The strategic combination will create a company with an asset base of more than $1.2bn from 38 vessels with a total capacity of 198,793 teu, an average fleet age of 10.7 years and contracted revenue of $528m as of 30 September 2018.
GSL has 19 vessels all fixed on time charters. Poseidon Containers also has 19 vessels with 16% on a teu weighted average on long term time charters and 84% on time charters of less than 12 months or operating in the spot market.
Ian Webber, ceo of GSL, will continue as ceo of the combined company.
“This attractive combination is the result of our strategic alternatives review process, enabling GSL to double the size of our fleet, diversify and enlarge our portfolio of customers, improve our fleet age profile, reduce leverage, and significantly strengthen our ability to capitalize on compelling growth opportunities,” Webber said.
George Youroukos, ceo of Poseidon Containers, commented: “The clear disconnect between supportive long term supply/demand fundamentals and cyclically low asset prices represents a highly compelling opportunity to invest in mid-sized and smaller containerships.”
The combined company is also expected to benefit from operational and commercial capabilities that Youroukos has separately established. This includes ship management company Technomar and ConChart, an organization focusing on enhance commercial coverage.
Youroukos will join the combined company as executive chairman to lead the management team.
Upon closing of the transaction, Poseidon Containers will contribute an additional $227m in equity value, and as a result members of Poseidon Containers are set to own approximately 69.5% of the economic interest of GSL.
The merger is expected to reduce GSL’s overall financial leverage to around 67% on a loan, net of cash, to charter-adjusted value basis.
The merger transaction, which does not require any approvals from shareholders, is subject to customary closing conditions and is expected to close in November 2018.
Poseidon Containers was represented in this deal by a law firm team at Seward & Kissel LLP - led by partners Gary Wolfe and Nick Katsanos.