By Mike Wackett
The world’s largest containership leaser, Seaspan, says it has “no material concerns” about its exposure to troubled South Korean ocean carrier Hanjin Shipping. It said the carrier “continues to make charter hire payments regularly”, and it “did not anticipate any charter breaks”. CEO Gerry Wang said: “We have not received any request from Hanjin to renegotiate charter hires.”
According to Alphaliner, Seaspan has seven 10,100 TEU ships on ten-year charters to Hanjin, expiring in 2024/25 at a fixed daily hire rate of $43,000. The consultant said three of the ships were owned by Seaspan and four were managed on behalf of Greater China Intermodal Investments (GCI), a Marshall Islands-based investment vehicle set up by Seaspan and two other investors. During yesterday’s Q1 16 earnings call, Mr. Wang faced a barrage of questions on Seaspan’s relationship with Hanjin. It was noted that a breach in the terms of a charter party by Hanjin would be the first in the company’s 11-year history. Mr. Wang suggested that given the importance of both Hanjin and its bond-defaulting compatriot HMM to the South Korean nation, the government would be obliged to step in to the rescue. However, the executive did not elaborate on reports that a rescue plan for the Korean carriers would be conditional on obtaining charter rate reductions.
Vancouver-headquartered Seaspan has built up a fleet of 118 containerships representing 935,000 TEUs, linked to its business plan of fixed-rate long-term charters to blue-chip shipping lines that it says insulates it from the volatility of the charter market. The company has been able to raise money to build new ships based on the business plan – at March 31 it had $5.7 billion underpinned by charter parties. For the first quarter, Seaspan reported an EBITDA of $164 million on revenues of $215 million and it said was “following a dividend policy aimed at substantially returning capital to shareholders”.
Although Seaspan’s ships have an average of five years remaining on their charters, the company will have twelve 4,250-4,600 TEU Panamax vessels and one 8,500 TEU ship with charters expiring this year. In the case of the Panamax ships, the prospect of re-chartering was “challenging”, admitted Seaspan.
Mr. Wang said he was “excited” by the forthcoming alliance changes, and optimistic they could have benefits for Seaspan, given that the members of the likely three mega-alliances will need to match their fleet with their partners and thus need to upgrade ships. “We have already had calls from members of new alliances enquiring about new ships,” said Mr. Wang.
Meanwhile, according to an insider source, HMM obtained charter hire reductions from two shipowners last week. The source told The Loadstar: “Danaos Corporation and Zodiac Maritime became positive [reducing hire rates] at the third round of discussions, but with Navios Maritime Partners, Eastern Pacific Shipping, and Capital Product Partners, HMM has still to reach agreement.” HMM has around 33 container vessels on charter, including five 13,100 TEU ships covered by a 12-year fixed-rate charter party with Greek shipowner Danaos. By a rough calculation, the carrier could have reduced the hire rate on 60 per cent of its chartered ships.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)