SEASPAN ACQUIRES GCI 1 MARCH 14, 2018

Transcription

1 SEASPAN ACQUIRES GCI MARCH 14,

2 Notice on Forward-Looking Statements This presentation contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect management s current views with respect to certain future events and performance, including, in particular, statements regarding: estimated range of EBITDA from GCI; future operating or financial results; ability to achieve sustained growth and drive consolidation in the containership sector; estimated supply and demand for containerships; our competitive strengths and industry position and their effect on our future business and results; estimated expansion of our business and growth opportunities, including potential vessel and business acquisitions; our financial strength and flexibility; future industry supply and demand levels; no operational integration risk on Seaspan s acquisition of GCI; and potential increase in charter rates and asset prices. Although these statements are based upon assumptions we believe to be reasonable, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to: the availability to us of containership acquisition or construction opportunities; the availability and cost to us of financing, including to refinance existing debt and to pursue growth opportunities; general market conditions and shipping market trends, including charter rates, vessel asset values and sales volumes, scrapping rates and newbuild orders, and the sustainability of any recent rate improvements or other signs of a potential market recovery; conditions in the containership market; increased operating expenses; our future cash flows and our ability to make dividend and other payments; the time that it may take to construct new ships; Seaspan s continued ability to acquire assets and enter into time charters with customers; changes in governmental rules and regulations or actions taken by regulatory authorities; the financial condition of shipyards, charterers, lenders, refund guarantors and other counterparties and their ability to perform their obligations under their agreements with us; the potential for newbuilding delivery delays; the potential for early termination of long-term contracts and our potential inability to renew or replace long-term contracts; changes in accounting rules or treatment; working capital needs; our ability to maintain our position as the leading independent containership owner and operator; and other factors detailed from time to time in Seaspan s periodic reports and filings with the Securities and Exchange Commission, including Seaspan s Annual Report on Form 20-F for the year ended December 31, We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. 2

3 Transaction Summary CONSIDERATION Seaspan acquires remaining 89% of Greater China Intermodal Investments ( GCI ) for a total implied enterprise value of $1.6 billion including: ~$1.0bn of assumed third party net debt ~$140m newbuilds (up to $120m anticipated to be debt financed) Selling shareholders will receive: ~$330m cash consideration ~$50m of Seaspan Series D preferred shares FINANCING AND SUPPORT FROM KEY INVESTORS Fairfax Financial commits to invest an additional $250 million in Debentures and Warrants which will fund in January 2019 Ongoing support from the Washington family as largest shareholder through reinvestment in common equity $100 million secured credit facility from Citi enhances liquidity Pro-forma net debt to equity ratio of ~2x, with a goal to de-leverage over time PRO-FORMA FINANCIAL CONTRIBUTION Increases Seaspan s contracted future revenue by $1.3 billion to $5.6 billion Expected contribution from GCI in calendar year 2019: EBITDA $185m to $200m Significantly accretive to earnings per share 3

4 Compelling Strategic Rationale REINFORCES INDUSTRY-LEADING POSITION Solidifies position as largest independent containership owner operator Provides opportunity to achieve sustained growth and drive consolidation in the fragmented containership sector Expands integrated platform for best-in-class service to our industry leading customers Strong leadership team with focus on Operational Excellence IMPROVES FLEET COMPOSITION Seamless integration of complementary fleet portfolio and customer relationships Reduces average vessel age and adds to pipeline of newbuilds Increases fleet exposure in 10,000 TEU and 14,000 TEU eco-class vessels in versatile sectors STRENGTHENS FINANCIAL POSITION Generates top-line growth and robust long-term contracted future revenue Enhances time charter profile Financial backing from long-term investors, Fairfax and the Washington family ENHANCES PLATFORM FOR SUSTAINABLE GROWTH Strengthens commercial position through an enhanced fleet mix Deepens customer relationships Leverages scale of Integrated Platform to capture opportunities in recovering market 4

5 Expansion of Platform Attractive Fleet Diverse fleet, focused on growing trades Modern, flexible assets Leading Industry Relationships 7 of top 8 liners¹ 5 of top 8 liners¹ Highly Predictable Business Model Best in Class Operating Platform Access to Capital $4.3 billion in contracted revenue Integrated business platform Diverse bank syndicate Capital markets access Supportive long-term investors $1.3 billion in contracted revenue SSW managed operations since inception Diverse bank syndicate Private equity sponsorship Seaspan and GCI Partnership GCI founded in 2011 as a joint venture between the Carlyle Group, Seaspan Corporation, the Washington family, and Tiger Group Seaspan has designed, overseen construction and operated GCI s entire fleet since inception Seaspan provides technical and commercial management of GCI s vessels, owning sister ships in its own fleet No operational integration risk given Seaspan operating history of GCI s fleet (1) Based on February 2018 Alphaliner monthly monitor Top 30 carrier rankings and reflects COSCO s ownership of OOCL. 5

6 Customer Diversification 10% 5% 4% 5% 8% 1% 38% 10% 10% 15% 46% 6% 3% 8% 7% 9% 1% Combined 29% 11% 18% 19% 13% 24% Cosco Yang Ming MOL Hapag Lloyd MSC K-Line Maersk CMA- CGM Other Increases exposure to customers with historically lower concentrations Deepens existing relationships and enhances customer diversification Note 1 Customer concentrations based on % of TEU by charterer. 6

7 Fleet Composition Combined # of Vessels (including newbuilds) Fleet TEU 701, , ,900 Average Vessel Size 7,500 TEU 11,333 TEU 8,100 TEU TEU-Weighted Avg. Remaining Charter Period 5.2 yrs 5.4 yrs 5.2 yrs TEU-Weighted Avg. Vessel Age 6.1 yrs 2.6 yrs 5.4 yrs Fleet Mix 2,500 3,500-4,250 4,500 5,100 8,500 9,600 10,000 11,000 13,100 14,000 4% 33% 16% 6% 15% 26% 4% 16% 33% 41% 6% 59% 15% 26% 35% 3% 12% Combined 34% 5% 11% 7

8 SSW GCI Seaspan Positioned to Benefit from Industry Trends Reinforces Seaspan s Industry-Leading Position Increases emphasis on consolidation, alliances and joint ventures 8% Containership Lessor Market Share (in TEU) (1) Fleet modernization for cost competitiveness and regulatory requirements 5% 4% 4% 4% 4% Flight to safety, as liners select partners and service providers with financial strength and scale 3% 3% 3% 2% 2% 2% 2% 2% 2% Competitive landscape is changing as many historical players are constrained Creates opportunities for Seaspan to further enhance its leadership position (1) Source: February 2018 Alphaliner Monthly Monitor 8

9 Improving Market Fundamentals Provide Solid Platform for Growth 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Q BROAD CONTAINER BASED THROUGHPUT GROWTH IN 2017 GROWTH 1 8.0% 6.0% 4.0% 2.0% 0.0% 6.6% GLOBAL TRADE GROWTH HIGHEST SINCE ORDERBOOK AT LOWEST LEVEL IN DECADES 3 IDLE FLEET NEAR DECADE LOW % (1) Alphaliner Container Shipping Market Outlook 2018 Presentation February 2, 2018 (2) Alphaliner Monthly Monitor February 2018 and Alphaliner weekly newsletter 2018 issue 07. (3) Clarksons Research March

10 Compelling Strategic Rationale REINFORCES INDUSTRY-LEADING POSITION Solidifies position as largest independent containership owner operator Provides opportunity to achieve sustained growth and drive consolidation in the fragmented containership sector Expands integrated platform for best-in-class service to our industry leading customers Strong leadership team with focus on Operational Excellence IMPROVES FLEET COMPOSITION Seamless integration of complementary fleet portfolio and customer relationships Reduces average vessel age and adds to pipeline of newbuilds Increases fleet exposure in 10,000 TEU and 14,000 TEU eco-class vessels in versatile sectors STRENGTHENS FINANCIAL POSITION Generates top-line growth and robust long-term contracted future revenue Enhances time charter profile Financial backing from long-term investors, Fairfax and the Washington family ENHANCES PLATFORM FOR SUSTAINABLE GROWTH Strengthens commercial position through an enhanced fleet mix Deepens customer relationships Leverages scale of Integrated Platform to capture opportunities in recovering market 10

11 Appendix 11

12 GCI Fleet List Vessel Name Vessel Class (TEU) Year Built Charter Start Date Charterer Length of Charter Daily Charter Rate CMA CGM Cochin (Note 1) CMA CGM 3 years + option for up to 3 years Market Rate CMA CGM Chennai (Note 1) CMA CGM 3 years + option for up to 3 years Market Rate YM Wreath /30/2017 Yang Ming Marine 10 years + one 2-year option $ 46,500 YM Welcome /16/2016 Yang Ming Marine 10 years + one 2-year option $ 46,500 YM Worth /17/2015 Yang Ming Marine 10 years + one 2-year option $ 46,800 YM Wholesome /23/2015 Yang Ming Marine 10 years + one 2-year option $ 46,800 YM Wondrous /26/2015 Yang Ming Marine 10 years + one 2-year option $ 46,800 YM World /13/2015 Yang Ming Marine 10 years + one 2-year option $ 46,800 Maersk Gibraltar /26/2016 Maersk 5 years + two 1-year options $ 37,150 Maersk Guatemala /03/2015 Maersk 5 years + two 1-year options $ 37,150 MOL Bellwether /23/2015 MOL 8 years + one 2-year option $ 37,500 MOL Beauty /01/2015 MOL 8 years + one 2-year option $ 37,500 MOL Belief /03/2015 MOL 8 years + one 2-year option $ 37,500 MOL Brilliance /17/2014 MOL 8 years + one 2-year option $ 37,500 Seaspan Elbe (Note 2) CMA CGM 3 years + option for up to 3 years Market Rate Seaspan Hudson (Note 3) Yang Ming Marine 2 years Market Rate Seaspan Amazon /12/2017 Hapag-Lloyd 1.8 years Market Rate Seaspan Thames /03/2017 Hapag-Lloyd 1.8 years Market Rate Note 1 CMA Cochin and CMA Chennai are scheduled for delivery during Q Note 2 Seaspan Elbe is scheduled to commence its charter with CMA CGM during Q Note 3 Seaspan Hudson is scheduled to commence its charter with Yang Ming Marine on March 31,