategy.
Seaspan owns 53 ships and has another 16 on order to be delivered over the next 21 months. Its customers include eight of the world’s largest liner companies: China Shipping, Maersk, MOL, Hapag-Lloyd, COSCO, 'K' Line, CSAV and UASC.
When the company announced its earnings earlier this month, Gerry Wang, chief executive officer, said Seaspan planned to “pursue additional growth opportunities. During a time when the fundamentals in the container shipping industry have improved considerably, we remain well-positioned to strengthen Seaspan as a leading franchise.”
During a conference call with stock analysts earlier this month, Wang said that with the recovery of market conditions, banks 'may become more inclined to force some distressed opportunities to take place, given they may get paid for what they are owed. We will continue to monitor the market situation. We have been having some conversations with the financial institutions, the banks on a regular basis. Hopefully Seaspan will be one of the first on the queue should that opportunity become real.”
During the call, Wang was also asked if he thought slow steaming, which has been widely adopted during the past two year by carriers, would be permanent.
He said recent orders by APL and Evergreen for strings of 10 ships, and reports of other carriers considering orders of 10 rather than eight or nine ships for Asia/Europe strings are “a strong demonstration that liner operators are looking at super-slow steaming as a more permanent setup.”
But he also pointed out the industry is seeing a shortage of containers, surge in container volumes, and rising freight rates.
“So under pressure from all those factors, I would expect one or two or more operators may be forced to move back to the original mode of eight to nine vessels as opposed to 10 vessels — but at this point of time I don’t have the visibility of that happening yet, and I can only speculate. It also depends on the future fuel price. If fuel price stays high, that possibility becomes less.”
Wang said vessels in Seaspan’s fleet are all relatively new and there is no technical issue involved in them operating at slower speeds. But he said long-term slow steaming could force capital spending to retrofit or renew older vessels. ' Chris Dupin