Photo: Boxship/Illustration; Image by Offshore Energy

Seaspan orders five 12,200 TEU boxships

Hong Kong-based containership owner Seaspan Corporation has entered into purchase orders to build five 12,200 TEU containerships.

The order is backed by 18-year long charters from an unnamed liner major. All five vessels are subject to vessel purchase obligations at the conclusion of the charters.

The company expects the transaction to add approximately $910 million of contracted cash flows over the charter period.

Seaspan plans to finance the order via additional borrowings as well as cash on hand.

“Executing a discreet newbuild opportunity to fulfil customer needs and achieve targeted returns is a win-win result. Together, with our valuable customer, we were able to develop mutually beneficial business solutions while adding high value vessels to our fleet and expanding our contracted revenue base,” Bing Chen, Chairman, President and Chief Executive Officer of Seaspan, said.

Further details on the expected delivery or the identity of the shipbuilder entrusted with building the ships have not been disclosed.

The order ends a rather long dry spell of ordering in the container shipping business as owners refrained from adding capacity amid demand woes caused by the pandemic.

Data from BIMCO shows that the most popular ships in the sector for ordering are feeders and ULCSs. There are currently 182 feeder ships on order but, as they average only 1,735 TEU, the 52 ULCS on order account for the largest share of the order book by far when measured in DWT (1.1 million DWT out of 2 million DWT).

Seaspan’s fleet consists of 127 containerships, representing a total capacity of approximately 1,073,000 TEU with $4.1 billion of contracted revenue.