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Seaspan secures landmark MOL boxship charters

Seaspan secures landmark MOL boxship charters

Following on from successful chartering relationships with CP Ships and China Shipping, Seaspan Corp last night penned a landmark contract with Hyundai Heavy Industries at the Shangri-La Hotel in Hong Kong to construct four 5,100 teu containerships that will go on charter to Japan's Mitsui OSK Lines.

Canadian firm Seaspan is paying US$333.6m for the ships, which MOL will charter at $28,880 a day for 12 years providing Seaspan with $505.9m in revenues, almost a 50% margin on its investment. Each of the four ships should contribute between $8.5 million and $9 million annually in incremental EBITDA, or net earnings before interest, undrawn credit facility fees, taxes, depreciation and amortization of deferred financing fees, Seaspan said.

The ships will be delivered between April and December 2009.Including other container ships on order, this will bring Seaspan's fleet to 37 vessels."We are extremely excited to enter into our first charters with a Japanese liner major," said Gerry Wang, Chief Executive Officer of Seaspan. "MOL is a wonderful addition to our portfolio of customers with their investment grade credit rating and excellent business reputation.

In addition, we are pleased to execute our first shipbuilding contracts with HHI, the global leader in the construction of container vessels. This project brings diversification in terms of customer, vessel size and shipbuilder to our company while meeting our strict return and credit risk criteria."

For conservative MOL, which is determined to play a rapid game of catch up on the container rankings, this is a radical new overseas way of financing ships. Traditionally, MOL would go to Tokyo's trading houses or the owners in the Shikoku region to finance such long-term charter deals. [09/08/06]