Seaspan Corporation (Seaspan), a wholly-owned subsidiary of Atlas Corp. (Atlas) (NYSE:ATCO), Thursday announced that it has agreed to the purchase of two high-quality containerships for approximately $146 million in cash.
The purchase of the Acquired Vessels is expected to be financed from additional borrowings as well as cash on hand. Seaspan expects to take delivery of the Acquired Vessels in Q3 2020, subject to customary closing conditions. The transaction is expected to be immediately accretive to Atlas’ earnings per diluted share and increase long-term contracted revenue by over $150 million while maintaining a strong net debt to equity ratio of approximately 1.2x1.
The Acquired Vessels are comprised of two 13,000 TEU vessels built in 2010 and 2011, both of which will operate under long-term charters with a leading global liner. Pro forma for this acquisition, Seaspan’s global fleet will consist of 125 vessels and approximately 1,049,000 TEU, with total contracted revenue of approximately $4.5 billion1 and a weighted average remaining lease period of approximately 4 years1.
Bing Chen, Chairman, President and Chief Executive Officer of Seaspan, commented, “I am extremely proud of our team’s consistent discipline and execution during this unprecedented time. Despite the extreme market conditions, we will have successfully acquired a total of 13 high-quality vessels backed by long-term charters with three different leading global liners over the past year and during the height of COVID-19. This is a true testament to our resilient business model and best-in-class integrated platform, as well as the committed and creative partnerships with our liner customers who trust us as their scalable, reliable, long-term solutions provider.”
Ryan Courson, Chief Financial Officer of Seaspan, added, “This transaction further demonstrates our patience in allocating capital at the right time, and our ability to source and execute investments to achieve attractive rates of return through economic cycles. We remain committed to maintaining the strength of our balance sheet, including a focus on maintaining liquidity, which stands today at over $400 million, while continuing our disciplined approach to strategic growth opportunities.”
1. As of March 31, 2020, adjusted for the Acquired Vessels; net debt based on principal value of debt and long-term obligations under financing arrangements, less cash and cash equivalents